April 23, 2019
By Amita Sharma
April 23, 2019
[This is an excerpt of the California Dream collaboration’s Graying California. Explore the full series here.]
“This is our dreamland,” Gerda said. “It’s as though this place was waiting for us all our lives.”
But fate didn’t finance the couple’s bucolic paradise. California’s gilded real estate market did. The couple bought their new home for $610,000 after selling their Pasadena townhouse last fall for $500,000.
Gerda purchased the townhome for $99,000 in 1985 as a single mom who worked as an educator. Back then, many Californians, including baby boomers, seized the chance to buy houses.
A typical home in California cost around three times the average young family’s income in the late 1960s, based on figures from the Public Policy Institute of California and the California Association of Realtors. Today, that home costs seven times what an average young family makes. That phenomenon is reflected in homeownership numbers.
Around 60% of California seniors own their homes, according to the California Budget & Policy Center’s analysis of U.S. Census, American Community Survey data for 2017.
“Most of those seniors have paid them off,” said Steven P. Wallace, associate director of the UCLA Center for Health Policy Research and the principal investigator with the Elder Index, a tool used by policymakers to figure out how much income California seniors require to meet basic needs.
We have surely benefitted from the fact that we’re older and came of age at a certain time.~ Gerda Govine Ituarte, Poet and retiree
Home equity aside, the state’s seniors had careers at a time when the cost of living was reasonable enough to allow them to sock away money for retirement. Company pensions were also more common. About 39.3% of California seniors have retirement income in addition to Social Security, according to the California Budget & Policy Center.
“The idea was that retirement would be a three-legged stool,” Bruvold said. “It would be pensions, savings and Social Security.”
Luis gets a pension from his job in the cultural affairs department at the city of Los Angeles. Gerda is a retired educator and diversity consultant. In addition to Luis’s pension, the couple live off of retirement savings and their combined Social Security income.
“It’s our survival,” Gerda said.
But what about today’s middle-class families? Can they do what Gerda and Luis did — buy a home and sell it three decades later to finance an idyllic retirement?
“It’s just not likely that they’re going to retire with a comfortable, economically secure retirement,” Prindiville said. “They will have Social Security. But a lot of people haven’t been able to establish another source of retirement savings.”
Just 22% of Californians had defined benefit pension plans last year, according to the Bureau of Labor Statistics.
The Ituartes realize they’re fortunate that they can count on multiple sources of income in their retirement.
“We have surely benefitted from the fact that we’re older and came of age at a certain time,” Gerda said.
Gerda is a poet. She has published four books of her poetry and is working on a fifth. Luis is a sculptor and painter.
The couple plan to use their newly purchased property in eastern San Diego County to inspire other artists. Luis wants to hold art camps in the summer.
“This could be an open space gallery, a place where people can come and see artists working and see displays of artwork in nature,” Luis said.
Gerda envisions weekend retreats for women.
“I’m talking seasoned women,” Gerda said. “Women 60-plus, who are writers or poets, but they’re shying away from it. I want them to come out and experience the freedom, the air to tap what’s already there.”
As they looked out on their sprawling property on a recent overcast day, the couple was joyful about their future.
“We’re gonna take a chance,” Gerda said. “We’re gonna go into this wide open space and see what happens.”