Michael Pollick

Is Florida still Attractive to the Boomers, as a Retirement Location?

By Michael Pollick

Edited by Ivan E. Gillis

Each and every day from now until 2023, roughly 10,000 Americans will blow out the candles on their 60th birthday cake. That means four million people a year face impending decisions on whether to stay where they have been earning their livelihood, or to indulge their dreams by moving to their idea of retirement heaven.

At stake are hundreds of billions of dollars to be newly funneled into communities around the nation and world as the "mailbox economy" -- checks arriving in the mail -- rapidly swelled by boomers growing old.

As far as retirement destinations go, Florida is still the 800-pound gorilla. But even experts bullish on the Sunshine State's prospects think its share of older movers will decline by about 20 percent during the next two decades as other states take a bigger and bigger piece of the retirement pie.

The first trend is increasing competition, which is creating a lot more choices for older adults and, of course, creating additional competition for Florida," said David Baxter, senior vice president at Age-Wave, a San Francisco consulting firm that used the 10,000-birthday-a-day line to launch one of its expansive boomer studies a few years ago, grandly titled "The New Retirement Mindscape Study."

Others also think that the numbers of stay-at-homers will bulge, pushed not only by comfort factors like friends, family or a trusted doctor, but by the financial pain inflicted by corporate downsizing, the real estate downturn and the current financial fiasco on Wall Street.

"The research we have done indicates 9 out of 10 people want to stay where they are as long as possible," said AARP spokeswoman Nancy Thompson.

John Stapleford, an economist with Moody's Economy.com who tracks Florida, says, "You guys down in Florida are just not going to see the tsunami you might expect."

The outcome is critical for Florida because that same housing boom-turned-bust has left the state with a large inventory of unused homes and condominiums.

The current Wall Street melee "is going to have a particularly strong impact on boomers," said Lew Goodkin, a Miami real estate consultant who maintains homes in California and South Florida. "Their pension funds and their normal investments are taking a big hit. They are frightened of their own personal situation. They don't know whether to buy. They are afraid to move. Then there are those who are willing to move who are finding it difficult to get financing."

"A lot of the things that were so tremendously appealing in Florida, like affordable product, are certainly less so than in the past," Goodkin said.

While Florida real estate prices have come down hard since 2005, other costs continue to rise, Goodkin said.

"High insurance rates -- that is a killer," he said. "It is like having another mortgage on your house."

Their own view of the world

The fact that the boomers' parents favored Florida familiarizes them with the state, but it is not a reason on its own to make them move here.

Boomers tend to do things their own way.

"The boomer parents were sort of sun migrants," said Gene Warren, a retirement consultant in Phoenix. "They wanted a nice, sunny place where they could sit around and wait to die."

Boomers are very different. "They are not so much sun migrants as they are amenity migrants," Warren said. "What we are seeing is that the baby boom generation took a look at how their parents did their retirement and have decided it is not all that their parents thought it would be."

While North and South Carolina have often been cited as places that are gaining well-off older residents, states that many of us do not traditionally think of as retirement magnets are coming on strong: Texas has No. 1 Florida and No. 2 Arizona in its sights, according to Warren.

Other states, particularly those with a moderate climate like Virginia, Tennessee and Mississippi, are picking up steam as well.

Ron McMullan formerly lived on St. Armands Key and still owns a lot near the water in Placida, but he has moved for keeps to the small Shenandoah Valley town of Grottoes, Va.

"The whole idea of retiring to Florida is a thing of the past," McMullan said. "Living elsewhere in the world is thrilling. But Florida has kind of lost its glimmer for me."

McMullan does not feel like he is giving up that much in not having a beach to drive to for the day. "I can see the Skyline Drive from my front door. I can walk to a trout stream."

From nearby Charlottesville, McMullan can take an Amtrak train into downtown Washington, D.C., he points out. And there are four colleges within 15 minutes of his home, providing cultural and entertainment choices during much of the year.

