Located off Interstate 75 near Ocala, the Villages of Florida is an archetype for one of the hottest trends in retirement: the active adult community. Some 45,000 people call the Villages home, but only people 55 and older can live there. They are lured by the sales pitch of a "hometown" lifestyle in the sun that involves driving golf carts to various leisure activities, including golf, tennis, and dancing.

In many ways, the booming Villages community--whose growth belies its humble origins in 1983 as a small mobile home park--parallels Florida's swift transformation in recent decades from a land of orange groves and sleepy towns into an economic powerhouse in the sand. As the state's population swells, Florida has enjoyed rapid growth and an influx of wealth as it grapples with the problems that accompany such changes: overcrowding in some areas, compromised environmental quality, and rising health care costs.

Florida's fast growth

Florida's population increased by more than 3 million during the 1990s to nearly 16 million, an increase of 23.5 percent, according to 2000 U.S. Census data analyzed by the Federal Reserve Bank of Atlanta. During the same period, the U.S. population grew by 13.2 percent.

Moreover, because of Florida's famously agreeable climate, the character of growth in the state has been unlike growth anywhere else in the nation. The state has a moderate rate of natural population growth by birth, and the percentage of residents who were born there is low: 32.74 percent, a statistic that contrasts sharply with the 60 percent of the national population who reside in the states in which they were born. Florida's population growth is notable for its massive rate of in-migration and the relatively high average age of the population. In 2000, more than 22 percent of Florida's population was 60 or older, compared with 16.3 percent for the United States as a whole. This figure has held steady in Florida, where 23.6 percent of residents were 60 or older in the 1990 Census. Moreover, the state is becoming grayer as people live longer: Florida's population over age 80 increased from almost 4 percent in 1990 to more than 4.6 percent in 2000, whereas 2.8 percent of Americans are over 80.

Migration into Florida is expected to gain momentum as the baby boomer generation, born between 1946 and 1964, moves into the active adult demographic range. By 2015, 77 million Americans will be 50-69 years old, and about 45 million of this group are likely to relocate, according to Del Webb, a division of Pulte Homes that specializes in developing active adult communities.

"Because the peak of the baby boomers just turned 50, you're going to have another 10 or 15 years with huge numbers of young elderly moving into Florida," said Stanley K. Smith, director of the Bureau of Economic and Business Research at the University of Florida in Gainesville.

Because jobs have been available in Florida at a time of weak employment in many other parts of the country, the state has also become a destination for young families, many of whom end up providing services to retirees in one way or another. (The influx is apparent in the Florida population in the 30-49 age range, a group that increased by nearly 30 percent from 1990 to 2000.) As a result, in many parts of Florida, residents barely noticed the 2001 recession because of strong demand for services, especially in health care, education, and tourism.

Catering to the boomers

There is a strong business case to build communities for the glut of aging Americans who consider themselves young at heart. Fresh from their peak income years, many are financially secure. They rarely have children who are still in school, and they require fewer health care services than people over 70.

But too often developers overlook the harsh reality that baby boomers won't be active forever. As baby boomers age, the fun-loving communities now under construction may have to accommodate both nursing care and fitness centers.

"Thirty years down the road, people's retirement needs will change," said Andrew Kochera, a senior policy adviser for the American Association of Retired Persons Public Policy Institute. "My question is, will the communities be able to change in temps of what they're offering?"

Perhaps no other state has an economy that depends on retiree influx as much as Florida. A vast service-based economy has developed to support these affluent new residents who demand housing, retail, recreation amenities, health care, roads, and other government services. "Retiree migration is a growth industry, and it's an impetus to other types of growth," Smith said.

Because retirees often have relatively steady incomes from pensions, social security, and interest on savings, Florida banks reap the benefits of a rock-solid depositor base. In contrast to younger customers who normally have a lot of money and debt tied up in their homes, typical retirees move to Florida after years of saving and bring along plenty of liquid assets--on average, $1,000 cash for every year of employment.