Lina Ko February 25th, 2008
According to a financial consulting firm, the number of baby boomers – a generation hard hit by divorce – in common-law unions increased dramatically between 2001 and 2006. The Toronto Sun reported that many people assume younger Canadians have a monopoly on non-traditional relationships, but the truth is that the boomer generation has embraced ‘grey area’ relationships at a time when they are earning and inheriting more than ever before.
These ‘grey area’ relationships come in many shapes and sizes – some with children from previous marriages, some with unfinished separations and divorces – all of which can have a significant impact on the new family’s financial and estate-planning realities.
Financial planners have many suggestions to help boomers deal with these new and complex relationships – from thorough, frank discussions up front about each partner’s expectations and responsibilities for the family’s financial affairs; to each partner’s expectation for how the family will spend, save and invest its money; to preparing a co-habitation agreement defining the financial terms of the relationship.
When young people decide to shack up, the risks are lower since both partners probably started with nothing. When boomers choose a common-law relationship, there’s a lot more to think about!
Lina Ko February 19th, 2008
The Globe and Mail last week pointed out that it can be costly for baby boomers to become empty nesters. Many boomer parents today are very focused on setting their kids up so that they are in a good financial situation. These kids may not be the boomerang kids who live at home and put away their salaries well into their 20s, but these young professionals are not fully independent either. Mom and Dad even have to underwrite some of the ‘luxury’ items such as new cars and private-school tuition.
According to David Cork, co-author of The Pig and Python: How to Prosper from the Aging Baby Boom, boomers often do not like to tell you that they are supporting their kids. But when you see young professionals in their early 30s with a nice home and no mortgage, you wonder whether there was any initial help.
Many parents are responding to financial barriers they may not have faced in their 20s, from staggering student loans to pricey real estate. In a recent RBC poll of boomers with household income of more than $100,000, a majority expected to give financial help to their children while they were still alive. Only one in 10 said they were planning on giving nothing to them during their lifetime.
For many, real estate is the preferred way to say “I love you.” Many opinionated parents are also taking an active interest in the real estate choices of their kids. If the adult children don’t get the stamp of approval, the money is not forthcoming.
In being supportive parents, boomers often have to sacrifice their own freedom and lifestyle. Golfing in the Caribbean twice a year may not be compatible with providing down payments on their kids’ homes or paying for their grandchildren’s private school. Most of my baby-boomer friends who have kids belong to this category. The only ‘free’ empty nesters are those wealthy boomers who have never married or have no kids.
Lina Ko February 11th, 2008
According to The Economist, in the first years of the 21st century, no area of the American economy has excited more emotion than the property market. First came the excitement of soaring prices. Then spirits came crashing down with the subprime crisis, and now homeowners are agonising over how far values could fall. A new University of Southern California study indicated that as the country’s 78m baby boomers retire, the housing market will change dramatically.
For three decades, baby boomers have helped push prices up: they settled down, then bought bigger houses and second homes. But as the first of them in the U.S. celebrate their 65th birthdays in 2011, this may change. The old sell more homes than they buy. The ratio of old to working-age people is expected to grow by 67 per cent over the next two decades. Will the younger generation be able to buy all the homes on the market?
Time will tell whether Canada will experience the same trend. According to an Angus Reid Strategies poll conducted last year, one in seven Canadians owns a vacation property and one in four would like to purchase recreational real estate in the future. Forty-one per cent of vacation property owners surveyed are over the age of 55, at the top end of the baby-boomer bracket.
Canadian analysts anticipate that peak baby boomers will go on buying vacation homes until the end of the decade, while the next group of boomers is likely to continue the trend until 2014 or later. According to the 2007 RE/MAX recreational property report, luxury recreational property sales are set to soar as affluent baby boomers drive demand for upscale product from coast to coast. For the most prosperous boomers looking to invest their wealth, concerns about stock-market fluctuations are among the main reasons they choose real estate.
Canadian boomers are seeking lakeside cottages with the intention of converting them into high-end permanent homes when they retire. Then they sell their other home in the city. The wealthiest boomers seem to be showing similar interest in the luxury segment of the vacation-home market, with the dual objective of a sound investment over the long term and enjoying their vacation property in the short term. The current boom in the condo market is attributed to baby boomers. In about a decade’s time, when the boomers get rid of their city property, it remains to be seen whether the younger generation will be purchasing at the same speed.
Lina Ko February 4th, 2008
I read with interest the findings of an 18-month Ottawa pilot project that looked at new ways to engage baby boomer volunteers. The study was conducted by the Catholic Immigration Centre in Ottawa and included two focus groups and a survey of the members of Ottawa Lifelong Learning, a group of 55-plus volunteers, as well as a review of studies from all over the world.
While baby boomers make up almost a third of the Canadian population, older boomers who are possibly heading towards retirement and therefore in their prime volunteering years have been reluctant to sign up. And when they do, they want to know what’s in it for them.
According to the study, older boomers are more likely than previous generations to work part-time or into their retirement years. They have ageing parents and boomerang children to look after. They are not volunteering out of a sense of obligation, but because they like socializing.
For a boomer, the biggest inducement to volunteering is being asked by someone they know. One of the best places to recruit boomers to volunteer is at work. Boomers think of volunteerism as a transition out of work. Boomer volunteers also want immediate feedback. They appreciate it when celebrities and politicians come to volunteer appreciation events.
Agencies are going to have to change their ways and spend money to attract boomer volunteers. They should perhaps start with calling boomers ’seasoned professionals’ rather than ‘retirees’.