For Richest Retirees, It's Shuffleboard in Seattle
America’s wealthiest retirees are shunning the sun. Hunts Point, a Seattle suburb with more than 150 days of rain a year and about 400 residents, including Microsoft chief executive Steve Ballmer, had an average household retirement income of $200,431 in 2010. That puts it at the top of Bloomberg’s list of towns with the richest retired residents. “Most of the homes are on the water or near the water,” says Stan Humphries, chief economist at Zillow. “It’s right across the bridge from Seattle, it’s near Microsoft, and of course it’s a very pretty place.”
Small communities such as Hunts Point with easy access to cities are especially attractive to the nation’s wealthiest retirees. Bloomberg’s ranking, based on Census data, includes towns with at least 100 residents, a median home value of $500,000 or more, and an average retirement income of at least $75,000 (including income retirees derive from pensions, savings, and investments).
Most of the towns that appear on the list aren’t traditional retirement communities; nor are they clustered in the Sunbelt. Only four of the top 37 cities are in Florida. Three of the top 10 are villages within the Town of North Hempstead on New York’s Long Island. The area offers residents a marina and a less-than-30-minute trip to Manhattan by express train. Barton Hills Village, Mich., ranked No. 4, is set among hills on the Huron River overlooking Ann Arbor, home to the University of Michigan.
According to data from the Center for Retirement Research at Boston College, most of today’s retirees don’t move away from home, and those who do stay within 20 miles in order to remain close to family and friends. They’re also more likely to continue working part-time or to come in and out of retirement if they’re able. “If you look at the boomer generation, they’re the healthiest, best-educated people in the history of our country,” says Laura Carstensen, director of Stanford University’s Center on Longevity. “It’s going to be interesting to see what they do with their time and money,” she says.
Still, many of the 78 million baby boomers who have either just retired or are getting ready to “are seriously ill-prepared,” Carstensen says. According to a report by the Center for Retirement Research published in July, the typical household headed by a 55- to 64-year-old had $120,000 in combined 401(k) and individual retirement account savings in 2010, which would buy about $6,900 in annual income through a joint-and-survivor annuity.
Yet Anthony Webb, a research economist at the Center for Retirement Research, believes today’s retirees may represent a high-water mark. They’re more likely to have traditional pensions in which employers guarantee income through retirement; younger workers will have to depend on whatever savings they’ve socked away into 401(k) accounts. “The current retirees are living in somewhat of a golden age of retirement,” says Webb.