Other boomers are choosing even more exotic options. The thought might still seem quirky to most Americans, but Latin America is picking up steam as a final destination for gringos. On a recent trip to Panama, Sarasota commercial real estate agent Ian Black contracted to buy an un-built luxury condominium on the Pacific Ocean in a rapidly developing part of Panama City.

"It was the location that sold me," Black said. "When this is built, we could walk to a brand new Johns Hopkins hospital. And they are building a Trump hotel and casino right beside us."

The power of the mailbox

Thirty years ago, if someone was a retiree making a move across state lines, there was better than a one-in-four chance the move would take them into Florida. But that percentage has declined steadily.

Fishkind and Associates, a prominent Orlando economic consulting firm, regularly displays a chart that shows Florida's share of the 65-plus retirees on the move declining by about 20 percent from 2000-2010 to 2020-2030. But as the total U.S. population over 65 swells during those ensuing years, Florida still catches a good ride, says founder Hank Fishkind.

"The pool of potential people who can move goes from 8 million to 16 million, so even if our share comes down by 20 percent, which would be huge, the number of movers who move here would actually increase," he said.

But others have much different takes.

Bill Haas is a sociologist tracking boomers from the University of North Carolina at Asheville. With backing from the Institute for the Future of Retirement, he is slicing and dicing a new data set from the U.S. Census Bureau called the "American Community Survey" that is giving Haas fresh geographic inputs to work with each year.

"The numbers are taking us away from Florida," Haas said, citing steady declines in the state's retiree market share from a 1980 peak.

While his full study on the mailbox economy has not yet been published, some of his key findings already have appeared on the Web. They show that Florida, while still the top receiving state for those 60-plus, "continues its downward trajectory," Haas said.

Florida hit a high of 26.3 percent of all movers 60 and older in 1980. In 2000, the number had dropped to 19.1 percent, and then to 16.6 percent in 2006, Haas' posted findings show.

The state's share of the pie got squeezed down to 13.2 percent in 2006, Haas told the Herald-Tribune last week after crunching the numbers.

The theory goes that, after a while, places that have been high-intensity migration sites for retirees, like California in the past and now Florida, lose their attractiveness, Haas said. "That theory would leave us to believe that Florida, which had 25 percent of all older migrants going to it, is becoming less and less attractive."

Emulating the mindset and accent of an interviewee, Haas intones: "'I left New York City and moved to Miami and now both of them are too busy and have too many problems.'"

Destination Florida?

For a brief few years in the early 2000s, Florida had an agency charged with luring boomers, Destination Florida.

Warren, the Phoenix consultant, is well aware of this because he wrote the position paper on the need for such an agency on behalf of a Florida developer, who then presented it to former Gov. Jeb Bush.

"The whole idea was not that Florida was not getting more retirees each year, but that the rate of growth was slowing down. This really started to worry them," Warren said. "They opened the Office of Destination Florida within the Department of Elder Affairs."

The project was unceremoniously shelved in 2004, but the huge financial stakes remain.

Florida netted about $1.4 billion from retirees in 2000, Warren's study showed. "In other words, they put $1.4 billion more into the economy than they took out, and that doesn't include property taxes. It goes crazy when you put property tax in there," he said.

Haas, the North Carolina professor, did his own take. Using 2005 data, he attempted to estimate how much was flowing into each Southern state and how much was flowing out. He figured that $2.2 billion in fresh mailbox economy checks flowed into Florida.

But that windfall was reduced by $1.3 billion because of older Floridians leaving the state.

"The net effect is reduced by $894 million when you consider retirees leaving Florida for other states competing for retirement populations," he said.

In terms of a concerted state effort, Florida appears to be doing very little to balance that equation.

A spokeswoman for Florida's Elder Affairs Department seemed to have a vague recollection of Destination Florida, but not much more. "That is not a program that currently exists," Kassie Elekes said.

State and local officials were not sure where to send a reporter seeking the team in charge of retiree attraction. The way the tourism and economic development bureaucracies are set, officials do not even relate to the term "retiree attraction."

