Friday, May 19, 2006

Boomers Turn to Real Estate

I'm not exactly a Baby Boomer, but I do look to my elders for examples. This story below cites a study suggesting Boomers overwhelmingly believe in real estate as an investment of choice. It also makes us think about smart retirement planning.

In fact, my wife and I were disussing tax planning the other day. I want to sock as much away in her pre tax 403B and after tax IRAs for me. Not surprisingly, she doesn't want to bury all our cash until we are almost dead... then give it to the kids! Hmmmm... a good investment that has tax advantages and is liquid... maybe real estate?

Boomers Buy Real Estate to Ease Financial Concerns(May 19, 2006) --

Many baby boomers feel financially strapped and worry about how they'll be able to retire, so they turn to real estate as a means of accumulating wealth, a study shows. According to Baby Boomers and Real Estate: Today and Tomorrow, a study conducted for the NATIONAL ASSOCIATION OF REALTORS® by Harris Interactive, boomers overwhelmingly channel their concerns over finances into real estate.

Almost eight out of 10 own their home and one-quarter own one or more other kinds of real estate in addition to their primary residence. The most popular real estate investment is land (13 percent), followed by rental property (8 percent), vacation or seasonally occupied home (7 percent), and commercial real estate (2 percent). “Boomers have turned owning multiple homes into a fine art,” Peter Francese, a demographic trend analyst, told attendees at the 2006 REALTORS® Midyear Legislative Meetings & Trade Expo Thursday.

The survey found 96 percent of boomers think real estate is a good investment. As a group, boomers are wealthy compared with the rest of the country, earning median household income of $64,700 compared with $44,400 for the general U.S. population. But that relative wealth isn’t translating into peace of mind. Thirty-seven percent of the boomers say they’re making just enough to make ends meet and 17 percent say they’re having financial difficulties. Only 4 percent say they’re financially well off. The survey also found three out of four boomers believe they’re not financially prepared for retirement. “This survey uncovered a lot of anxiety,” said Francese.

To gather the data, Harris Interactive conducted an online survey in early April of 1,969 U.S. adults born between 1946 and 1964. For more highlights of the Baby Boomers and Real Estate: Today and Tomorrow study, read the press release. The full study will be available in June.— By Chuck Paustian for REALTOR® Magazine Online

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