Not Acting Their Age
Madonna Bron, 52, who has clocked more than 50 marathons since a heart attack at 37, is often up before dawn for a daily run. Ron Cohen, 55, left the corporate rat race eight years ago, "downsized" from an executive job in Boston, for the laid-back air of western North Carolina--now he manages 15 people and runs an 11-vehicle transportation service. And Carol Kraker, 51, rises early most mornings for a swim before starting her 10-to-12-hour day selling upscale retirement homes outside Phoenix.
You call this retirement? Forget quiet lolls in a porch rocking chair, with morning golf followed by afternoon naps and "early bird" suppers. The first of the 78-million-strong baby boom generation turn 55 this year. And just as they changed life as we know it in recent decades--from music to marriage to mutual funds--this healthy, wealthy, and wise band of "zoomers" is charging toward retirement at its own breakneck speed.
Much as they transformed the suburbs, bringing forth the "soccer mom" phenomenon, demographers anticipate the boomer generation will rewrite what it means to be a senior citizen. They'll take tai chi classes in their 90s, start second careers at 60, and begin romances at ages that will bring frowns to the foreheads of their grandkids.
Healthy and wealthy. They will be a force to reckon with. Boomers make up almost a third of the U.S. population, and they are aging fast. Beginning in 2000, boomers started turning 50 at the rate of just under 10,000 a day. Already, more than 14 million boomers are 50 and up, and some aren't waiting until 55 to take early retirement. It's a well-educated crowd: Nearly 90 percent of boomers graduated from high school, and more than a quarter have at least a bachelor's degree. More than three quarters own homes, and 73 percent have some form of investments. And the eldest among them have money: A recent AARP report on the 50-plus generation shows those in the top quartile had a median income of $100,000 and a median net worth of $360,000.
But the bounty is not evenly distributed. Those in the bottom fourth had a median income of just $10,000 and were disproportionately female. "The top quarter are way ahead of where their parents were" heading into retirement, says AARP's director of legislation and public policy, John Rother. "The middle half is somewhat better off. The bottom quarter is in trouble; their wages have not kept up with the economy." The stock market slump hasn't helped, nor the double-digit annual increases in healthcare costs. For the first time in many years, this year's Retirement Confidence Survey found a drop in the percentage of workers saving for retirement (from 75 percent in 2000 to 71 percent this year) and a dip in confidence about meeting retirement income goals.
The income disparity highlights a signal fact about the boomers--their diversity. Despite attempts by marketers and the media to brand them as one, perhaps the most common trait of the generation born between 1946 and 1964 is its individuality. "The boomers have been a very distinct generation all the way," says Milken Institute demographer William Frey. "They have broken the mold in every conceivable way. I can't imagine them really changing as they age."
Certainly not if Kraker is the mold. At 47, she and husband Randy bought a home at Sun City Grand, an active-adult community (retirement is no longer a word used by those who market to the 55-plus crowd) near Phoenix close to the original Sun City retirement community where her in-laws live. "I really did fight it, actually," she says about leaving her job as a human-resources manager for a Minnesota casino. "All the way down here, I was on the cellphone talking to the casino." After six months without work, Kraker took a job snapping pictures of high school kids while earning her real-estate license. Now, she's one of the top producers in her firm. Her husband, meanwhile, downshifted from an executive's job to that of a salesman for the industrial chemicals firm he worked for in Minnesota. For fun, she sky-dives; both are in a local theater group. "I can't believe how much stress is gone," she says of her new life.
Dual incomes. Retirement experts say Kraker is emblematic of the zoomer generation: independent, youthful, with prospects of a long life ahead, and well off. Their bank accounts fattened with years of appreciation in their primary homes and their company-sponsored retirement accounts, their bodies strengthened by years of exercise, their minds stimulated by college and sometimes postgraduate educations, boomers are generally far better equipped for retirement than their parents were. Many will be in households where there is not just one, but two earners, with multiple retirement savings accounts gathered over the years at different jobs.
