Tuesday, December 30, 2008

Half Condo, Half Hotel

Meet David Hess, a 47-year-old business executive and father of three children who found himself divorced and looking for new living arrangements. He had three main criteria: a place where his children would feel at home on weekends, a location close to their mother's suburban house, and a situation that accommodated his extensive travel. Solution: He settled in AVE in Clifton, N.J., a hybrid between an apartment and an extended stay hotel.

AVE, a project of Korman Communities, is located near a mass transit center. It offers both furnished and unfurnished apartments, and tenants can sign a lease for the unfurnished units for six months or longer. The facility provides concierge services, cafe breakfasts, a fitness facility and weekly social events. Korman's six AVE projects around the country (three in New Jersey, two in Pennsylvania and one in Virginia) are evolving into small "neighborhoods," says Lea Anne Welsh, who developed the AVE concept for Korman.

Reports Antoinette Martin for the New York Times:

Dozens of no-longer-married adults, many of them with children, have signed leases for a year's term or longer at each of the complexes [Welsh] said; divorced fathers account for about 25 percent of all tenants at the 785 units in New Jersey and 508 in Pennsylvania.
The price of these units are not for the "faint of wallet," Martin observes. An unfurnished, two-bedroom, two-bathroom suite in the Clifton facility can range from $2,595 to $3,330 a month when leased on a yearly basis. That's pretty steep, but it's probably no more than many tenants would be laying out for mortgage payments on a single-family dwelling in the tonier subdivisions ringing New York City, Philadelphia or Washington, D.C., much less the cost of maid service and health club dues.

If Hess is typical, affluent Baby Boomers are leading the demand for these hyper-flexible, low-maintenance living arrangements. Divorced Boomer executives have lots of disposable income but their lives are in transition, and they are super short on time. The last thing they want is the headaches that come with maintaining a single-family house and garden. If the apartment complex provides concierge services that make life a little easier, so much the better. A flexible lease length gives them the time to look for more permanent arrangements, but they may well conclude they like the hassle-free lifestyle just fine.

Korman's price point limits the market to the top one or two percent of income earners in the country. But don't be surprised to see imitators fielding stripped-down versions of AVE -- less luxury, fewer premium services -- that package a mix of convenient location, low maintenance and extra amenities for stressed-out, time-deprived divorced moms and dads.

Just another wrinkle in the ever-changing pattern of family structures, living arrangements and housing options brought to you courtesy of the Baby Boomer generation.

(Photo credit of Korman facility in Arlington, Va.: AKA.)

Friday, December 19, 2008

69.8 -- the New 65

Forty may be the new 30, but the braniacs in charge of the U.S. Social Security and Medicare programs haven't figured out what to do about it. As life expectancies lengthen, so do taxpayer liabilities for pensions and health care with the consequence that, sooner or later, both will default on their obligations to the public.

Warren Sanderson and Sergei Scherbov may have part of the answer. Instead of basing pensions and other benefits upon peoples' chronological age (how long they've been alive), we should consider peoples' "prospective" age (how long they're expected to live.)

The conventional definition says "old age" starts at age 65. But Sanderson, an economics professor at Stony Brook University, and Scherbov, a researcher at the Vienna Institute of Demography, question the relevance of that definition as life spans lengthen. Consider: In 1952 the average 30-year-old French woman had an average life expectancy of 44.7 more years. By 2005, the average 40-year-old French woman had an average life expectancy of.... 44.7 more years. Chronologically, the 40-year-old woman was a decade older. But was she truly "older"? (As you ponder that question, consider that the photo above captures French actress Catherine Deneuve at age 40 in the movie, "The Hunger.")

In their paper, "Rethinking Age and Aging," in Population Bulletin, the demographic duo define "old age" as the age at which, based on the average life expectancy of a given society, a person has 15 years left to live. In the United States, that age is 69.8 -- nearly five years chronologically older than the standard retirement age today. By the year 2045, "old age" is forecast to commence at 72.8.

Think what would happen if "old age" benefits (Social Security, Medicare, pensions) were geared to life expectancy rather than chronological age. Americans would have to work longer before collecting the gold watch and planning for that cruise around the world. But they'd still have a social safety net to cover them when they became frail and infirm. On the flip side, society could far better afford the social safety net. Instead of an "age dependency ratio" of 37.1 "old" people supported by 100 in the working-age population by the year 2045, the ratio would be only 21 per 100.

