Are boomers betting the farm on the house?

Chances are you won’t retire debt-free like your parents’ generation.

That’s the conclusion of a study by the National Center for Policy Analysis (NCPA), a nonprofit, nonpartisan public policy research organization dedicated to promoting free-market alternatives to government regulation. The study compared the pre-retirement spending habits of today’s middle-aged (45-54) and older workers (55-64) with those in the same age groups 20 years ago. It found that more boomers carry mortgages, and spend a higher percentage of their income servicing that debt, than their predecessors.

Here are some of the findings:

  • Home mortgages comprise almost three-quarters of all consumer debt, and three-fourths of middle-aged and older workers’ households have mortgages.
  • From 1990 to 2010 the share of expenditures on housing — including principal, mortgage interest, taxes, maintenance and insurance — for these age groups increased about 25 percent.
  • For 55 to 64 year olds, nearly half of this increase was due to an increase in the interest portion of housing expenditures — even though mortgage interest rates have fallen over time.
  • The portion of income boomers spend on mortgage interest increased 47 percent, from 4.3 percent to 6.3 percent.

Housing debt has risen for several reasons, according to NCPA senior fellow Pamela Villarreal:

  • Since a higher percentage of pre-retirees purchased their first home at a later age, many will still be paying for their homes when they retire.
  • In the mid-1990s, the Federal Housing Authority allowed more borrowers to qualify for loans with lower down payments, bumping up the size of those loans.
  • Instead of paying off their mortgages, many baby boomers borrowed against the equity in their homes.

And then there are the effects of the Great Recession on boomers’ children.

“Fifty-nine percent of these parents are providing financial support to adult children who are no longer in school,” Villarreal said. “Nearly one-third has paid off student loans for their children.”

As they say in Vegas, never bet against the house.

The age of distracted viewing

Half of all cell phone owners use their devices while watching TV, according to a new study by the Pew Research Center. Owners use their phones to engage with content, avoid advertising or interact with others. The report is based on a survey of 2,254 adults via landline and mobile phones.

The numbers drop dramatically with the increase in an owner’s age.

First the general stats. Of the 88% of American adults who own cell phones:

  • 38% use their phone to keep themselves occupied during commercials or breaks in something they are watching
  • 22% check whether something they’ve heard on television is true or not
  • 6% use their phones to vote for reality show contestants.

“Taken together, that works out to 52% of all adult cell owners who are ‘connected viewers’—meaning they took part in at least one of these activities in the 30 days preceding our survey,” the center reports.

A deeper dive into the numbers shows that as you age, you are less likely to use a mobile phone while watching TV:

  • While 81% of mobile phone owners in the 18-24 age bracket use their phone while watching TV, only 29% of those aged 55-64 and 16% of adults over age 65 multitask.
  • 73% of the 18-24 crowd uses phones to distract themselves during commercials while the numbers for the two older groups drop to 16% and 9%, respectively.
  • 45% of the 18-24 cohort uses the phone to fact check TV content while, in the two older groups, those numbers plummet to 8% and 4%, respectively.
  • Only 1% of adults over age 65 see what others are saying online about the program they’re watching. The figure rises to 28% for the youngest age group.

The numbers are similar for owners who use their mobile devices to interact with friends or contribute thoughts about televised content. In the 18-24 group, 28% post comments, 43% exchange test messages with others watching the same program and 7% vote for a reality show contestant. Compare that with adults over age 65, who rarely post comments (1%), seldom exchange text messages with other viewers (4%) and don’t vote for contestants (3%).

What does that say about engagement among older viewers? Are they too old fashioned to use new devices or do they have longer attention spans? Are they less inquisitive or more patient? What do you think?

Jeff Widmer

Working for life

The headline grabbed my attention: “The Secret to a Successful Retirement: Don’t Retire.” It adorned an article on The Street about a study by Boston College’s Center for Retirement Research: “The best financial advice for the growing number of Baby Boomers eagerly approaching retirement is: ‘Don’t.'”

The study found that a combination of depressed home prices, poor stock market returns, inadequate savings and diminishing pensions means that many people approaching retirement have one alternative: to work longer.

