The facts and figures concerning boomer debt are enough to make me pull the covers over my head, throw away the newspaper and turn off the television. Debt levels for boomers are rising faster than I can get out of bed in the morning. According to Statistics Canada 2012 survey of Financial Security, the average debt load for those 55 to 64 is $155,900. The average mortgage is $155,00 and the average line of credit is $44,700.
If you’re one of the lucky ones who is debt free these figures should confirm that you’ve made the right decisions or been lucky or both.
The rest of us are able to compare our debt with the Canadian average. Mine is, safely to say, square in the middle of the pack. Many of us are struggling to make ends meet.
Is it that I’ve done everything wrong for the last forty years; that I’ve run out of luck or is it something much more fundamental that is changing the way older Canadians are trying to manage their finances? Should we be searching for new solutions?
I’m observing that boomers are craving four must- haves:
1. to keep working
2. to live in reasonably sized homes
3. to be surrounded by companions
4. to have access to lots of interesting activities
The trouble with this quartet of wishes, it that it sinks many boomers into debt, or at the very least, stretches the budget.
In a new book, How We Live Now: redefining home and family in the 21st century, the award-winning social psychologist Bella DePaulo throws out the old blueprint for the nuclear family to unveil what is really happening across North America. DePaulo is described as “American’s foremost thinker and writer on the single experience” in the Atlantic magazine. Her groundbreaking research into the expanding, yet challenging life of single women led her naturally to the investigation of a variety of thriving“life spaces,” viable alternatives that redefine what home and family means. Her research points to why we’re short on funds, and how we might be able to solve this issue.
At least part of the reason why boomers are in debt is because the rules of retirement and retirement planning keep changing. On the positive side, who knew thirty years ago that the houses in Toronto and Vancouver that once sold for $60,000, today would be worth well above $1-million. On the negative side, we face a long list of unknowables: who knew ten years ago that the stock market crash of 2008 would affect our portfolios severely and then many boomers would decide to hold their assets in low-interest saving accounts or GICs after the shock? Who could anticipate that our kids would be living with us into their thirties and requiring financial support to purchase houses of their own? Who can anticipate if parents require home care, or if we ourselves will become ill or disabled? Who can ever adequately anticipate the impact of a divorce?
That’s why DePaulo travelled from coast to coast to explore alternative living spaces, such as groups of friends living together, and not just young adults. In the U.S., she reports that this “arrangement has become so popular among woman of a certain age, that it is, of course, called the Golden Girls Homes.”
Co-housing is the term that DePaulo uses. “Co-housing communities, in which people create neighbourhoods with homes arranged around an open green space” is how she describes them. It’s an imaginative, twenty-first century version of the cohesive village where co-housing residents maintain private homes or units while sharing meals a few times a week, along with social outings and get-togethers. Everyone DePaulo studied is seeking time with other people and time alone.
The huge challenge for boomers is how to retain a decent standard of living, a fulfilling life with friends and family coupled with personal space and interests, without succumbing to the huge debt loads that can spoil your retirement years, or overwhelm you with anxiety.
One of the most disturbing statistics I found is in the ten- year rolling Ipsos Reid survey of 12,000 Canadians age 55 to 64 who said “they strongly agree that being able to retire is a constant concern.”
If you compare that level of anxiety to the quality of life in isolated homes or condos, apart from others your own age, or from your children, you can see immediately that it might be the right time to adjust our expectations of what home looks like for the 21st century retiree.
When I was thirty, a group of colleagues at a magazine in downtown Toronto met at the woman’s club 21 McGill for our Christmas lunch. We’d been striving to “put the magazine to bed” for the last few days, and each of us had enormous responsibilities to prepare for the holidays. Presents, arrangements with guests, holiday dinners— plus the psychological highs and lows of the season were pressing on each of us.
At table, we had a few too many glasses of wine, and over dessert we started talking about communal living. Some of us, including myself, had lived in student co-ops at university. It suited me in my early twenties, but I couldn’t see going back to that life. Then the conversation got heated. Why couldn’t we purchase a multi-plex building or large home to be divided into spacious units, share resources, washers and dryers, snow blowers, even cars? A few of the woman were married with children. They would require larger units while single women could do with smaller ones. All of us were gainfully employed and could handle sharing the mortgage.
Rather than ending in the afternoon, the discussion went on long past the dinner hour. We couldn’t stop talking about how reasonable and how enjoyable it could be.
Now three decades later, most of us continue to live in private homes, as do most boomers. A few have downsized, but I don’t know one who lives in a small glass and concrete shoebox called a condo. Most of us are still carrying debt, either in home equity lines of credit, or like me, with a mortgage. A few husbands have passed away or gone away. Some of our kids still live with us. All of us are facing the looming vicissitudes of our senior years, health concerns, money concerns, and the desire for meaningful companionship and activity. Every last one of us has retired from full-time work, but remains engaged in our profession either through part time employment or consulting. Most of us still require financial compensation to maintain our lifestyle, to help out our kids, or to deal with the affects of divorce.
Maybe now we should plan for the second meeting of this group. According to DePaulo, we’d be catching the crest of the wave of change, we’d satisfy my must-have list for boomers, and we’d save money.
I’ll be talking more about boomers’ living habits in my next blog. If you have suggestions or anecdotes, please comment below or email me at email@example.com