Michigan State University Extension
Tourism Educational Materials - 33809807
06/06/02
Attracting The Migratory Retiree
List of files and visuals associated with this text.
Source: Alabama
Author: Chestnutt, J. Thomas
ID: Circular CRD-56
Year: 1992
Start
Tapping
Economic
Potential
A CRD program of the Alabama Cooperative Extension Service,
Auburn University
CONTENTS
Tourism Attracts Retirees
Tourism Is Economic Development
Tourism Is Compatible With Attracting Retirees
Current Travel Trends
The 45-54 age group
The 55-64 age group
Tourism Marketing Implications
Concentrate On Nearby Large Metropolitan Areas
Do Not Ignore Other Large Metropolitan Areas
Concentrate On Specific Segments Of The Mature Market
Develop Group Tour Packages
The Retirement Industry
Success Stories
Guntersville, Alabama
Dothan, Alabama
Western Noprth Carolina
In-migrant Retirees And Economic Development
Benefits Of Attracting Retirees
Retiree Destinations
Retiree Living Preferences As Chosen Before Retirement
Retirement Counties
So You Want To Attract The Migratory Retiree?
References
The U.S. economy has changed substantially over the past 60
years. In 1920 slightly more than two-thirds of American
workers were involved in the production of specific
products or goods. In 1954, employment was almost evenly
distributed between the goods-producing and service-
producing sectors. In the 1980s, well over two-thirds were
in service-producing industries. Throughout the years, the
number of people employed in the goods-producing sector has
remained relatively constant at slightly less than 30
million people. The number in service-producing industries,
however, has grown from approximately 14 million to more
than 70 million, (Vis. 1).
There are two fundamental reasons for the reduction in
relative importance of goods- producing industries as a
source of employment in the United States. First, the
increased efficiency in production of goods over time has
released human and other resources for application
elsewhere in the economy. The percentage of the U.S. work
force required to meet the country's needs for food, fiber,
minerals, construction, and manufactured goods has
declined. Fanning represents a stark example. In 1920, a
large proportion of people working in the goods-producing
sector were engaged in farming. Today, only a small
percentage of those working in the sector do so. However,
the remaining farmers produce enough food and fiber for the
entire U.S. population and large amounts for export.
Similar examples could be provided in manufacturing.
The resultant increases in real wealth have allowed
individuals to demand the advantages provided by the
service-producing sector. Health, life, and retirement
insurance have become a requirement of nearly every
household. The use of credit cards, personal checking, and
other financial services formerly viewed as privileges are
increasingly deemed necessities. Individual mobility and
opportunities for education and recreation have increased.
Society can afford to provide relief from the stresses of
unemployment, aging, and physical handicap.
Change in world economic structure is the second major
reason for the decreasing importance of goods production as
a generator of U.S. employment. Jobs in the manufacturing
sector have been escaping the United States at an
increasing rate (Drucker 1980; Naisbitt 1982).
FIGURE 1(Vis. 1). Total U.S. Goods And Services Industries.
Employees by Industry Division, Selected Years, 1920-1990.
Source: National Commission on Employment Policy. The Work
Revolution, Washington, D.C. (1980-1990 est.)
As the tasks employed in manufacturing industry become more
standardized and the technology is perfected, firms seek
more favorable economic climates in other countries, at
least in the short run. For example, an increasingly large
amount of textiles, leather products, steel, automobiles,
and electronics are produced outside the United States.
Regardless of future increases in production efficiency,
the United States is not apt to regain its former share of
these products regardless of future increases in production
efficiency.