That wasn’t what I was expecting to read. From the headline I thought the article would take a contrarian point of view: that some people find fulfillment in work and would miss that in retirement, along with other benefits like socialization and lottery pools. That busy people seem happier than lazy ones, or just don’t have as much time to complain. That spending more time on Facebook or hugging the TV remote doesn’t lead to a spiritual awakening.

Look at Paul McCartney. He just turned 70 and he’s still performing.

If we believe what people say they’ll do–a big if–most Americans plan to work past age 65–some 74 percent, according to a study released in May by economists at Wells Fargo Securities LLC. Most seem worried that the Great Recession has blown a hole in savings and retirement plans, but I think the reasons for hanging on run deeper.

Work is as much about engagement as it is about money. Yes we need to pay the mortgage but we also need to stay sharp and work helps us to apply that focus throughout our lives, on and off the job. It’s good discipline.

So the next time someone asks when you’re going to retire say “never.” They’ll think you need the money. You’ll know the real payoff.

Jeff Widmer

Boomers continue march to early retirement

Despite protests that they can never afford to retire, a new survey shows that baby boomers are still leaving the workforce before the magic age of 65. The trend not only contradicts the conventional wisdom spouted by business and financial journalists but may create problems for a federal government already struggling to pay its bills.

In a 2011 survey of 1,012 respondents born in 1946, the MetLife Mature Market Institute found that:

  • Almost half (45%) of 65-year-old boomers are now fully retired, up from 19% in 2008.
  • The majority of boomers (63%) have started receiving Social Security benefits.
  • Half of those retirees started collecting before they had originally planned, while only 5% retired later than originally planned.
  • Almost 4 in 10 respondents (37%) who retired earlier than they had planned cite health-related reasons for doing so.
  • Those who retired later than they had planned mention needing a salary to pay for day-to-day expenses (27%) and a desire to stay active (13%) as the reasons.
  • Six in 10 Boomers are at least somewhat confident in the ability of Social Security to provide adequate benefits for their lifetime.

The findings run counter to the popular belief that most boomers will work longer to make up ground lost to the Great Recession. They aren’t, and that has implication not only for them but for those who craft public policy.

— Jeff Widmer

Twitter use remains steady

Fifteen percent of online adults use Twitter, about the same number who said they used the microblogging service last May, according to a study by the Pew Research Center. As of February 2012, some 15% of online adults use Twitter; 8% do so on a typical day. Overall Twitter adoption remains steady, as the 15% of online adults who use Twitter is similar to the 13% of such adults who did so in May 2011.

“At the same time, the proportion of online adults who use Twitter on a typical day has doubled since May 2011 and has quadrupled since late 2010—at that point just 2% of online adults used Twitter on a typical day,” according to the center. “The rise of smartphones might account for some of the uptick in usage because smartphone users are particularly likely to be using Twitter.”

Twitter use is skewing younger, however. While Twitter use within the overall population remained steady over the last year, adults between the ages of 18 and 24 are the exception. Nearly one-third of Internet users in this age group now use Twitter, up from 18% in May of 2011 and 16% in late 2010. Twitter use by those in their mid-20s to mid-40s largely leveled off in the last year.

You can read the full findings here.

— Jeff Widmer

The high cost of high tech

Want to know where all of your money is going? Talk to your hand.

More than half of American adults believe technology like smartphones has made it easier to spend money. Only 3 percent say it has made it easier to save, according to a survey conducted for the American Institute of CPAs by Harris Interactive.

Adults who subscribe to digital services spend an average of $166 each month for cable TV, home Internet access, mobile phone service and digital subscriptions, like satellite radio and streaming video, a national phone poll of 1,005 of those adults found. That’s the equivalent of 17 percent of their monthly rent or mortgage payment. Those who download songs, apps and other products spend an additional $38 per month, on average.

“Given those expenses, it’s no wonder that 56 percent of Americans believe that technology has made it easier to spend money and only three out of 100 say it has made it easier to save,” said a spokesperson for AISPA. “Thirty-seven percent are split on the issue, saying technology has made it easier to both spend and save.”

Can you afford the high cost of high tech? Can any of us afford the alternative?

— Jeff Widmer

America gets its information on the fly

Nearly 9 in 10 smartphone owners use their devices for consumer research. They are using them to perform real-time searches to help arrange meetings with friends, solve problems or find information to settle an argument, according to a new study from the Pew Internet & American Life project.

