We are at the beginning of an aging crisis in the U.S. It was five years ago this week when Baby Boomers began to reach the age of 65 at the rate of 10,000 per day. By 2030 one out five Americans will be 65 years of age or older, and all will desire a Lemonade Retirement for their future.
For the most part, though, these Boomers have not planned well for retirement. Or possibly their retirement plan experienced a major setback. They are moving into a time when their income will be fixed. Close to 40% have savings of less than $50,000.
Furthermore, the results of a recent survey indicate that Baby Boomers hoping to retire soon have no idea how much money they will need in retirement. So if you are among this group you are far from being alone. This has been my argument in these posts several times over the last ten months (it is impossible for anyone to know this all important answer).
So what we do know for sure is that it will be a struggle for vast numbers to retire. The search will be on for new ideas and strategies to make retirements work, financially and otherwise.
This is where home sharing, an outgrowth of the sharing economy, comes in. Home sharing is when two or three people with no familial relationship or romantic involvement come together under one roof to share living costs. It has actually been around for many years. Remember “The Golden Girls”, “The Odd Couple”, and “Three’s Company”. However, fueled by the needs of Baby Boomers it appears there will be real growth in this phenomena in the U.S. beginning in the near future.
It seems clear that this will soon become commonplace for two reasons. 1. It will fill a significant need, and 2. both “for profit” and “non-profit” matching services are beginning to spring up in many states. As an example, Colorado-based Silver Nest is an online roommate matching service which is already doing business in 49 of the 50 states. Silver Nest charges a small fee to both parties to the equation, the homeowner and the renter. In exchange for their fee they do a compatibility survey between the parties. They also do a property verification. And importantly, they perform a background check on the renters.
A little bit more about why this is an idea whose time has come: the majority of Baby Boomers have a declared desire to age in place. But doing this can be a real budgetary challenge because for many Boomers housing cost is their largest outlay. Home sharing will clearly be a niche option going forward providing a way for Boomers to stay in their home as long as possible. It is perfect for the situation where one person is house rich and cash poor, while the other has cash and/or services to provide.
In addition to providing relief from financial stress to one or both parties, home sharing often relieves another problem, and that is isolation. Widows and widowers often struggle with feelings of isolation. It often provides a great sense of comfort just knowing someone else is in the house. In addition, seniors often suffer serious falls in their homes. These falls, if they live alone, can go undetected for days. Further, many Boomers travel frequently for pleasure and to visit family. Many find it preferable to have someone else living in their home while they are away on extended trips.
As a variation on this theme, I suspect there might come a day when home sharing doesn’t begin with a home owner seeking a home sharer. Perhaps it will begin first with friends agreeing to live together in their retirement years. Whether they do so in one of their homes or relocate to a more appropriate place will be the secondary consideration.
In conclusion, home sharing has been quite common for years in other parts of the world, but surely it will soon fill a big need here in the U.S. It’s a good solution to the problem of providing affordable living spaces for aging Baby Boomers. Could you see home sharing in your future? It may be a valuable tool to help create a Lemonade Retirement.