Sanderson and Scherbov don't go quite that far. On the one hand, they argue that basing pensions on a fixed chronological age provides a windfall for old guys who paid into the system for a fixed number of years then collect benefits over ever-lengthening periods of retirement. On the other, basing pensions on a fixed prospective age would be unfair to older generations. "As life expectancies increase," they write, "they would have to pay into the system for more and more years, only to receive benefits over a fixed average period."

One solution, they suggest, would be to build payments and benefits around the average of chronological and prospective ages.

As Baby Boomers, we'd like to start raking in benefits by 65 just as much as the next guy. On the other hand, we'd like there to be a social safety net when we need it. Social Security might conceivably survive in its current form, but Medicare is a goner. It seems like Sanderson and Scherbov have provided a rational and objective criteria for recalibrating social expections and salvaging our "old age" protections.

(Photo credit: Fluffiest Blog in the West.)

Thursday, December 4, 2008

Three Times a Week

There was an old Woody Allen sketch (I forget the movie) that went like this: Woody's got marital problems, and the psychoanalyst asks him how often he has sex. "Hardly ever. Only three times a week."

The scene switches to Woody's movie wife. Her psychoanalyst asks her how often she has sex. "Alllll the time," she says. "Three times a week."

That scene came to mind when reading statistics from an AARP study, "Retired Spouses," showing that retirees have sex less often than before they were retired. Among the many, many findings in the study (yes, we confess, we're focusing on the most salacious) is that 22 percent of retirees report having sex less often.

That's hardly a surprise. Retired people tend to be older than working people. The older you are, the less likely you are to have sex. End of story. But here's the titillating part: 25 percent of men say they have less sex while only 19 percent of women say they have less.

What does that tell you? Either six percent of the women are getting some action on the side with younger, non-retired men (We'll let you draw your own conclusions how likely that is) or there's a major difference in perceptions. Here's our guess (based on five or so decades of being male): Men are more likely to notice a fall-off in sexual activity. They're also more likely to brood about it.

If you don't believe us, just ask Woody Allen's psychoanalyst.

Wednesday, December 3, 2008

Believing in Miracles

A working hypothesis of the Boomer Project is that Baby Boomers, like every generation, follow predictable life cycles. And one of those life cycles is an increasing preoccupation with spiritual matters the closer one gets to meeting one's maker. Although Boomers lived through the 60s-era rejection of church attendance and traditional religious denominations, we expect them to find non-institutionalized ways to express their spirituality as they get older.

AARP explores the spiritual dimension of Baby Boomers in "Miracles, Divine Healing and Angels," published August. The findings were predictable in many ways: Women are more likely to believe in miracles, divine healing and angels than men are. Hispanics are more spiritual/religious than white non-Hispanics. Southerners are more likely to believe in divine forces, and so are lesser educated people. None of the differences were dramatic -- Americans are a religious people -- but they are measurable.

Here's what confounded us: Age appears to be the least significant of the variables tested.

Here's a breakdown of the responses:

The percentage of 55 to 64-year-old Boomers (the red bar) describing themselves as "very" spiritual/religious was one percentage point higher than that of their younger, 45 to 54-year-old brethren. But the number describing themselves as "somewhat" spiritual/religious was four percentage points lower, and the number responding "not at all" was three points higher.

That's hardly an earth-shaking shift, but it is surprising. Despite being a few steps closer to the eternal hereafter, older Boomers are marginally less spiritual than their younger Boomer brethren.

Don't misinterpret this data. It does not say that Boomers are growing less spiritual as they get older. It says that 45 to 54-year-olds are less spiritual than the decadal cohorts that precede and follow them. It's entirely possible that the cultural revolutionary fervor of the '60s had its greatest impact on the youth of that era, and that the '60s generation has been less spiritual/religious than other generations through the years.

If so, the gap appears to have narrowed. Perhaps the real story is that, given where they started 40 years ago, Baby Boomers have traveled the longest spiritual journey of all.

(Hat tip: Paul Briand at Examiner.com; image credit: spiritualarts.com.)

