The front page headline of today’s Wall Street Journal proclaims “American’s Delay Retirement As Housing, Stock Swoon“. Senior’s largest net asset as a percentage of net wealth has traditionally and statistically been dominated by home equity. The article profiles one couple’s struggle to sell their $250,000 home after many months and this is after a $40,000 drop in price. Their goal was to sell their home and buy a new home out in Arizona and boost their retirement income. The couple expects that the husband will continue to work for a few more years before returning to the dream of retirement. Some seniors we have talked to recently are down right angry about their predicament, blaming events that started with 9-11 as part of the beginning of the downfall for their retirement woes. Their decrease in their home value combined with their depressed retirement accounts, leaves them searching for alternatives that they might not have considered such as reverse mortgages and cashing in life insurance policies.
The article discusses the consequences of postponing retirement (more competition for jobs with younger workers) and some benefits (prolonging the inevitable stress of medicare and medicaid on the government programs). The article confirms the piece written by Senior Housing Daily entitled “Senior Housing: If you build it, will they come?“. It appears that the massive migration of seniors to retirement communities, homes and assisted living facilities will be delayed 12-36 months at least, courtesy of the Credit Crunch and the Sub-prime Meltdown.