Within the past 30 days, smartphone or cell phone owners said they used their phone to:

  • Decide whether to visit a business, such as a restaurant.
  • Look up a score of a sporting event.
  • Get up-to-the-minute traffic or public transit information to find the fastest way to get somewhere.

“The growing adaptation and functionality of smartphones has made them more entrenched in users’ daily lives,” The Pew center said. “Just-in-time cell users — defined as anyone who has done one or more of the activities above using their phones in the preceding 30 days — now comprise 62% of the adult population.”

Such real-time queries will have implications for organizations from financial services and healthcare institutions to B2C companies that want to reach consumers before they initiate a search.

Happy Nurses Week, Y’all

It’s Nurses Week, time to pay tribute to the people who keep us on our feet. For me it’s more than a Hallmark event. Our daughter graduates from nursing school in a year and has learned from the inside the rigors of the profession . . . as well as the value of digital charting. She’s opened our eyes to the importance of the profession.

We used to have luncheons and speeches to feat the troops. Social media has given us a more dispersed and immediate way. Sarasota Memorial in Sarasota, Florida is honoring staff on its Facebook page with tributes and a button to “Thank a nurse.” And the folks at HCA are giving a shout-out to their nurses in a humorous way. Here’s the video posted on the corporate site.

Survey gets a read on e-readers

A fifth of American adults say they have read an e-book in the past year. They read more frequently than their print-loving counterparts and they’re more likely than others to have bought rather than borrowed their most recent book.

Those are some of the findings of the Pew Research Center Internet & American Life Reading Habits Survey, which was released this week. As with most research from the Pew Center, the report goes into some detail. Here are the highlights:

  • A fifth of American adults have read an e-book in the past year and the number of e-book readers grew after a major increase in ownership of e-book reading devices and tablet computers during the holiday gift-giving season.
  • The average reader of e-books says she has read 24 books (the mean number) in the past 12 months, compared with an average of 15 books by a non-e-book consumer.
  • Some 30% of those who read e-content say they now spend more time reading, and owners of tablets and e-book readers particularly stand out as reading more now.
  • The prevalence of e-book reading is markedly growing, but printed books still dominate the world of book readers.
  • E-book reading happens across an array of devices, including smartphones.
  • In a head-to-head competition, people prefer e-books to printed books when they want speedy access and portability, but print wins out when people are reading to children and sharing books with others.
  • The availability of e-content is an issue to some.
  • The majority of book readers prefer to buy rather than borrow.
  • Those who read e-books are more likely to be under age 50, have some college education, and live in households earning more than $50,000.

Most of the findings in the Pew report come from a survey of 2,986 Americans ages 16 and older, conducted on November 16-December 21, 2011, that focused on people’s e-reading habits and preferences.

Email vs. texting: a generational divide?

Email is still the more popular mode of Internet communication but teens prefer texting, according to a pair of surveys. Is the split a harbinger of a shift in corporate messaging?

According to a new global survey 85% of adults use the Internet for email while 62% use it for social networking. Private research firm Ipsos conducted the survey among 19,216 adults in 24 countries.

Parse the demographic by age and you get a different story. A 2009 survey by the Pew Research Center found that 54% of teens were texting daily in September 2009. The quantity of those messages is also increasing at a quantum rate. Half of teens sent 50 or more text messages a day, or 1,500 texts a month, and one in three were sending more than 100 texts a day, or more than 3,000 texts a month. Output ranged from a high with older teen girls ages 14-17 of 100 messages a day to a low among the youngest teen boys of 20 messages per day.

“Text messaging has become the primary way that teens reach their friends, surpassing face-to-face contact, email, instant messaging and voice calling as the go-to daily communication tool for this age group,” the study said.

Since the survey, the Pew Center reports that the volume of texting among teens has risen to 60 texts for the median teen text user. In a separate survey, the center said smartphones are gaining teenage users. “Some 23% of all those ages 12-17 say they have a smartphone and ownership is highest among older teens: 31% of those ages 14-17 have a smartphone, compared with just 8% of youth ages 12-13.”

Texting could increase as more teens acquire smartphones, and their preference for communicating may supplant email as teens move into the workforce. While it’s overshadowed by social media use it’s a trend marketers might want to monitor.