It's a pretty picture except for one big cloud: Most of these aging baby boomers are blissfully unaware--or maybe just unwilling to acknowledge--what it might mean to live 30 or 40 years beyond the day they quit their day jobs. This will be a time when they may be caring for adolescent children and aging parents at the same moment because they delayed having children, and because their own parents are living longer. "There is horrendous denial about the issue of aging," says Christopher Hayes, a Long Island University professor who studies boomer retirement trends. "My feeling is the first wave is going to get hit in the breadbasket in the next five to 10 years. The reality is the BMW is going to have to be downsized to a Beetle."
Scratch the surface of the statistics, and you begin to peel at the hidden anxiety. It's not just the recent implosion of the retirement savings plans that many are counting on to finance their retirement. Even though marketers paint a glorious picture of active zoomers retiring early, the reality can be quite different. According to a paper delivered last year at a Metropolitan Life retirement conference, the No. 1 reason cited for retiring earlier than planned was bad health or disability. "The thing I worry about is health," says Ralph Hegreness, who sold a computer-consulting company in Bellevue, Wash., and relocated to a new multigenerational community in the high desert north of Phoenix. "I feel quite vulnerable along that line. We're paying $560 a month for health insurance." He works out vigorously, hits the gym regularly, or just jogs in the neighborhood.
Forever young? It is also the realization that even if they work in retirement, as 80 percent of those in a 1998 AARP survey said they think they will, life without the all-defining career might be less than fulfilling to boomers. "We're never short of things to do," says Hegreness. But, he adds, "there's a certain guilt feeling we harbor. We're not really contributing to society." After all, this is the generation whose anthem included the memorable lyric of the Who's "My Generation": "Hope I die before I get old."
That's not likely, given advances in medicine and fitness. In 1900, the average person could not expect to live beyond 50. When Social Security began in 1935, the retirement age of 65 was actually older than the roughly 61 years the average male could expect to live. Today, Social Security recipients of both sexes can expect to live at least into their 70s.
That has turned the business of retirement on its head. Now, it is about managing decades of post-labor life rather than awaiting the grim reaper. That explains why so many retirees and "pre-retirees" say they expect to work well past their nominal retirement. Indeed, the trend toward early retirement in the past decade seems to be reversing slightly. After dropping for some time to about 62, the average age of retirement has leveled off at about 63. "The word retirement is going to lose its meaning over time," says Jim Thompson, director of shareholder education for AARP's investment program at Zurich Scudder Investments.
Retirement certainly isn't the word one would use to describe Sharon Dunn's lifestyle. The resident of Sun City Grand, an upscale community of people 50 and older developed by Del Webb Corp., builder of the pioneering Sun City retirement community in Phoenix 41 years ago, defies easy categorization. Dunn, 51, retired early from her job as a facilities maintenance manager at Los Alamos National Laboratory in New Mexico. She moved to Arizona, where she intended to look for another job. But, she says with a laugh, "I haven't had the time."
No wonder. As she tells it, "My calendar just fills up." There's golf two or three times a week, bicycling, and hiking nearby mountain trails. "I was terrified of retiring," she says. "My life was my job; I worked 10 to 12 hours a day. I had no idea how much I disliked it." And her new life? "It's like being a kid again. Either I'll go back to school, or I'll look for a new job."
Great rooms. Satisfying the multiple interests of the zoomers is a marketing challenge. The cookie-cutter prescription of the retirement communities of the 1960s doesn't hold much appeal for zoomers, who as expressive adolescents spray-painted psychedelic images on the sides of their VW buses. Nor do a golf course, swimming pool, and tennis court suffice as amenities. Today's "active adult" communities have gyms that would put most college athletic programs to shame, computer labs with high-speed Internet access, and meeting rooms where local universities often hold special courses. And even the notion of moving to some Sun Belt locale is losing its shine.
