Baby boomers are expected to enter retirement with less savings and more debt than previous generations, and a new report warns that will bring some housing concerns for this giant generation of home owners. Many boomers are expected to struggle to afford their homes in retirement as they continue to face large mortgage burdens and a limited income, according to a report by the Harvard Joint Center for Housing Studies and the AARP Foundation.
Many seniors will still have mortgage debt in retirement. More than 70 percent of younger boomers aged 50 to 64, and 40 percent of those aged 65 and older, owed money on their home in 2010, according to the report.
Retirees will likely need to put a big portion of their income toward housing – more than 30 percent – and will be forced to trim other expenses like medical care, transportation, and food, according to the report. Boomers are also facing debt outside of home ownership, like credit card and car loan debt. Debt unrelated to housing among those aged 65 and older rose from an average of $4,300 in 1992 to $7,200 in 2010.
Within the next 10 years, the percentage of households age 65 and older who are living on less than $15,000 a year -- considered below the poverty line for a two-person household – is expected to increase by nearly 40 percent, according to the report.
By 2030, the number of adults aged 65 and older is expected to more than double to 73 million, and the report’s authors are calling for several recommendations to better help baby boomers afford retirement. For example, the report recommends property tax relief for seniors and an increase in federal rental assistance programs as well as programs to help seniors “age in place” in their homes.
Source: “Baby Boomers Face Big Housing Crunch,” CNNMoney (Sept. 2, 2014)