Real Estate Central

IRVINE, Calif., Sept. 17 /PRNewswire/ — The commune of the 1960s may
be making an unwanted comeback thanks to the bursting of the housing
bubble, says California investment expert and author Thomas C. Scott. In a
possible sign of things to come, Scott says he’s noticed that a growing
number of people facing foreclosure or bankruptcy are doubling up in the
middle-class version of crash pads. And he expects the trend to grow as
more and more baby boomers face under-funded retirements.

Scott, CEO of Scott Wealth Management and author of the forthcoming
“Fasten Your Financial Seatbelt,” says that at the epicenter of the housing
collapse, Orange County, “I’m hearing a pattern of stories about people
caught short with maxed-out mortgages, big houses that won’t sell, and
eroding incomes who are throwing in the towel and sharing homes with
others.”

In one case, Scott says a family moved in with friends so they could
rent out their own home in an effort to save it. “A retired neighbor of
mine recently took in her son, daughter-in-law, and grandkids because they
couldn’t afford their own home anymore.”

Scott says this may prove to be a major demographic shift as baby
boomers swell the retirement rolls.

“Baby boomers as a group have failed to adequately save for retirement.
Although every study suggests people expect to work past age 65, they won’t
be earning what they did during their peak years. Millions will reach
retirement age with Social Security, Medicare, and whatever work they can
get.”

Boomers are getting squeezed from both ends, he says. “They loaded up
on mortgage debt during the good times, and calculated their retirement
assets based on inflated home prices. Now all that paper wealth is gone,
they’re stuck with white elephants, and the end of their peak earning years
is in sight.”

Scott says the housing bust could be lengthy, and painful. “The
collapse of the 1980s took seven years to work itself out. In the next
seven years, some 30 million boomers will reach retirement, many
unprepared.”

Thomas C. Scott (CFP(R), CFS) is a Registered Principal with LPL
Financial; CEO of Scott Wealth Management, Irvine California; and author of
“Fasten Your Financial Seatbelt: What an airline crash taught me about
retirement planning” (2009)

Contact: Tom Scott (949) 266-6348 tscott@scottwealth.com

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[Via Real Estate Newswire]