Changing model of retirees

Borrowing money, using savings and family’s financial aid may be necessary for senior citizens moving into retirement homes. Gone are the days of retiring in the comfort of a luxury facility overlooking golf courses and close to shopping malls. In today’s post-recessionary economy, nursing home operators and states are rethinking their decisions. According to home builder Del Webb a new survey is showing that Arizona, Florida, South and North Carolina are where aging baby boomers will be heading.

A new study on retirement

In the past, moving to a warm climate was the priority for those looking to retire but now the concern is primarily financial. The number one fear for seniors is maintaining their cost of living and that is opening the door for more states to attract the retired public. The Del Webb study showed that about 35% plan to move to a new home when they retire and about half plan to relocate to a different state. Samuel Ford, economist for Economy.com, said, “People going into retirement now, or in coming years, have gone through the worst recession since the 40s. Their nest eggs and retirement funds are tapped out or stretched at minimum, and that is causing them to rethink their retirement plan as a whole.”

What retirees want now

For consumers who want to relocate, there are also specific needs. According to a survey conducted by the National Association of Home Builders, those who are fifty-five years and older want the following in a home:

• Maximum storage space
• In-unit washer and dryers
• Easy-open windows
• Garage door openers
• Porches and private patios
• Large bathrooms
• Attached garages

In lieu of these things, they are giving up island work areas, wood burning fireplaces, exercise rooms and separate showers. Hi-tech additions are also no longer a priority. Rose Quint, the NAHB VP for study research, (see http://www.nj.com/business/index.ssf/2010/01/seniors_rethink_their_dream_ho.html) said, “The older buyers are frugal, probably on a fixed income and so expensive tech items are not that big on their lists…Retiring consumers don’t want to rely on borrowing money from families or personal loans to make their monthly budgets. The stress to them isn’t worth it.”

More care included in the home purchase

Another interesting result of the survey is that retiring homeowners want services added to their purchase. John Migliaccio, director of research at MetLife’s Mature Market Institute, said, “Very telling is that the younger group of mature consumers reported enthusiastically that they want services like home maintenance and repair as part of their next home purchase, along with services usually connected to older householders like housekeeping, onsite health care and transportation.” The group also wanted a larger variety of activities and social interaction built into their retirement communities.

Retirement in the future

Overall retirement is changing due to the economic recession. Though it is over, it has left millions of Americans with depleted savings and now they are looking for more cost-efficient areas and situations to retire in. Rather than borrowing money and relying on family help, the baby boomers are opting for cutbacks in retirement. It is telling of how the economy changed public perception and how as a whole society is remembering well the financial difficulties of the market.

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Williams College in Massachusetts is facing financial aid cutbacks. More students will resort to personal loans as a result. (Photo: flickr.com)

More students are using personal loans to fund their college costs due to changes in financial aid policies. Along with the rest of the world, colleges and universities are feeling the financial strain of the recessionary economy. They are cutting spending, putting off new projects and programs and instituting hiring freezes. Some experts are speculating that schools soon will be forced to make more cutbacks in the financial aid programs.

Morton Schapiro, president of Massachusetts’ Williams College, is in just that position. Williams College has had a long-standing reputation for not considering a student’s financial situation when deciding on their acceptance. Called a “need-blind” policy, this is a way for students of varying income levels to get accepted to the school of their choice without having to worry about financing. Shapiro agreed that this policy may not be able to withstand the recession. “The major dial you turn for most financial crises is that you admit more students who can pay, as a way of increasing revenues…with the tremendous decline in wealth, I think fewer people will hold to the need-blind [policy].”

Even Worse News

Molly Corbett Broad, president of the American Council of Education, stated that endowments are getting smaller while enrollments are getting larger. “The farther down the food chain you go in terms of endowment per student,” she stated, “the harder it will be to sustain need-blind admissions.”

This change in policy could affect all universities and colleges on some level. Douglas Bennett of Indiana’s Earlham College, is one of the strong proponents of college admission reform. At Earlham College, almost 20 percent of the students are from low-income families and receive some form of financial aid. Bennett stated, “If you are truly need-blind, you can go broke…It is like writing a blank check to the world.”

Endowments

As of now only schools with large endowments are impervious to the recession, but even they are experiencing declines in funding. As Bennett added, “Nobody thinks the market will turn around and go back to do what it did before. That means everyone is having to plan for a more difficult and turbulent financial environment to bring our expenses in line with resources.” Students are bracing for the after effect of the economy by looking at second jobs, personal loans and family aid. They know that the scholarships and financial aid that once was available is no longer there.

The Goal of Educational Institutions

Regardless of the economy, the goal of colleges and universities is to make the degree accessible to as many students as possible. Many are looking at their projected budgets and project management scheduling as a sure-fire place to cut back. Stanford University is cutting five percent straight across the board in every department and cutting $45 million from its operating budget. The school is planning on issuing moderate yearly raises to staff in an effort to remain “committed to its financial aid” plan. Ms. Lapin, Stanford spokeswoman, added, “Maintaining access to Stanford for top students, regardless of costs, remains a top priority.”

Students of the Future

Students of the future face some hefty financing problems to fund their college years. Hopefully, with the help of personal loans, family assistance and part-time jobs, they will be able to complete their degrees. If colleges and universities are equally committed to making school affordable, sticking staunchly to their financial aid plans, students will be able to reach their goal of a higher education.