The major changes in sources of employment have been
accompanied by significant shifts in sources of personal
income. As might be expected, the percentage of personal
income generated by employment in the manufacturing sector
has declined, and that generated by employment in the
service sector has increased. In the 1980s, only $1 in each
$5 of domestic personal income resulted directly from
manufacturing, and only $1 in $40 came directly from
farming. Nearly half of the dollars available for personal
expenditure comes from the service-producing sector. Less
well recognized is the large share of personal income
controlled primarily by people of retirement age. In 1988,
13.8 percent of personal income came in the form of
transfer payments, most of which are social security,
Medicare, and Medicaid payments. Another 16.2 percent came
from dividends, interest, and rent. This property income
also is received in substantial measure by the elderly
population. Approximately $3 out of every $10 of personal
income represents non-earned income controlled largely by
elderly people, (Vis. 2).
FIGURE 2(Vis. 2). U.S. Personal Income, 1988, Source:
Survey of Current Business Bureau of Economic Analysis U.S.
Department of Commerce.
In past years developers frequently perceived the elderly
as an economic drag on the rest of the community. It was
thought that they contributed to the costs of public and
private services (for example, hospitals, nursing homes)
and did little to benefit community income.
These perceptions are changing. Recent research has shown
that the elderly population not only is an important source
of income that adds to local sales and service revenue but
also produces high employment multipliers. Summers and
Hirschl (1985) found that $4,000 of social security
payments is sufficient to create a job in the local economy
compared with $91,743 in manufacturing payroll or $65,516
in agricultural sales to produce one job. In fact retirees
are more apt to spend their income locally on items
produced with a higher degree of labor than are younger
workers or proprietors. Community leaders bent on taking
advantage of all potential economic development
opportunities must recognize the growing importance of the
silver haired economic base (Shaffer 1981; Pulver 1991).
Tourism Attracts Retirees
Tourism is also an important aspect of community economic
development. Unfortunately, the economic potential of
travel by the public often is not taken seriously. Public
decision makers fail to realize the true extent and
complexity of tourism, although every U.S. community has a
tourism industry of some kind. Almost every business
providing goods or services at retail is a part of the
industry. Tourism produces profits, jobs, taxes, and rents,
similar to most other economic activities. Furthermore, it
is compatible with most other economic activities, and
almost everyone is a tourist at one time or another.
Tourism Is Economic Development
Long considered "fluff," or a mere nuisance to local
residents, tourism today is big business. The U.S. Travel
Data Center (1990b) has published impressive statistics
related to tourism. Travelers spent $350 billion in the
United States during 1989, an increase of 7 percent frown
1988. This was equal to 6.7 percent of the gross national
product. Spending by travelers in the United States
generated 5.8 million jobs in 1989, paid nearly $74 billion
in wages and salaries, and produced $43 billion in federal,
state, and local tax revenue. If considered as a single
industry, the tourism sector is the third largest retail
industry in terms of business receipts. Those larger are
automotive dealerships and food stores.
Not only are statistics concerning tourism in the United
States impressive, but the industry is still growing.
Vacation travel in 1989 increased 7 percent over the
previous year (U.S. Travel Data Center 1989), making it the
sixth straight year of increase in vacation travel.
Alabama has benefitted substantially from these changes. In
1990 tourists spent an estimated $3.1 billion in Alabama, a
7.6 percent increase over 1989 an increase of 26 percent
over the past 2 years. These expenditures support more than
53,000 full-time jobs and in 1990 created more than 5,000
new jobs in the state. Alabama directly collected $67.7
million in state taxes and communities collected $70.9
million in local taxes (Davidson-Peterson Associates 1990).
The tourism and travel future for Alabama appears bright.
In 1989 the southeast region of the United States received
the greatest amount of travel with almost 350 million
person-trips, which was 30 percent of all domestic travel.
The southeast also enjoyed the greatest amount of growth as
a tourist destination in 1989 (Travel Data Center 1990a).
Tourism Is Compatible With Attracting Retirees
Among the economic goals of local communities should be the
development of a balanced economic base and the
identification of the comparative advantages of the
community from its resource and economic base. To achieve
this end, many communities have identified both tourism and
retiree attraction as one means of achieving economic
development goals. Consider the small prosperous town of
Hendersonville, North Carolina (population 8,000). Well
known for its success in attracting affluent retirees,
Hendersonville employed a four-pronged economic development
strategy focusing on agriculture, industry, tourism, and
retirees. Among significant tangible results is an increase
in bank deposits from $16 million in 1961 to $465 million
in 1990. Retirees are estimated to account for 60 percent
of these deposits (Hoffman 1990).
