|
Retirees bring new jobs, added revenue to local economy
By Holly Fisher
Supplements Editor
Britt Gilbert, president of Commonwealth Financial Group on Daniel Island, is seeing first-hand the effects of an older population in-migrating to the Charleston region.
Commonwealth Financial clients tend to be high net worth individuals, Gilbert said, those who are business owners or were business owners or top-level executives with stock options and retirement packages.
The growing retired population is an important subject for businesses in South Carolina to address, Patrick Mason, the co-founder of Center for Carolina Living said.
“As a receiving state—and we’re going to be a receiving state for 25 years—it’s an appropriate topic for businesses, and it’s an appropriate thought process to see how we can serve the needs of these in-migrating retirees,” Mason said.
Yet the question isn’t so much about what retirees want and need, but rather, what they don’t want and need.
“What is it they don’t buy? It’s a very short list,” Mason said. “They want and need the same things we all want and need.
“There’s always a tendency to draw a distinction between what we think retirees buy, how they act and what they want,” he added. “They want the same things a 29-year-old couple wants.”
While the basic needs may be the same regardless of age, Gilbert is serving a client who has achieved a particular lifestyle and is seeking specialized services. His clients aren’t in the asset accumulation stage, but rather in the asset management stage.
Many of them sold homes and businesses in the North and now have retirement incomes of $200,000. And with their stocks and bonds, they are looking for advice on how to manage their wealth, live comfortably and leave what is left to their families, he added.
As Gilbert anticipates more business, he also realizes the traditional financial planning methods—one financial advisor handling a client’s entire portfolio—won’t work.
Gilbert is making adjustments to his company to accommodate this new breed of client.
“In order to truly handle this wealth, we have to bring in specialists (such as estate planning attorneys). It takes a team approach and a more sophisticated way of doing things to work with a sophisticated client.”
Most affected industries
The three industries most affected by a large retiring group are shelter, retail and tourism, Mason said.
The in-migrating retirees need a place to live, which is good news for the housing market and construction industry. Many of the most affluent retirees will purchase timeshares or second homes. Many developers are adding townhomes and condos to their plans—attractive housing options for an older customer.
Retirees with more disposable income can spend more on luxury vehicles, golf memberships and dining out, therefore boosting retail businesses, which leads to more service jobs and more sales tax revenue.
Some of that retail spending also impacts the tourism industry. Not only are retirees visiting South Carolina—many researching the state for a possible retirement move—but they also travel once they move here.
According to the Center for Carolina Living, South Carolinians over the age of 65 spend a great deal of their tourism dollars in the state. Mason noted about 83% of their travel dollars are spent in-state. Annual travel expenditures are about $348 million, resulting in a total employment impact of 8,458 tourism-related jobs.
Pre-planning services
Funeral homes and related businesses can expect a surge in funerals and pre-planning services.
McAlister-Smith funeral home is planning to build a new facility in Goose Creek and will begin work this year on a new building off Bee’s Ferry Road, said Martha Archibald, manager of McAlister-Smith in Goose Creek.
She has already seen a rise in the cremation rate. As people retire and move, they opt for cremation—it’s easier, and they aren’t as closely tied to a traditional burial or gravesite, Archibald said.
McAlister-Smith partners with other organizations in an effort to educate the growing older population. Archibald works with the Tri-County End of Life Coalition, a group comprised of physicians, hospitals, hospice and other geriatric service providers. The coalition’s mission is to encourage people to write down their wishes and discuss them with family members.
Retirees impact
It is tough to predict just what sort of impact a larger aging population will have on the region’s business community and overall economy, but with South Carolina working to attract the more affluent retiree, it will likely be a positive one.
One-third of their wealth is tied up in their primary residence while another third is in other real estate, with the final third going to their business or to assets they plan to live on and pass on to family, he added.
Gilbert points to one client with a $4 million home but only a $150,000 mortgage.
“For someone whose primary residence is taken care of, and with $200,000 in retirement income, they are putting away a sizable amount of income. And much of it is for the purpose of creating a legacy,” he said.
Holly Fisher is the supplements editor for the Business Journal. E-mail her at hfisher@charlestonbusiness.com.
|
E-Mail This Article
Printer-Friendly Version