Oakmont’s Coming Retirement Income Crisis: What You Need to Know
By Timothy Nelson *
Hello Oakmont folks! OVA Board Candidate Timothy Nelson here. Let’s talk about something super important – our retirement income. According to the latest American Community Survey, Oakmont is a middle-class neighborhood with a median income of $93,262 per resident. But here is the kicker: 40% of our homeowners have incomes below $75,000, and a lot of them are single, divorced, or widowed.
For married folks, average incomes have been rising sharply: $101,042 in 2020, $115,583 in 2021, $126,481 in 2022, and $135,000 in 2023. But for those living alone, average income has been stagnant: only rising from $60,568 in 2020 to $64,399 in 2023. With inflation up 14.4% from 2020 to 2023, single folks’ purchasing power has taken a big hit.
Many women in Oakmont, especially those living alone, are facing a tough time. Men earn about 33% more in retirement income than women. So, while men living alone have about $84K of income on average, women living alone have incomes of about $56K. That is only $4,666 each month. Their every dollar counts.
Is Oakmont Ground Zero for Female Retirement Insecurity?
It sure looks like it. Sixty percent of Oakmont homeowners are women and almost 700 Oakmont women live alone.
But married women are not in the clear either. Many end their life in single households because they outlive their husband. And the death of a spouse can be accompanied by a decline in economic status. Some Social Security benefits or traditional pension benefits may stop upon the death of a spouse. Women also tend to live six years longer than men, adding to the financial strain.
A study by Morningstar found that 55% of single female households risk running out of money in retirement, compared to 41% for couples and 40% for single men. Women’s retirement savings are on average about 40% smaller than men’s, thanks to income inequality and career interruptions for caregiving.
What Happens When a Retiree Runs Out of Money?
Running low on retirement savings means making lifestyle adjustments to stretch your funds. You tighten your belt, rent out a room or even go back to work if you are still able.
But running out of money means your liquid assets are gone. Vamoosed. Kaput. Zero. Zilch. Most retirees will still get Social Security when they go broke, but that’s not likely to be enough. Many seniors spend over 30% of their income on housing. And long-term care costs can make things even tougher.
You Cannot Eat a House
Although I do not know how much equity an average Oakmonter has in his or her home, it is safe to say most Oakmont retirees have significant home equity. The national median home equity of homeowning seniors is about $250,000.
Without enough income, retirees can become “house poor.” Most adults aged fifty-five and older want to stay in their homes as long as possible. Reverse mortgages might help some “house poor” homeowners, but they are not a perfect solution. A 75-year-old tapping $500k of home equity can elect to receive 1) a lump-sum of about $90,000 or 2) a monthly check of about $750 for life. Combined with the average national Social Security check of $1,800, that is just $2,550 a month – not much to live on.
In Summary
This report highlights the retirement income insecurity faced by many Oakmont residents. It reveals that while most married couples are financially comfortable, a sizable portion of our homeowners, especially single, divorced, or widowed individuals, have modest incomes and financial resources. There is also considerable disparity in retirement income between men and women, with women living alone receiving significantly less income, and possessing fewer assets.
Given this financial reality, it is crucial that the OVA Board consider limitations on the broader community’s ability to contribute to major expenditures, such as the proposed Berger/CAC facility expansion.
* Editor’s Note: A technical difficulty is currently preventing us from inserting Tim’s name in the correct location for the byline of this article. Once the difficulty is resolved, we will correct the error, but we did not want to delay publication so are publishing it under the Oakmont Observer byline.
Pay up or move ~ Get a reverse mortgage? What will happen if the Trump/Musk/Project 2025 team gets their projected way and interferes with Soocial Security and Medicare? Oakmont will not only become unaffordable to many present residents, reduced benefits will diminish the market because a much reduced group of seniors will be able to even consider moving here. What will happen to real estate values then? Of course the age restriction can be eliminated, like the new tract by the entrance. There3 are so many unanswered questions about the future in this country, it would be prudent to put extravagant development on hold until the future has jelled to some extent or another…
Thank you Tim for speaking clearly about this reality and p.s. you have my vote.
Oakmont offers attractive retirement living to a wide range of incomes. I wondered about potential spending conflicts on my first tour. It’s not surprising that one-size dues, in effect a flat tax, does not satisfy everyone.
But, it seemed to work. One reason is why most people chose to live in Oakmont. It wasn’t because of facilities or recreational amenities. It was a combination of location, natural beauty and the variety of activities offered by our many clubs, from social to service to educational.
Are those days over? That some portion of members believe we need to modernize, enlarge and upgrade is clear. Many are leaders in the OVA and volunteer countless hours on our behalf. I extend my appreciation. My trouble is the reluctance of some to seek or possibly accept a decision of a majority of members.
I thought the last election was decisive it its clarity. Apparently not. Two in a row is a must. Thank you.
Tim definitely makes the case for why we need to keep the dues down. When we moved to Oakmont we all knew what facilities it offered, and if we thought they weren’t enough we could have moved elsewhere. We didn’t move here thinking that everything would be greatly improved and that the dues would therefore vastly increase. Timothy makes the case for why so many of our members could not afford vastly higher dues. He has all of the facts and also shows obvious empathy and has my vote in the upcoming OVA Board election.
I agree – In these times of uncertainty extravagant and costly projects should be put on hold.
Tim, a great start on a tough subject. Unfortunately, the data you relied on is not accurate. The census subcommittee of the LRPC went to a great deal of toil and trouble to burrow down to the block level in order to eliminate the non-Oakmont parts of the two census tracts that cover parts of Oakmont. The method used matched pretty exactly the process Deborah Quam has described as the best way to get the most accurate numbers possible for Oakmont out of the census, including the American Communities data. The findings are interesting, to say the least: 64% of owners in Oakmont are above $100,000 in annual income. 87% are above $75,000. The subcommittee concluded that Oakmont is an upper middle class community, with almost no poverty among owners. Only three percent have yearly incomes between $35,000 and $50,000 (with .002% below that) and 10% have incomes above that but less than $75,000. Yes, a very large percent of our residents are female: 67 percent. The number of females living alone is blurred by the fact that the census, while inquiring about GLBT status, still counted two females residing in one home as two single households. In fact, Oakmont has a substantial number of gay women who are married or coupled. The median age in Oakmont is 76. While I agree that there will be a disproportionately higher percentage of women living solo in the lower income categories, there does not appear from these more accurate numbers a mass of elderly Oakmont women living in poverty and unable to pay their bills. The uncertain and rising costs of insurance, the inflation likely to result from tariffs on imported goods, continuing food cost increases exacerbated by the deportation of migrants working in the fields, meat packing, and other agricultural industries – these are costs we all face now and that way overwhelm HOA needs to address deferred maintenance and the original developer’s tactics to pass costs on to the owners then and up to today.