Officials of Hendersonville recognize that many individuals
who have retired in their community first visited as
tourists. Even though tourism and retiree attraction are
often identified as economic development strategies for a
community, few seem to recognize the important link between
the two. The community is not going to be able to attract
retirees unless they are first able to attract them as
tourists.
Recognizing that individuals approaching retirement are
likely to embark on travel in an attempt to find the most
desirable retirement location opens new and affluent
tourism markets to the community.
Current Travel Trends
Travel is now an important segment of American life styles,
and the rate of growth in travel during the 1990s should
exceed that during the 1980s.
Several trends may have an impact upon tourism related to
the mature Americans market. The mature citizen market
segment of most interest to communities desiring to attract
retirees is the 45 to 64 age group. Those 65 and older are
most likely to be currently retired and settled in the
community in which they wish to enjoy their retirement
years. The mature adults group of interest can best be
examined by dividing them into two segments: those
beginning to make tentative retirement plans, but who are
still examining many possibilities (the 45 to 54 age
group), and those very near retirement and likely to make
final retirement plans relatively quickly (the 55 to 64 age
group).
The 45 to 54 age group. Between now and the year 2000, the
greatest population growth will be in the 45 to 54 age
group. It should experience a 63 percent increase. Most
should remain in good health for the next decade.
Currently, more than 60 percent of this group indicate that
their health is good or excellent.
This particular group took 15 percent of all trips in 1987.
They are active business travelers and frequent users of
air travel, rental cars, and hotels. On the average they
are more likely than other groups to take day trips, travel
by camper or recreational vehicles, and travel outside the
United States (Cook 1989).
The 55 to 64 age group. Householders aged 55 to 64 have the
highest median net worth of any age group. The value of
their assets is 21 percent greater than the average. Most
members of this group are in good health and physically
able to engage in a variety of leisure activities.
Fourteen percent of all trips taken in 1987 were made by
persons of age 55 to 64 (Cook 1989). They are less likely
to spend discretionary income on purchases of material
possessions than on items that offer social reinforcement
and enjoyable experiences, such as leisure activities and
travel. This group is more value-sensitive than price-
sensitive. If they believe a product or service is worth
the cost, price becomes less important and only a matter of
what they can afford.
Tourism Marketing Implications
To be successful in attracting both tourists and retirees,
a marketing plan is necessary. Few communities can be all
things to all people. Priorities must be established,
audiences targeted, and a marketing strategy developed.
Based on current population and travel trends, several
marketing strategies warrant consideration.
Concentrate On Nearby Large Metropolitan Areas
Although Americans are taking more vacation trips, they are
spending less time on each trip. In 1985 the average stay
was 5.7 nights per trip. By 1989 this had slipped to 4.7
nights. There is a definite trend toward more weekend
vacation travel. In 1980 there were 311 million weekend
vacation person-trips. This increased to 427 million by
1989 (U.S. Travel Data Center 1990a). Such data support a
marketing effort targeting large metropolitan areas within
a day's drive of your community.
Do Not Ignore Other Large Metropolitan Areas
This does not suggest that local leaders ignore markets
several day's distance from their communities. While the
length of stay per trip is decreasing, individuals of more
than 45 years of age take fewer weekend trips and travel
farther (U.S. Travel Data Center 1989). Obviously, this is
a group to target when attracting potential retirees.
Therefore, tourism marketing areas should extend to other
regional metropolitan areas.
Concentrate On Specific Segments Of The Mature Market
An aggressive approach in marketing to the 55 to 64 age
group is necessary, because they will be finalizing
retirement plans. Off-season travel should be popular with
them. Most have fewer time restrictions, so travel
enticements should focus on opportunities for personal
growth in specific interest areas rather than on age.