"Well, I don't want them to retire here," said Virginia Haley, president of the Sarasota Convention and Visitors Bureau. "Every time one of them converts to a resident from a visitor, I have to find a new visitor."

That sentiment does not surprise those who are developing the field.

"We are kind of the red-headed stepchild between economic development and tourism," said Diana O'Toole, program manager of the Mississippi Development Authority's Hometown Retirement program. "They don't exactly know where to put us. But we contain elements of the best of both."

Haley should reconsider her sentiments, O'Toole says.

"She is losing sight of the fact that when a retired person relocates to Sarasota, their relatives and friends are going to visit them there," O'Toole said. "And what are they going to do? They are going to go to the local tourist attractions, restaurants, and hotels and buy gas and food. So they brought in six to 10 tourists while she is looking for one."

Targeting wealth

When the average retired U.S. couple moves into town, they bring with them $42,500 in cash flow, including about $6,500 per couple per year in Medicare benefits, says Warren, the Phoenix retirement expert.

Over at the University of North Carolina, Haas figures a retired couple coming into an area is the economic development equivalent of 1.4 new factory jobs.

Both agree that retiree attraction is gaining new credibility as a form of economic development, one that lends stability to a community in much the same way that new employers do.

Mississippi was a pioneer in formally recognizing this mailbox economy as economic development. Twenty years ago, the state created its own criteria -- from adequate health care providers to parks and entertainment -- for what it calls "Certified Retirement Communities." Once a community like Gulfport is accepted into the group, it must go through an annual self-audit to show that it still qualifies. Each town that joins has a team of volunteer ambassadors whose mission is to show potential new residents around town.

Marcia Crawford, though part of the Harrison County Development Commission, is really a lieutenant assigned to O'Toole's regiment -- in charge of luring retirees to Gulfport and other surrounding communities such as Biloxi and even Long Beach, where she and her husband live. Crawford is from Connecticut and her husband is from Washington, D.C. They moved south in 2004.

"We looked at places everywhere from the Eastern Shore of Maryland to Maine, the Outer Banks of North Carolina to Puerto Rico," Crawford said. "We kept coming back to here, where we can retain an outstanding quality of life and still have money left over."

Two years ago, Tennessee started "Retire Tennessee" as a pilot to attract retirees, and immediately listed nine suitable counties. Ramay Winchester, who is in charge of Tennessee's program, reports directly to the state's top economic development officer.

Winchester attends as many as 12 upscale boomer expos each year, held by a company called Live South Real Estate. The shows are held in tony suburbs, places like Schaumburg, Ill., outside of Chicago, where the median income of $65,000 is 30 percent higher than in Illinois as a whole. The demographics of the Live South shows are even higher.

"Fifty-six years old, household income $250,000 and two million in assets. Those are the people we want to come to Tennessee," says Winchester, who does not even promote the second-home market "because they leave their bank account where their first home is."

Live South events go "after the top third of the market," said David Robertson of RPI Media, the Wilmington, N.C., company that runs the events and publishes "Ideal Living" magazine. In addition to high net worth and household income, "we are looking for a strong resale market. Those are the three things we know are important to bring buyers who have the ability and interest to purchase," he said.

This year, RPI dropped Detroit and moved that show to Toronto, away from what Robertson calls Rust Belt cities, "where jobs are leaving and the economy is contracting, and property values have been falling for a decade." He previously dropped other former industrial powerhouses like Cleveland.

"Those people in places like Cleveland don't have options anymore because the values of their homes have fallen below what it costs to move to Florida or North Carolina, to a desirable destination in the South," Robertson said. "Their option is to stay or move to another place that has a lower cost of living."

There is a lot more at stake than just the immediate retirement checks that this one-generation can deliver to a state or community, said Warren, the Phoenix consultant.

"There are just as many baby boomer children as there are baby boomers, and then you have baby boomer grandchildren," he said. "People who attract retirees now are going to be set for the future. If you get in the game late and start 10, 15 years from now, you are limiting your potential."