Best Places to Retire Appeal to More Than Just Retirees
People of all generations are looking for many of the same qualities and amenities in a city, but the distinctions become clearer when you consider the reasons each group values these factors.
When we looked at survey data to determine our 2013 Top 10 Best Places to Retire list, we came to one conclusion that seemed troubling: When considering where to retire, retirees seem to be looking for the same things in a city as just about anyone else. So, how were we to differentiate a list of cities as best places to retire when they may be more broadly just best places for everyone? As it turned out, just acknowledging that survey data can be ambiguous was the key. People of all generations are looking for many of the same qualities and amenities in a city, but the distinctions become clearer when you consider the reasons each group values these factors. As stated in our methodology for the list, we asked Martin Prosperity Institute to parse data we collected from our exclusive livability survey through Ipsos Public Affairs, which determined the top three things retirement age people most value to be a city's health care, housing and cost of living, in that order. For deeper insight as to why retirees rank these as top concerns, consider findings presented in the 2013 Merrill Lynch Retirement Study, which revealed that pre-retirees' top concerns about retirement are health disruptions, financial stability, new family interdependencies, housing and community, and need for guidance about how to plan for these years with less reliance on pensions and entitlement plans. But again, aren't health care, housing and cost of living factors everyone considers? Sure, but let's take a look at the differences between how retirees and younger adults view these topics:
- Health care: While access to quality, affordable health care is important to everyone, younger adults are more likely to be concerned about family medical needs, such as excellent children's and women's services. Even though this generation of retirees may be the healthiest ever (and retiring later than any before them), older adults are simply more susceptible to more frequent and complex health issues. They're looking beyond just a hospital's general awards to see how many top-rated specialists they'll find there.
- Housing: Our housing data takes into account affordability (average home prices relative to average income and transportation costs) as well as the availability and average age of housing, plus whether there is a good blend of homeowners versus renters. It seems that younger adults working their way up the career ladder seek this kind of variety as it makes it easier to find a good match based almost entirely on their incomes (i.e. "What is the nicest home for me that I can currently afford in a neighborhood I like?"). Meanwhile, retirees value a varied housing market because it gives them more lifestyle flexibility to "reinvent" themselves, a trend revealed in the Merrill Lynch study: "They're seeing the longevity bonus as a chance to devote energy to pursuits they may not have had the time or freedom to chase during the 'career' portion of their lives, to stay stimulated and to strengthen and expand their social network.” For example, the great schools in a suburb do not matter as much since the kids are grown and gone, so they may want to give urban living a try. Conversely, someone who lived close the city for his job may want to buy some land in the country since commute times are no longer an issue.
- Cost of living: No matter their ages, most people consider cost of living beyond just housing prices. As just stated, affordability is relative to income, but at retirement, most or all of a person's income is fixed. The Merrill Lynch study shows today's retirees face a few new strains on that incomes, such as new family dynamics that resulted from an uncertain economy. In other words, their once emptied nests may be full again (or never emptied), with children or grandchildren returning home or otherwise depending on them.The report also states that health-care costs are pre-retirees' biggest concern, with only one in nine confident in their ability to pay for health-care expenses during retirement. In a nutshell, the lower the overall cost of living, the more money retirees have left to address these two concerns. For a younger adult, perhaps that should mean more money to save for retirement.