In most cases, there is ample time to reach the 45 to 54
age group, but they must be contacted early so the idea of
retiring in a given community will have time to mature.
With above-average financial resources, reduced expenses,
and more leisure time, this age group tends to travel more
often. Travel that offers opportunities for personal growth
is also attractive to this group.
Develop Group Tour Packages
Communities should aggressively market themselves to the
escorted group traveler, or tour group. A recent study
indicated that while about 10.3 million American adults
participated in group tours in 1989, more than 15 million
plan to take an escorted tour within the next 2 years. This
represents 11 percent of the entire adult traveling public.
Current tour group participants tend to be females of more
than 60 years of age, retired or homemakers, with less than
$25,000 household incomes. However, examination of those
planning to join a tour group within the next 2 years
indicated that future tour group travelers were likely to
be younger, just as likely to be male as female, better
educated, and most likely to be in either the $25,000 to
~49,000 or $50,000 to $74,000 income ranges (National Tour
Foundation 1990). Since people in the 55 to 64 age group
will be looking for convenience and ease, special group
tours designed to provide these qualities and social
companionship should be attractive.
Care must be taken to remember that these are broad based
generalizations. While they may be valid for the entire
population, each community should carefully examine its
particular strengths and weaknesses to determine which
generalizations apply locally.
The Retirement Industry
Economic development has occurred mostly in urban areas as
a result of manufacturing growth. Rural areas and smaller
communities have difficulty competing for the relocation of
manufacturing plants and have typically depended on
agriculture for economic development. Such communities are
discovering that they have the infrastructure to support
tourism and another newly developing industry-the
"retirement industry."
Older migrants in the United States are relocating to areas
with amenities to provide them with a comfortable life
style for their retirement. They have steady incomes that
are not vulnerable to normal down cycles in the national
economy. Their income is used mostly for discretionary
spending, which usually occurs locally and leads to
economic development and job creation in the community of
relocation.
Persons of age 50 and above in the United States have:
- 77 percent of the nation's personal financial assets.
- 80 percent of the money in savings accounts.
- 68 percent of all money market accounts.
- Nearly 50 percent of all corporate stocks.
Persons of age 50 and above in the United States:
- Earn 42 percent of total after-tax income.
- Buy 48 percent of all domestic new cars.
- Own their houses in 80 percent of the cases, and 80
percent of those are mortgage free.
- Have accounts with brokerage firms in 27 percent of the
cases.
Major assets of the mature market include:
- Financial assets that are 80 percent larger than average.
- Savings accounts that are 90 percent larger than average.
- Checking accounts that are 50 percent more than average.
- U.S. savings bonds that are 50 percent more than average.
- Other securities that are 50 percent more than average.
- Houses worth 20 percent more than the U.S. average.
The large sums of financial assets involved in the
interstate redistribution of income because of elderly
migration is directly influencing state economies (Longino
and Crown 1989). Older migrants have generated a "new"
industry with the major growth segments being real estate,
finance, recreation, health care, insurance, and retail.
A 1986 study by the Federal Reserve Bank of Kansas City
found that rural counties where incomes are based on
retirees have out-paced all others in per capita income
growth. Also, counties designated as retirement sites
witnessed the largest increase in personal income and
employment among all non-metropolitan counties (Haas and
Serow 1990).
The "retirement industry" boosts the local economy and
increases the tax base. Large investments in infrastructure
or tax abatements are not required by government. Retirees
do not pollute or destroy the environment. They increase
the number of volunteers and contributors benefitting many
organizations. Obviously then, retirement is a good
industry to recruit for economic development.
As a result of understanding the net benefits of the
retirement industry, more towns, counties, and states are
beginning to recruit retirees. Some governmental units are
getting involved with project financing and efforts to
develop retirement housing that will attract retirees and
create jobs. Examples are common in housing and community
development in Florida, Arizona, and Arkansas.
