Most people are familiar with the old adage of the forgotten middle child. The youngest draws the coddling of being the smallest, while the oldest child has all the expectations of being the first to do whatever.  It harder to get attention when you are that one in the middle. It can seem like you are stuck on pause. When it comes to looking at the road ahead for those who are in the middle income category regarding affording the basic necessities of retirement, being in the middle has finally gotten some attention.

Of course the purpose of this particular study was to  survey the market for investing in senior living facilities and communities.  The silver tsunami of 10,000 people retiring a day will continue for several years and it will remain a big draw for investment.  It seems that the demand will be there but not the bucks to afford all the lovely accessible spaces that are being built.

The  condensed take on this was in Barron’s magazine just last week.

There may be more demand by 2029, but about 54% of middle-income seniors aren’t expected to have the financial wherewithal to pay for senior housing, even after using the proceeds from their existing homes, according to findings released this week by The National Investment Center for Seniors Housing and Care, a nonprofit that tracks the market. Researchers defined middle-income seniors as those aged 75 to 84 years old whose financial resources—Social Security, pensions, 401(k) and other investments—annuitized using actuarial tables would yield roughly $25,000 to $75,000 a year or up to $95,051 for those 85 and over. These seniors are typically too wealthy to qualify for public means-tested programs like Medicaid but not flush enough to pay for senior housing out of pocket for a sustained period.
That last phrase – for a sustained period kind of bumps up against expected increased longevity for this same age group.  Hark back to seniors and now boomers biggest fear of running out of money. Accountants are saying we in the middle between subsidy and buying that luxury one story villa, are not going to be able to buy what they are selling.  It also raises the question for those who stay in their own homes as to how much money is needed to sustain what I call ‘living style’ (affording in home help etc.)
Okay so where is my usual kernel of hope that things will turn out better than it appears? First, this is the reason many seniors and boomers are staying in their homes and going to make that work. Second, I am glad to read a blogger on Senior Housing Forum address this big chunk of the the population as The Forgotten Middle. We finally have a name! Third, he suggests that the senior living industry has to produce a more basic product. In my view, the razzle dazzle of granite counter-tops in senior villas and sous chefs for assisted living dining may fade when there are fewer buyers.
If the largest share of seniors (40-43%) are going to be in this middle income bracket, this study should shake up the industry.  They have to stop producing so much of what people do not want or can not afford.  At this point my mind shifts to all the wonderful examples of village to village networks, co-housing communities, ADUs accessory dwelling units on the main properties  and other ‘tiny’ home examples that are cropping up nationwide. And of course as I am always promoting new ways to co op and share resources for seniors to stay in their homes as they age. There is much room for invention and creativity on all sides.
If you want to get deep in the weeds of the whole original study with lots of supporting evidence, here you go: