[vc_row][vc_column][vc_column_text]Real estate pundits love to talk about millennial population trends and how to tailor your investments to profit from them.

One of the most common examples is younger people plan to rent rather than buy, at least in the near future. What almost nobody is talking about, yet, is the fact that many Baby Boomers are set to follow this same trend and here’s why…

Increasing Tenant Population
There’s a reason why this age group is called the Baby Boomers. After World War II, there was a massive childbirth boom. The consensus birth year range of this population is 1946 and 1964, which means Boomers are roughly 54-72 years old today. As far as sheer quantity, estimates suggest there are around 80 million Baby Boomers.

Another important detail about this population is the median age is 62. This statistic is significant because 62-67 is the typical range in which people start to consider retirement.

The resulting trend is thousands of people leaving the workforce every day, and each of them having to figure out how they’re going to handle their post-retirement finances or their lack thereof.[/vc_column_text][gem_quote style=”4″ no_paddings=”1″]The Insured Retirement Institute reports only 23% of Boomers believe their savings to last throughout their retirement or that they have done a good job preparing for retirement. [/gem_quote][vc_column_text]Lack of Savings
The most important thing you can do to prepare yourself for retirement is to build savings and assets to sustain you for decades after leaving your job. Unfortunately, many Baby Boomers have not adhered to this principle, and unfortunately, do not have adequate resources to sustain their lifestyle in retirement. Consider these statistics from the Insured Retirement Institute:

24% Have No Savings
The most troubling subgroup of the Boomers is the one that hasn’t saved at all throughout their lives. Instead, they spent every paycheck in full and are still just getting by. This group will need to continue working as long as possible and make difficult lifestyle choices if they ever want to leave the workforce.

Less Than 30% are on Track
Even those that do put money away are saving at a slow rate. The result of doing so will be less tragic than for those with no savings, but still leaves them insufficiently funded for retirement.

Roughly 50% Live Off of Social Security
The default choice resulting from a lack of financial responsibility is relying solely on social security benefits. Unfortunately, these payments are often not substantial enough to sustain the same lifestyle.

Desire to Retire
Despite many Boomers having little in savings, they still want to retire. Not only does this desire fit with basic human instinct, but also this population has been sold on the “Golden Years” their entire lives. While a younger person today might expect to work until 70 or older, Boomers generally expect to retire around 65.

The issue is not that they want to enjoy their “Golden Years,” but rather they cannot afford it. So what will Boomers do when they seek retirement while lacking the funds to sustain their lifestyle? The answer is renting, and likely downsizing significantly. Doing so will reduce their monthly expenses and allow them to stop working.

Home Values
Baby Boomers subscribed to the school of thought of their home being their most significant asset, and as a result, it is their primary and often their only investment. Many of them bought into the housing market decades ago, and are now reaping the benefits. Not only have they been pouring money into their homes generating equity, but the properties have also appreciated over time. Those two effects combined make for a powerful asset.

While the wealthiest Boomers will hold onto their houses, many will not be able to afford this option for two primary reasons. First, they may still have mortgage payments they cannot afford to continue paying on retirement income, which will drive them towards affordable rentals. The second reason is they may consider their home as somewhat of a retirement account. While they may not have invested in 401ks or IRAs over their careers, they can sell their homes and enjoy a sizable nest egg from the profit.

From the Horse’s Mouth
While looking at trends is useful, it’s even better to hear what Boomers desire directly from them. Fortunately, we have the Freddie Mac 55+ Survey to educate us on this population further.[/vc_column_text][gem_quote style=”4″ no_paddings=”1″]The crucial statistic revealed from this study is of the Baby
Boomers who plan to move again, 71% plan to rent.[/gem_quote][vc_column_text]This number is not population-wide, as many responders will stay in their current homes for decades more, but it still illuminates the mindset of a Boomer on the move. Ultimately, the majority of them believe when moving into a new home, renting is preferable to buying.

How You Can Profit
Whether you’re a wealthy Baby Boomer or an investor preparing for the future, you can profit from understanding the trends of this population. One of the best ways to do this is to invest in affordable housing through a private real estate fund.

Investing in a private real estate fund gives you access to experienced fund managers with expertise in acquiring profitable assets. You enjoy the benefits of their knowledge and access to opportunities without devoting time to researching markets, searching for lucrative opportunities, or hiring a renovation and a management team.

As Baby Boomers approach retirement, investment opportunities will be readily available as will an abundance of renters. Noticing this trend along with the millennials’ inclination to rent and taking action now by investing in affordable housing in high demand areas could pay dividends for decades to come.

That’s the benefit of seeing trends others do not and staying ahead of the curve.[/vc_column_text][/vc_column][/vc_row]