Monday, August 29, 2016 / by Nicole Solari
What Happens When the Boomers Retire?
Retirement at around the age or 65 is a relatively new invention. It was invented in Germany in 1883. People received a pension or were paid to retire at 65 — but the program did not cost the government much because most people did not live long enough to retire for very long, or at all.
During the industrial revolution in this country, we had elderly factory workers slowing the assembly line down, hosing things up and calling in sick.
In 1935, Social Security was invented, but the idea of being retired and sitting around waiting to die persisted until sometime in the 1950s, when wealthier retirees would stop working and enjoy leisure-type activities that they could pay for because of their pensions.
Fast forward to 2016: There are people alive today who have been retired for 35 years. It takes a lot of savings to finance a fun 30-plus-year retirement, and not everyone has managed to put enough money away or had a job with a pension that could help finance decades of unemployment.
We live longer and healthier, and there are people well into their 70s and older who are still on the job. But for the most part, the oldest members of the baby boomer generation are retiring at about the same age as their parents retired.
We don’t know for sure what the youngest members of the boomer generation are going to do, and what they do might affect our industry as much as new technology does.
What a labor shortage means for real estate
Several industries are preparing for a 15-year labor shortage, which has already started because there might not be enough workers to replace those who retire.
It doesn’t look like there will be a shortage of real estate agents. But as people retire, they will leave the industry, and their experience will go with them. Other parts or the industry will be impacted as people retire, like the people who run real estate companies or who work for associations and MLSs.
Labor shortages in other industries might mean that fewer people will want to work as independent contractors, which is what most real estate agents are. They might choose jobs with benefits instead of becoming real estate agents.
Part-time agents could be the answer
The real estate industry is not too keen on the idea of part-time agents or brokers. But there are companies like mine that would welcome older experienced agents who want to work part-time. It might be an opportunity for real estate companies, our clients and the agents.
Older agents working with first-time homebuyers can benefit the buyers and the agent too. Some of the oldest agents can be a great resource for elderly homeowners and their families. We could pay older agents to mentor younger agents.
The job of being a real estate agent has never really attracted younger people or new college graduates. If that doesn’t change, we might need some of those older agents.
If we do not need them to work with clients, we might need them to help newer agents of all ages. The average age of Realtors has gone from 57 to 53, but the cause might be retirements rather than younger agents joining, or it could be a combination of both. And it’s still older than the median age of the rest of the workforce, which is around 42 years of age.
There isn’t any evidence that young homebuyers prefer working with a younger agent, and even if they do, older agents might work well with older home sellers, which is less work and usually pays better.
Can you teach an old agent new tricks?
Some have suggested that older agents struggle with technology and lose the ability to learn new things. It is possible that some are just not motivated to learn and would rather retire.
I know one agent who planned her exit from the industry to coincide with the launch of some new technology that she did not want to learn.
As I talk to other agents and brokers, I find that few have a succession plan for their business or company. Many are just going to quit when they retire. Some will keep their licenses active and refer business to others for a fee.
My own plans for what I will be doing when I am 70 and older, if I live that long, are kind of up in the air. It’s hard to plan that far ahead because I cannot see into the future.
I might be doing something different, or I might just keep doing what I am doing now. I know that I don’t want to be retired for 30 years. I want the opportunity to put all that I have learned to use.
How will the real estate industry change when all those older men who are leaders in associations and real estate companies retire? It is likely that they will be replaced by younger men, but we could also see more diversity in the leadership, either way, it is bound to have an impact.
There are many questions waiting to be answered.
- Is the average age of retirement the same for a Realtor as it is for others?
- Is your company open to the idea that some of your best agents in the next decade could be over 65?
- Will retirees from other occupations decide to get real estate licenses?
- What will the real estate industry lose or gain as large numbers of agents born during the baby boom retire?
- How many will retire?
- What will the real estate industry as a whole look like?
- What kinds of plans are Realtor associations and large real estate companies making that will help the transfer of knowledge from the retirees to new leaders?
- It remains to be seen, but industry changes are certainly in store soon.