Retirement income can lead to job growth in the same way
that industrial payrolls generate jobs. Retirees spend
their income in the local economy, creating a demand for
goods and services. When the demand: supply ratio becomes
more favorable for investment and employment, capital and
labor follow, stimulating economic growth. Retirement
income benefits local economies by increasing the demand
for local goods and services, creating a source of
investment funds, and generating a deposit base for
financing community development projects.
Local communities are benefitting from the wave of incoming
retiree dollars. That trend is expected to continue and
will transform the economic structure of many more
communities in the future. Non-durable goods and services
will be major aspects of these local economies with food,
travel, recreation, entertainment, and health care
dominating.
The number of older migrants will continue to increase and
they will have multiple income sources, better education,
better health, earlier retirements, and longer lives. They
will continue to be a favorable source for economic
development.
Success Stories
GUNTERSVILLE, ALABAMA
In 1989 a mail questionnaire was sent to 185 in-migrants in
Guntersville, a small community in the Mountain Lakes
Region of Alabama. This community has a large river
reservoir along with many other attractive amenities for
retirees. The results showed that retirees had a major
economic impact in the community. For example:
- 94 percent purchased a house.
- 21 percent took out mortgages.
- 85 percent bought a single family house.
- 7 percent moved into mobile manufactured houses.
- 30 percent valued houses at more than $60,000.
- 43 percent had annual income greater than $30,000.
- 25 percent had annual income between $20,000 to $20,999.
- 30 percent valued their net worth at more than $300,000.
- 17 percent had a net worth between $200,000 and $299,999.
- 80 households had savings accounts.
- 65 households had CD accounts.
- 55 households had real estate investments.
- 55 households had mutual fund accounts.
- 34 households had bond accounts.
DOTHAN, ALABAMA
A unique survey to in-migrant retiree households from the
Panama Canal Zone to the southeastern Alabama town of
Dothan was completed in 1991. The purpose of this survey
was to determine-nine the economic impact of this group on
the local community. The respondents were members of the
Panama Canal Society composed of 84 retiree households in
Dothan. Selected results are shown below:
Annual household income:
- 15 percent had incomes of $10,000 to $19,999.
- 23 percent had incomes of $20,000 to $29,999.
- 62 percent had incomes of more than $30,000.
Financial net worth:
- 26 percent valued their net worth at $50,000 to $100,000
- 30 percent valued their net worth at $100,000 to $200,000
- 7 percent valued their net worth at $200,000 to $300,000.
- 2 percent valued their net worth at $300,000 to $60,000.
- 51 percent valued homes at $60,000 to $90,000.
- 17 percent valued homes at $90,000 to $120,000.
- 6 percent valued homes at more than $120,000.
Types of investments (multiple responses):
- 43 households had savings accounts.
- 38 households had CD accounts.
- 19 households had bond accounts.
- 14 households had real estate investments.
- 8 households had stock accounts.
- 8 households had mutual funds.
These primary data demonstrate that in-migrant retirees
have a positive impact on economic development at the
community level.
WESTERN NORTH CAROLINA
The Appalachian Regional Commission funded a 1990 study of
retirees moving into Western North Carolina. Some results
are summarized below:
Annual household income:
- 22.3 percent had incomes of less than $20,000.
- 25.3 percent had incomes of $20,000 to $30,000.
- 22.7 percent had incomes Of ;30,000 to $40,000.
- 29.7 percent had incomes of more than $40,000.
Other impacts:
- 78.9 percent located to non-MSA counties.
- Average household deposits are $44,868.
- Average investments of $198,092 were reported by 485
households.
- Expenditures each week averaged $332 per household.
- Mean value of houses purchased was $108,884.
- 630 households reported spending $22.6 million with a
multiplier effect totaling $45.1 million.
- 943 jobs were created with average annual salaries of
$14,900.
- Tax revenues by local governments amounted to $384,300 in
property tax and $331.800 in sales tax.
