Many baby boomers say they're likely to stay put in retirement amid a shaky economy. Those who hope to buy a new place are looking for a smaller home somewhere with a better climate that's more affordable and close to family, a new poll finds.
The 77 million-strong generation born between 1946 and 1964 is increasingly worried about retirement and their finances in light of the economic crisis of the past three years. Just 9 percent say they are strongly convinced they'll be able to live comfortably when they retire, according to the Associated Press-LifeGoesStrong.com poll.
Shelley Wernholm, a 47-year-old single mother of two who works for a health insurance company in Cleveland, said she wanted to retire and move to a new home by 60. But her pension was eliminated five years ago, her personal investments tanked during the recession and her home of 21 years has lost more than half its value.
"I was hoping I'd be moving to a beach somewhere, anywhere, preferably a warm one," Wernholm said. "But I'm not moving. I can't. It's hard to remain optimistic."
Overall, about 6 in 10 baby boomers say their workplace retirement plans, personal investments or real estate lost value during the economic downturn. Of this group, 53 percent say they'll have to delay retirement because their nest eggs shrank.
Financial experts say those losses, including home prices that have dropped by a third nationwide over the past four years, have left boomers anxious about moving and selling their homes.
"There's a mistrust of the real estate market that we didn't have before," said Barbara Corcoran, a New York-based real estate consultant. "There's a concern about whether people will get money out of their house. They envision the home as a problem, not an asset, and this unshakable belief in homes as a tool for retirement has been shaken to the core."
Fifty-two percent of boomers say they are unlikely to move someplace new in retirement, unchanged from March. And 4 in 10 say they are very likely to stay in their current home throughout their retirement.
Older boomers are more apt to say they're already settled in for their golden years; 48 percent say it's extremely or very likely they'll stay in the home they live in now throughout their retirement, compared with 35 percent among younger boomers. Those who've lived in their current home for 20 or more years are also more likely to say they'll stay.
Midwestern and rural baby boomers are more inclined to stay put, too.
Not surprisingly, higher-earning boomers who make more than $100,000 a year are more likely to buy a new home during retirement.
Overall, boomers are just as likely to say they expect to buy as rent their retirement home: About 3 in 10 say it's at least somewhat likely they will buy, and about as many expect to rent.
Why buy a new home? About 4 in 10 of those who say it's likely they'll buy a new home would prefer a smaller one. Other important considerations include a different, and perhaps warmer, climate (30 percent); a more affordable home (25 percent); and being closer to family (15 percent).
Just 8 percent of those surveyed are looking for a larger home and only 10 percent are searching for a city with more services.
John Fortune, a 60-year-old small business owner in Scotch Plains, N.J., outside Newark, said he'd ideally like to move in his retirement years. But he's unsure about the future and whether he'll have any money left over after putting three kids through college.
"I don't expect to fully retire," said Fortune, who runs a business that sharpens knives, tools and other cutlery. "It just depends on what happens to the economy. I'd like to find someplace that is warmer and doesn't have the high taxes but we'll just have to see."
Regardless of whether they are likely to move, boomers' top priorities for their retirement home is to be near their children (50 percent), not have any stairs (46 percent), and close to medical care (39 percent) and shops and services (38 percent).
Mothers were far more likely than fathers to say that living near their children was an important consideration in planning retirement housing.
When those kids have left the nest, baby boomer parents are most likely to turn their children's rooms into new guest bedrooms — perhaps because 3 out of 4 say they would prefer visiting friends and family stay with them instead of at a hotel.
Many boomers are saying they'll keep working during retirement: a total of 73 percent in the new poll, compared with 67 percent in March. That's more than in any other generation.
Sherry Wise, a 53-year-old agricultural economist in Lorton, Va., a suburb of Washington, said she is worried she will have to work well into her 60s and beyond in order to continue paying her mortgage, keep up an investment property in New Mexico and look after her two daughters.
"The one thing I know is that you can't count on anything anymore. This economy has gotten so screwed up," Wise said. "We're just going to try to earn as much money as possible."
The AP-LifeGoesStrong.com poll was conducted Oct. 5-12 by Knowledge Networks of Palo Alto, Calif. The poll involved online interviews with 1,095 people born between 1946 and 1964, as well as companion interviews with an additional 315 adults of other age groups. The margin of sampling error for baby boomers was plus or minus 3.6 percentage points.
Knowledge Networks used traditional telephone and mail sampling methods to randomly recruit respondents. People selected who had no Internet access were given it for free.
AP Deputy Director of Polling Jennifer Agiesta and News Survey Specialist Dennis Junius contributed to this report.
Questions and results: http://surveys.ap.org