Faced with dwindling retirement funds, many baby boomers are relocating to less expensive areas to stretch their dollars. Some will rent; others will downsize. Still others will move to places like Central American where living is cheaper.
According to the Center for Economic and Policy Research (6/24/2008), “The decline in home values has reduced the prospect of comfortable retirements for the majority of near retirees…This extraordinary destruction of wealth will have tremendous implications for millions of families as they enter retirement…Coupled with a very low personal savings rate, this means that many people will only have Social Security and Medicare to rely on in their retirement.”
One of the most effective steps Baby Boomers can take to live better on a fixed income is to relocate to an area where the cost of living is less. This can result in dramatic savings without sacrificing their quality of life. In fact, in many cases the quality of life significantly improves.
It is expected that a large number of upcoming Baby Boomer retirees will move to less expensive areas to stretch their meager retirement income. Among the likely actions foreseen are:
• For Boomers that have equity in their current homes, many will invest their sales proceeds rather than purchase a new home in a relocated area.
• More Boomers deciding – or forced – to rent rather than purchase downsized accommodations.
• A good percentage of Boomers will relocate south of the border to countries like Mexico and Costa Rica where a comfortable lifestyle can be maintained on a low fixed income.
Boomers will seek to avoid areas with high housing costs or which are dependent upon expensive fuels for heating and traveling. Inexpensive housing solutions, such as co-ops, prefabricated homes and senior mobile home parks are expected to benefit from this demographic migration.