No company illustrates this shift more than Del Webb. "We're seeing these people coming younger and wealthier and healthier than their parents," says the vice president of market research, Paul Bessler. In the early '90s, the median annual retirement income of Sun City buyers was between $35,000 and $40,000, says Bessler, and median net worth was between $400,000 and $500,000. Now, the median income is between $60,000 and $80,000, and net worth between $700,000 and $1 million.
The changing demographics have led Del Webb and other developers to build more-luxurious homes and to emphasize lifestyle over location. Prior generations "viewed retirement as an ending," Bessler says. "What I am seeing [today] is just the opposite: `Now it's my turn. I'm just beginning life.' "
Another change: a more youthful clientele, coupled with second careers in retirement, has spawned a demand for new amenities. One of the most popular options at Del Webb's multigenerational community outside Phoenix is "La Casita"--a separate, in-law suite often used for a home office. Entertainment rooms and wine cellars are also in demand. "They've always put an emphasis on lifestyle issues, and that will be reflected in retirement, too," says Wake Forest University Prof. Charles Longino.
An expert on retiree migration, Longino has detected changes in the pattern of retiree living. In addition to Florida, popular destinations nowadays for retirees are the mountainous areas of the West (Utah, Nevada, Colorado) and smaller states in the South (Tennessee, the Carolinas, Arkansas). Among the places where the retiree population is growing fastest: Henderson, Nev.; Park City, Utah; Prescott, Ariz.; and Georgetown, Texas. What many of these places offer, somewhat ironically for mobile boomers who have lived life on Internet time, is a sense of community and a slower pace. "Our analysis shows that the fastest-growing elderly populations tend to be in smaller and medium-sized metropolitan areas in the `new West' and `new South,' " says Frey. Another phenomenon, as boomers stay put and age, is the graying of once-hippie havens like Burlington, Vt.; Madison, Wis.; and Boulder, Colo.
Some aging boomers with adolescent or younger children still at home, or with elderly parents, are opting to stay put. In some cases, one half of a retired couple may still be working. To accommodate these folks, Del Webb built its first "four-season" retirement community not far from Chicago in Huntley, Ill. Huntley is where retired TWA flight attendant Carolyn Kleen, 58, and her husband, Jim, 61, a high school art teacher, moved to in June 1999 from nearby Elgin. "We have family here and love the change of seasons," says Carolyn, who takes line-dancing classes and belongs to the Prairie Singers chorus. Jim's mother, 90, was "a major factor in staying nearby," says Carolyn.
Caring for one's parents in one's own retirement--now that may be the perfect boomer irony. A generation that has defied its age with herbal tonics and exercise comes face to face with it.
Ah, but not too soon. For now, let's do as 56-year-old Barbara Lawson does. Up at 5 a.m. for her exercise regime, the Arizona transplant (she moved to suburban Phoenix from Texas after the death of her husband and the loss of a corporate job) is, as she joyfully decrees, "on the cusp" of being a boomer. The former corporate health manager has her own company teaching seniors how to stretch and do strength-training. "I am a boomer by psychology," she says in her own age-defying way. "Now, I am ready to reinvent myself."
She--and 78 million others.
By the numbers
The 55-to-64-year-old population grew significantly over the past decade. That's a lure to marketers, as people in this "pre-retiree" age group tend to spend heavily on travel, leisure, healthcare, and other consumer items.
55-to-64-year-olds
1990 21.1 mil. (up 15 pct.)
2000 24.3 mil.
Source: U.S. Census Bureau
The easy chair
When asked by builder Del Webb what they wanted most in their retirement homes, baby boomers put a definite emphasis on lifestyle. But more than half showed a serious side, choosing a place where they could work.
Home features favored by 48-to-52-year-olds
Great room 72 pct.
Exercise room 58 pct.
Home office 55 pct.
Gourmet kitchen 52 pct.
Computer room 47 pct.
With James M. Pethokoukis
This story appears in the June 4, 2001 print edition of U.S. News & World Report.