Retirees: A growing economic force in the West

This Monday the White House will hold its Conference on Aging.  While much of the gathering concentrates on the importance of healthcare and retirement security, older Americans also are having a significant economic impact on communities across the U.S. West.

The baby boom generation is retiring in droves (up to 10,000 each day), and many of these newly minted retirees are on the move. These movers bring with them their retirement nest eggs and Social Security payments, which can boost local economies.

{mosads}But where are they moving to, and which communities are getting this economic boost? The reasons for moving to a community are as varied as the retirees, and include housing costs, climate, and family. But when we look across the West, some patterns emerge.

Research by Headwaters Economics conducted last year on migration not surprisingly found that retirement destinations are characterized by large and growing older populations, but also are seeing growth across all age groups. In fact, all of the top retirement destinations in the West are experiencing high net in-migration across all ages.

Studies also show that the presence of nearby protected public lands affects a community’s retirement destination appeal. Research by the Economic Research Service (part of USDA) indicates that boomers are moving to places with protected federal lands (such as Wilderness or National Parks).

Looking at all older citizens as a group (those 55 or older), we found that these Americans had twice the average net migration rate, 11 percent compared to 6 percent, in western counties with more federal protected lands compared to those with less protected lands for the years 1970 to 2010.

This finding holds when we look separately at pre-retirees (those aged 55-64) and retirees (those aged 65-74). The difference in migration is greatest for pre-retirees, who are likely to be active and enjoy outdoor recreation on these lands. The difference in net migration is smaller for older retirees, but is still significantly higher in counties with high-protected public lands.

Equally important, these patterns of older Americans migrating in higher numbers to counties with protected lands held for each decade within the forty year study period.

We also find these results at the state level.  In Montana, where I live, the average net migration rate for all seniors for 1970-2010 was 6 percent for counties with more federal protected lands compared to -1 percent for counties with less protected lands.

As a result, the protected federal lands in a county not only preserve unique landscapes and natural resources, but have the potential to attract in-migrants such as baby boomers, who in turn help support a more robust local economy.

Previous research by Headwaters Economics has shown that protected public lands help to create a competitive economic advantage, contributing to growth in employment, population, and personal income.

Across rural America, many communities are struggling to sustain their economies and residents. While protected federal lands are not a panacea, their ability to attract in-migrants can be an economic bright spot in rural places.

Older Americans are an important part of this economic picture.  Migrating retirees provide a unique economic stimulus, bringing along with them an influx of retirement and investment income. Their outside income can then boost other parts of the economy, including the health care and retail sectors.

As more and more Americans retire, many are considering moving, but some communities are seeing a larger influx of baby boomers than others. Research shows that the proximity to protected public lands is a factor in retirees’ decisions of where to move and which communities will benefit from these new residents.

Lawson is an economist at Headwaters Economics, an independent research firm based in Bozeman, Montana that works to improve community development decisions in the West.