Three basic elements are fundamental to human survival: food, water, and shelter. America’s seniors will soon be facing a major crisis because one of these three basics of life won’t be widely affordable, according to recent studies. Life in the “golden years” for some is beginning to look a lot like rust.
Housing, in general for retirees, is at a critically low level. Affordable housing, even more so. Shelter is one of the most basic necessities of life, and it would appear we simply don’t have enough of it to go around for seniors. The Bipartisan Policy Center, a Washington-based think tank, recently reported, “The current supply of housing that is affordable to the nation’s lowest-income seniors is woefully inadequate.” And it looks like this crisis is only going to get worse before it gets better.
With all the bad news, why read on? Is there hope? If so, where can it be found? Much of this article focuses on the looming crisis – the reasons for it. You’ll see the facts and figures, as they say. Toward the end of the piece, however, some questions are presented that may show an exciting alternative to a life lived on the margin for lack of funds. There is hope, but first, let’s examine the situation for what it is.
In its most basic form, the issue is about demographics. There are approximately 10,000 American citizens who turn 65 every single day. By 2020, it is estimated that there will be 55.9 million people aged 65 or older in the United States, and by 2030 that number is expected to reach 72.7 million. The first of the baby boomer generation turned 65 back in 2011, and many of this generation have entered retirement since then. 15 years from now, 1 in 5 Americans will be 65 or older. As millions more boomers hit retirement age, the need for housing will only intensify. Where are all these folks going to go to find an affordable home, let alone enjoy the quality of life that they’ve always dreamed of?
An illuminating piece was recently published by The Street, a market analysis publication, highlighting the severe shortage of housing that soon-to-be retirees are facing today. Public housing, a traditional go-to option for seniors looking to find housing on a budget, is woefully underprepared to meet the coming need. The Philadelphia Housing Authority, for instance, has a waiting list with a staggering 104,000 people on it. And this is just one city. Getting to the top of that list will be difficult. Even if a senior were able to locate housing, it won’t come for a long while, and timing is very important for seniors planning retirement.
Finding affordable private sector housing for retirement is equally as daunting. While some development firms are indeed building affordable housing for retirees, it certainly won’t meet the coming demands. Cecil Baker + Partners Architects is a private developer building affordable senior housing in Philadelphia, but their latest development, St. Francis Villa, will only house 40 units. This is 4/100th of 1% of the current need in the Philadelphia area. While the private sector is filling some of the gap that the public sector is unable to, it seems that they won’t be able to provide nearly what the demands will be.
And if you’re reading this thinking to yourself, “I’m already a homeowner; this housing crisis doesn’t affect me,” you may want to think again. For many, the crisis is not just in finding affordable housing for their senior years, but also finding effective housing. This means housing that is conducive to an active and, more importantly, safe lifestyle for seniors. According to the Harvard Joint Center for Housing Studies & AARP Foundation, “Housing that is affordable, physically accessible, well-located, and coordinated with supports and services is in too short supply.”
Most Americans simply aren’t living in areas that allow them to live comfortably and actively in old age. Most, the vast majority in fact, also don’t live in houses that are safe for senior living. There are five “universal design” features that houses should have to be appropriate for seniors – they are: no-step entry, single-floor living, extra-wide doorways and halls, accessible electrical controls and switches, and lever-style door and faucet handles. Only 57% of American homes have more than 1 of them. Only 1% have all five.
Housing isn’t the only problem facing boomers in the United States. The affordability of living well in retirement is another major concern. A staggering 45% of boomers have zero retirement savings. This huge group of retirees will need to rely solely on support from family members and government assistance, such as Social Security. With a housing crisis for retirees, and a severe lack of funds to support that retirement, baby boomers are facing some serious hurdles, and it seems as if it’s with little recourse. Are there affordable homes in nice communities? Is it possible to live well on $800-$1500 per month? Yes to both, but only when one thinks outside the box. More on that later.
Speaking of Social Security…by the agency’s own admission, Social Security is projected to be insolvent by 2035. When that happens, recipients can expect to see massive cuts in their benefits, with estimates from the Social Security Trustees being that, upon insolvency in 2035, the agency will only be able to pay out 75% of promises. This means a likely 25% cut in benefits to Social Security recipients at that time. Retirees are finding it hard enough to get by every month on what their checks are now. Imagine what they’ll have to deal with once the agency becomes insolvent!
Of course, there are alternatives. There are always alternatives. Some boomers may want to avoid the housing shortage crisis altogether and retire outside of the United States. Many, in fact, have already chosen to do this – over 600,000 to date. There are a multitude of countries that are more than willing to welcome boomers looking to retire within their borders. Countries that offer warm tropical climates, cool mountains, miles of pristine beaches, and safety rankings higher than most U.S. cities.
For example, Panama currently has a residency program for retirees with many, many benefits. Retirees who are residents in Panama get such benefits as 25% off monthly energy bills, 25% off airline tickets, 50% off entertainment (such as movies, theaters, concerts, and sporting events), 15% off medical bills (unless insurance applies), as well as many other benefits. Belize has the QRP Program, which provides tax incentives and easy residency standards. An affordable Caribbean country where English is the national language, Belize is the new expat go-to location. Nicaragua is an up-and-coming retiree haven which offers generous benefits for retirees who become residents there, such as duty-free importation of up to $20,000 of household goods, sales tax exemption on home construction materials up to $50,000, and tariff-free importation of one automobile up to $25,000.
These countries have incredibly low costs of living, especially compared to the United States. In fact, it is possible to live comfortably in either Belize or Panama for as little as $2,000 a month. In Nicaragua, it’s even possible to live at the beach on just $1,000 a month. Considering that the average monthly Social Security check in 2015 was $1335, you can see that it’s possible for boomers to retire in one of these countries on almost nothing more than a Social Security check alone. Where in the U.S. can that be said?
Oh, and not to mention these are all absolutely gorgeous countries! The food is delicious and organic. The people are warm, friendly, and spectacular. And they are safe. Pay attention to the facts to see that. Visit to believe it. An excellent retirement is possible where you can locate fine housing, and then actually afford to live there, all in a tropical paradise – what’s not to like?
Boomers have faced many hardships throughout their lives, and unfortunately, the hardships aren’t over yet for many. But you may be different. You may be open to thinking outside the box, and for that open mindedness, you can break free to a better future. Join the more than 600,000 folks who have already discovered a retirement outside the U.S. and who are living the good life affordably. There are always alternatives. Many boomers have found brighter skies retiring abroad. Maybe you will as well.
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