Retiring Boomers could be a boon to economic growth

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Retiring Boomers could be a boon to economic growth

McClatchy Newspapers
Published Saturday, December 22, 2012   |  978 Words  |  

WASHINGTON --With millions of the nation's baby boomers nearing retirement, there's fear about the economic impact of their departure from the workforce. If the pattern of previous generations repeats, there could be less consumer spending and a drain on Social Security and Medicare.

But some business and community leaders have a brighter outlook. They see the retirement of 78 million boomers -- born from 1946 to 1964 -- as a likely stimulus, creating opportunities for new products, services and jobs.

On Hilton Head Island, for example, Mayor Drew Laughlin said retirees want cultural and educational amenities, not just beaches, golf and tennis. So it makes sense, he says, to explore ways to bring a University of South Carolina Beaufort satellite campus to the island and to prop up the struggling Arts Center of Coastal Carolina.

"I think that retirees in general, and certainly future retirees, are going to be looking for cultural and educational and arts enrichment in their lives," Laughlin said. "I tend to believe if you want to attract those people, you need to have those things, if you can."

Nearby Bluffton, spurred by Sun City Hilton Head, grew more than 800 percent between 2000 and 2010, in part from annexation and an influx of empty-nesters and retirees.Beaufort County's population grew 76 percent between 2000 and 2010; 20 percent is 65 and older.

William Court of Court Atkins Architects has benefited from the new arrivals, many of whom want custom-built, high-end homes.

They ask questions like, " 'How can I stay in this house as long as possible? What things can we do in the design process that will make this house more accessible ... for the long term,' " Court said.

Palmetto Bluff, meanwhile, is offering one-story floor plans for the first time, sales manager Bryan Byrne said. The community is even building some of these homes "on spec" in anticipation of high demand.

"(Demand) has been beyond what we have expected," Byrne said. "For the first time in the history of the community, we went ahead and started building homes for sale."

Ben Andrews, manager of Club Car of Hilton Head off U.S. 278 in Bluffton, says retirees account for about three-quarters of his business. Demand for the golf carts he sells has been so brisk he's hired another employee.

"We were basically getting behind on getting (carts) out for people." Andrews said. "We have had to make some changes to our personnel, luckily for the better and not for the worse."


Up the coast, a similar trend prevails.

When Elizabeth Reighard started her fitness training business in Myrtle Beach four years ago, most of her students were in their mid-30s. Now her clients are mainly boomers. One is Mary Smith, 56, who hired Reighard to help her "keep up with the grandkids."

The demand for fitness trainers like Reighard is expected to jump 24 percent over the next decade, largely due to baby boomers who want to stay healthy longer, according to the Department of Labor.

"I'm seeing it more and more. Seniors know they have to be in better shape to have less aches and pains," said Rieghard, who is a boomer herself. "Yeah, we're getting older, but our bodies feel good. ... I look in the mirror and I might look 51, but I feel 25."


On the labor front, the health care industry is the most obvious beneficiary of a longer-living population. Demand for home health aides is expected to grow 70 percent over the next decade, according to the Department of Labor.

But jobs in less obvious fields also will need to be filled. Architects will be called upon to build senior-friendly communities; financial advisers will be asked to help boomers plan their retirements; recreation workers will lead excursions tailored for boomers; and job trainers will prepare new workers called upon to replace retirees.

"It's only in Washington that 100 million people are viewed as an unaffordable cost and financial burden," said Jody Holtzman, a senior vice president at AARP. "In the private sector, 100 million people are called a market and an opportunity."

Concerns about a drain on entitlements for retiring baby boomers has increased as talks over the fiscal cliff intensify. Boomers have been depicted as the elephant in the room. The Congressional Budget Office warned in June of a shortfall for entitlement programs, because aging boomers will consume a "significant and sustained" share of benefits from Social Security, Medicare and long-term care services financed by Medicaid, the health care program for the poor.

But those projections don't take into account boomers who will work longer, said Matt Thornhill, author of "Boomer Consumer," a book that examines marketing to the baby boomer generation.

"We became the generation of consumption and personal gratification," Thornhill said. "Boomers are not going to spend at all like the prior generations did at 65. They're going to spend at boomer levels. And there's millions more of them."

In Myrtle Beach, community leaders see boomers bringing opportunity for local businesses. The 65 and older population grew 56 percent from 2000 to 2010 and now makes up 17 percent of Horry County's population.

Jennifer Jones-Poore, co-owner of Express Watersports in Myrtle Beach, says about half of her off-season customers are boomers wanting to scuba dive, parasail or kayak.

Holtzman of the AARP says he has met with hundreds of venture capitalists over the years. He always encourages them to ask a question when they're approached by entrepreneurs seeking start-up money: "What's your 50-plus plan?"

McClatchy Newspapers' Chris Adams contributed to this report.

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