Tuesday, December 2, 2008

The Uber Boomers

It's a women's world. Alpha males may dominate the rarefied heights of the power/money hierarchy in the United States, but increasingly women -- make that Boomer women -- are running the rest of society.

The facts below come by way of Meredith Barnhill at NoLa.com, who got them from the She.conomy marketing blog, which is a bit roundabout, so we can't vouch for chain of transmission. But the numbers seem pretty plausible -- and pretty darned scary if you're a beta male who's not at the apex of the power/money pyramid.

  • High-net-worth women account for 39% of the country's top wealth earners; 2.5 million of them have combined assets of $4.2 trillion. More than 1.3 million women professionals and executives earn in excess of $100,000 annually. 43% of Americans with more than $500,000 in assets are female.

  • Over the next decade, women will control two thirds of consumer wealth in the United States and be the beneficiaries of the largest transference of wealth in our country's history. Estimates range from $12 to $40 trillion. Many Boomer women will experience a double inheritance windfall, from both parents and husband. The Boomer woman is a consumer that luxury brands want to resonate with.
And don't get us talking about GenY, whose women comprise a growing majority of college graduates and will be the top earners of the future!

Actually, it doesn't matter who makes the money, because women already control the spending of it, accounting for 85% of consumer purchases of everything from autos to health care:

  • 91% of New Homes
  • 66% PCs
  • 92% Vacations
  • 80% Healthcare
  • 65% New Cars
  • 89% Bank Accounts
  • 93% Food
  • 93 % OTC Pharmaceuticals
What does that leave for us males? An 83% share of pro basketball tickets? A 92% share of Tom Clancy SpinterCell games for the PC? For beta males, it's all downhill from here.

(Photo credit from "The Devil Wears Prada":

Monday, December 1, 2008

When Boomers Get the Boot

While some observers fret about what will happen when Baby Boomers retire en masse -- oops, there goes the institutional knowledge that keeps the organization humming -- many corporations see layoffs of high-salaried Boomers as a way to quickly prune expenses during periods of economic distress. Nowhere is that trend more evident today than in the news gathering business, both print and television.

Writes the New York Times:

Across the country, longtime local TV anchors are a dying breed. Facing an economic slump and a severe advertising downturn, many stations have cut costs drastically in the last year, and veteran anchors, with their expensive contracts, seem to be shouldering a disproportionate share of the cutbacks. When station managers are forced to make cuts, hefty anchor salaries are a tempting target. ...

When the anchors depart, they take decades of experience and insight with them. “Basically, you replace someone who knows City Hall with someone who can’t find it,” said John Beard, who lost his job at KTTV last December after 26 years as a news anchor in Los Angeles.

Local newspapers and televisions are hit harder than most industries, buckling under the double whammy of an acute advertising recession and a shift within advertising to the Internet. Watching these two industries implode is like watching the free-fall of the steel industry in the 1970s -- with the difference being that no one is quite sure there's a bottom for newspapers and local broadcast.

At the Boomer Project, we've always been sanguine about the employment prospects for Boomers. Retirement prospects are another matter entirely -- Boomers have barely saved a fraction of the funds they'll need to live a life of ease in their post-65 years. But so many industries have been sounding alarums about looming labor shortages when Boomers retire that we assumed Boomers could make up for their savings deficit by working as long as they wanted.

Or maybe not. When desperate times call for desperate measures, Boomers' seniority-padded salaries are a highly visible liability. (The article doesn't even touch upon the delicate subject of the disproportionate impact that Boomers have on an organization's medical insurance rates.)

What's a Boomer to do? One option: Start your own business when you're a GenXer. You're pretty safe from arbitrary layoffs when you're the boss. Another option: Start preparing for that second career. The New York Times article described how Ernie Bjorkman, a Denver, Co., television anchorman landed on his feet after getting sacked. Acting on a dream of working with animals, he'd completed a two-year veterinary technician program two weeks before getting the pink slip. Said Bjorkman: "I'm ready to reinvent myself."

Valuable Insights into the Hearts, Minds and Wallets of Today's Baby Boomers

This blog is by the authors of Boomer Consumer: Ten New Rules for Marketing to America's Largest, Wealthiest and Most Influential Group, on sale now.

Here is where you'll find information referenced in the book, as well as updates, news and perspectives from Matt Thornhill and John Martin, founders of the Boomer Project.