- State government received $708,120 in income tax;
$189,000 in intangible tax; and $497,070 in sales tax.
- 76.7 percent are volunteering an average of 7.4 hours a
week.
- 54.7 percent are in positions of leadership in community
organizations.
- 41 percent had an opportunity to vote on a school bond
issue and 82 percent voted in favor of it.
From the perspective of direct public sector receipts and
expenditures, the retirees demonstrated that they paid
their own way; through the indirect economic effects of
retirees' consumption expenditures, retirees represent an
addition to the fiscal status of local governments.
Most retirees come into the community and immediately
purchase a house. They then invest significant liquid
assets in the host community financial institutions. Net
gains from home sales and purchases are a major portion of
the asset transfer. For example, a typical house sale
scenario may be as follows.
In-migrating retirees house exchange:
- $175,000-Sales price of house in old community.
- $160,000-Cleared after commissions and fees.
- $80,000-Price of house in new community.
- $80,000-To be invested at approximately 10 percent yield.
- $8,000-Increased annual income from investment.
- $3,000-Saved annually on real estate taxes and housing
costs.
- $11,000-Net annual increased income from house exchange.
These retirees do 90 percent of their spending locally for
consumer goods and services. They spend money on cultural
and recreational experiences, which stimulates job growth
and economic development in the new community. Some
estimates show that 3.7 factory jobs are required to equal
the same economic impact on a community as one new retiree
household.
In-Migrant Retirees And Economic Development
Responding to the economic opportunity that the elderly
represent, economic development agencies in non-
metropolitan areas are mounting efforts to attract elderly
migrants. This is leading to sharpened competition among
destinations for elderly migrants. Consequently, newly
designated retirement counties will be found throughout the
Southeastern United States (Graff and Wiseman 1990).
Benefits Of Attracting Retirees
- Increased tax base (retail and property).
- Increased number of positive tax payers, because as a
group retirees use fewer services than they pay for in
taxes.
- Increased bank deposit base, which can be used for
commercial and industrial financing.
- Increased retail sales.
- Increased economic "multiplier" effect.
- Increased local expertise in a variety of areas.
- Increased number of volunteers.
- Increased church contributions.
- Increased employment.
Other positive aspects make attracting retirees a sound
economic development strategy for a community to pursue.
Attracting Retirees Will Not:
- Strain social services.
- Strain health care services.
- Strain school systems.
- Strain criminal justice system.
- Create major environmental problems.
The primary industries in the community of relocation that
benefit from the retiree in-migrants are the:
- Real estate industry.
- Financial industry.
- Insurance industry.
- Utility companies.
The types of housing that are in demand by these older
migrants are:
- Existing detached houses.
- New single family dwellings.
- Condominiums.
- Mobile manufactured houses.
- Condominiums with amenities.
- Apartments and duplexes.
- Dwellings in retirement villages.
Retiree Destinations
Migrating retirees are classified into three types:
amenity, return, and dependency. Amenity migrants are
looking for amenities such as lakes, beaches, mountains,
and temperate climates. Return migrants have earned their
retirement pensions and are looking to move back to their
home states to enjoy relatives, nostalgia, and a lower
cost-of-living. Dependency migrants move because they are
getting more disabled and they move to be closer to someone
who can help care for them. Amenity and return migrants
seem to be looking for a combination of the following:
- Good medical care.
- Quality housing at reasonable prices.
- Safe, quiet neighborhoods.
- Low cost-of-living.
- Recreational attractions.
- Cultural attractions.
- Convenient shopping.
Retiree Living Preferences As Chosen Before Retirement
A 1988 Idaho survey showed that those who intend to retire
would choose the following counties (junk 1989):
- 33 percent preferred a county with a city of 10,000 to
49,000 people.
- 33 percent preferred a county with a city of 50,000 to
149,000 people.
- A county with a city of 500,000 or more was least
preferred.
Retirement Counties
Graff and Wiseman (1989) concluded the following about
retirement counties:
Retirement county preferences as chosen before retirement:
- Are typically non-metropolitan.
- Have smaller populations.
- Are located near a metropolitan center.
- Have low population density,
Demographic composition of a community also enters into the
decision as to which community to select for retirement.
The Idaho study showed:
- 89.4 percent preferred a community with people of all
ages
- 9.9 percent preferred a community of mostly older people
along with people of all ages.
- 0.6 percent preferred to live in a community of only
older people.
Simply put, to attract retirees, first attract them to
visit the community and show them what it has to offer.
Since people visit an area about three times before they
decide to retire at that location, the more time spent in
an area, the greater the chances of that area being chosen
for retirement.
So You Want To Attract The Migratory Retiree?
Tourism and attracting retirees go hand in hand as methods
of economic development available to local communities.
Even if a community is unsuccessful in enticing a
particular tourist to retire in the community, an economic
benefit has been gained from his or her visit. No
individual or family is likely to retire in a community
without first visiting it. There is a close relation
between the two that should be recognized and utilized by
tourism and retiree attraction groups and committees at all
levels of government.
Marketing and advertising a community as a retirement
location is a developing concept. Most of these efforts
build on efforts to market the community to tourists. The
community needs leaders to organize and assess their
community's strengths and weaknesses so their target-market
can be identified. The retirement life styles that the
community can provide needs to be determined to find
retirees who can find fulfillment in retirement in that
community. Marketing and advertising to potential retirees
includes techniques of communicating the community's
message to mature adults. This involves the development of
promotional literature to encourage people to visit for a
closer look. The organizing of a retiree attraction
committee and the specific techniques for marketing
communities as retirement destinations is beyond the scope
of this publication but is available in other publications
(Fagan 1988).
The continuing flow of tourists and retirees into a
community has, the same effect on its economy as an
industry that produces mainly for out-of-state buyers.
Local communities benefit from the wave of incoming dollars
brought by tourists and retirees. That trend is expected to
continue and will transform the economic structure of many
more communities in the future. Non-durable goods and
services will be major aspects of these local economies
with food, travel, recreation, entertainment, and medical
care dominating.
Tourists and retirees boost the local economy and increase
the tax base. They do not require large investments in the
infrastructure or tax abatements by government. They do not
pollute or destroy the environment.
Projected incomes of householders aged 55 and older will
continue growing faster than average in the decade ahead.
"Households in this age group with incomes of $50,000 or
more should increase by fully 70 percent, from 3.5 million
in 1986 to 5.9 million in 2000" (Exter 1987).
According to the Congressional Budget office, higher
personal incomes have recently placed a separate residence
within reach of most people 65 and over. Independent living
is likely to become increasingly prevalent over the next 50
years because the elderly are expected to attain higher
incomes and face fewer financial constraints. Projections
are for a significant growth in the number of elderly
people living only with their spouses by 2030.
The number of older migrants will continue to increase and
they will have multiple income sources, better education,
better health, earlier retirements, and longer lives than
the generation currently retiring. They will continue to be
a favorable source for economic development.
Despite all the positive aspects of attracting retirees,
there is some concern that once these citizens are
relocated, the new location will experience an increased
demand for medical and social services for which the state
government will be responsible. According to many studies,
this has not been a big problem for the states attracting
return and amenity migrants. These people are more healthy
and affluent than those who do not migrate. Also, when they
become more dependent they usually move to the state where
their closest relatives reside in order to receive needed
assistance (Crown 1988).
Communities with successful programs to attract and
relocate retirees will benefit economically in the form of
jobs, increased tax bases, and increased deposit levels
from the financial activity of these retirees. Local
financial institutions will have more funds available for
development purposes. Communities involved in the
"retirement industry" will do well to plan for growth that
will occur and to insure that retirees continue coming to
replace others who leave in order to keep all of the
segments of the industry functioning. Attracting tourists
and retirees are viable economic development options. They
are activities for which many rural areas have the
necessary infrastructure and activity that "best fit" the
existing economic situation in those rural areas.
Attracting retirees is no economic panacea, although it
does allow for economic diversification and stabilization.
It is a low risk strategy with a good return on investment.
Even if not one retiree household relocates to a community,
there will be increased tourism, increased curiosity, and
image enhancement. Like any other economic development
strategy, it takes time to develop and reap the benefits.
References
Blank, Uel. 1989. The Community Tourism Industry
Imperative. State College, Pennsylvania: Venture.
Cook, Suzanne D. 1989. Discover America 2000. Washington,
D.C.: Travel Industry Association of America.
Crown, William. 1988. State Economic Implications of
Elderly Migration; The Gerontologist 28 (4).
Drucker, Peter F. 1980. Managing In Turbulent Times. New
York: Harper and Row.
Economic Impact of Expenditures by Tourists on Alabama.
1990. York, Maine: Davidson-Peterson Associates.
Exter, Thomas. 1987. Incomes of the Mature Market American
Demographics 9 (Dec.): 62.
Fagan, Mark. 1988. Attracting Retirees for Economic
Development. Jacksonville, Alabama: Jacksonville State
University Center for Economic Development.
Glasgow, Nina. 1990. "Non-metropolitan Retirement
Migration: Economic and Political Considerations," Journal
of Applied Gerontology 9 (Dec.).
Graff, Thomas, and Robert Wisemen. 1990. "Changing Patterns
of Retirement Counties." Tale Geographical Review 80(3).
Green, Bernal, and Mary Jo Schneider. 1989. "Manufacturing
or Retirement: A Comparison of the Direct Economic Effects
of Two Growth Options." Unpublished, University of
Arkansas.
Haas, William, and William Serow. 1990. The Influence of
Retirement In-Migration on Local Economic Development.
Final report to the Appalachian Regional Commission, Sept.
29.
Hoffman, Carl. 1990. "Retirees Just Love Hendersonville,
and the Feeling is Mutual," Appalachian 23(3, Summer): 19-
25.
Junk, Virginia. 1989. "Thinking Ahead to Retirement"
Unpublished, University of Idaho.
Longino, Charles, and William Crown. 1989. "The Migration
of Old Money," American Demographics 11 (Oct.): 28-31.
Naisbit, John. 1982. Megatrends. New York: Warner Books.
The National Tour Foundation Group Travel Report. 1990.
Lexington, Kentucky: Longwoods International.
Pulver, Glen. 1991. "Exploiting All Options in Community
Economic Development." Unpublished, Auburn University.
Shaffer, Ron. 1981. "The Silver-haired Economic Base,"
Community Economics, No. 52 (January), Department of
Agricultural Economics, University of Wisconsin-Madison.
U.S. Congress, Budget Office. 1988. Changes in the Living
Arrangements of the Elderly; 1960-2030. Washington, D.C.
U.S. Travel Data Center. 1989. 1990 Outlook for Travel and
Tourism, Washington, D.C.
U.S. Travel Data Center, 1990a. 1989 Domestic Travel; A
Historical Perspective. Washington, D.C.
U.S. Travel Data Center. 1990b. The 1989 Economic Review of
Travel in America. Washington, D.C.
This publication was prepared by J. Thomas Chesnutt,
Extension Tourism Specialist; V. Wilson Lee, Extension
Economist; and Mark Fagan, Associate Professor,
Jacksonville State University Center for Economic
Development.
Issued in furtherance of Cooperative Extension work in
agriculture and home economics, Acts of May 8 and June 30,
1914, in cooperation with the U.S. Department of
Agriculture. The Alabama Cooperative Extension Service,
Auburn University, Ann E. Thompson, Director, offers
educational programs and materials to all people without
regard to race, color, national origin, sex, age, or
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This information is for educational purposes only. References
to commercial products or trade names does not imply
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mentioned. This information becomes public property upon
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