(MONEY Magazine) – Driving west into the desert from Phoenix on U.S. 60, the history of retirement in America passes before your eyes, shimmering in the 93[degrees]F heat. First comes Sun City (pop. 46,000), the prototype for the modern retirement community. It was built by the Del Webb Corp. in the 1960s and 1970s, when senior citizens pursued economy-size dreams and air conditioning was a luxury. By the 1980s, those dreams needed an upgrade, which is why Del Webb built Sun City West a few miles down the road. Passing it today on the highway, you can see the difference. Bigger houses. Ambitious landscaping. Huge swimming pools and gymnasiums. Expansive cultural centers.

Ten minutes farther along, rows of towering date palms break the horizon. If you're a baby boomer, this next place is the one for you. Until a few years ago, the land here was citrus farms and cotton fields. Now man-made waterfalls cascade along red rocks, and golfers clutter grassy fairways that border neighborhoods of dun and pink adobe homes. Quite fittingly, Del Webb calls its latest development--a high-concept, deluxe village that's still only about half-built--Sun City Grand.

Retirement communities are on the brink of an identity crisis. Last year marked the first that the boomer generation (Americans born between 1946 and 1964) was eligible to live in age-restricted 55-and-over settlements such as Sun City, Sun City West and Sun City Grand. A few boomers have already arrived, but in coming years, as the number of Americans in their sixties begins to soar, a stampede will commence.

If you're in your forties or fifties, this may seem like a distant concern. After all, you may not yet even know what you want for your retirement. But the people at Del Webb think they do. I can say this with some certainty because I recently spent several days living in Grand, the company's flagship development, talking to new arrivals, luxuriating in the desert air and pushing an electric golf cart to its performance limits. I was there to meet residents and Del Webb's planners. But I was also trying get a glimpse at the future of retirement in America--a future that, even as you read this article, is being researched, polled and test-marketed to shape adult communities of every conceivable size and style in locations all around the country.

Retirement living is becoming a lifestyle product not unlike a Viking stove, an Apple laptop or a Ford Explorer. So your future may depend on the future you choose to purchase. Keep in mind, however, that what you choose to purchase depends on one other thing: how much you can pay.

NO MORE EMINEM

In the time since Grand opened in October 1996, 1.5 million visitors have made their way to the towering date palms to take a look. One glimpse at the license plates in the parking lot tells you that prospective retirees think nothing of driving all the way from Maryland, Oregon or Wisconsin. For the most part, visitors spend a few days testing the exercise facilities and looking over model homes that run from $110,000 to $280,000 (though upgrades can easily add premiums of 50% or more). So far, Del Webb, the largest builder of retirement communities in the country, has sold about 6,000 homes at Sun City Grand out of a planned total of 9,600. According to Anne Mariucci, the company's president, the sales rate--around 1,100 homes a year--makes Grand one of the best-selling active-adult communities in the United States.

At a breakfast for visitors, several couples told me that they had come to resolve two questions. One is whether the desert lifestyle appeals to them. The other is whether they have the wherewithal to move here full or part time (about 70% of residents are year-rounders). According to Del Webb's surveys, there are a host of reasons why retirees decide to buy in--the busy community life, the social clubs, the golf courses, the exercise facilities, the company's reputation for reliable home construction and what executives call "the 40-year-old Sun City brand." As to why many retirees prefer a 55-and-over settlement, it generally comes down to a desire to live in a place free of youthful noise and hijinks. In other words, no more kick the can, no more car stereos blasting Eminem.

Whatever their reasons for buying, Grand residents seem thrilled to be here. Many of the people I met fit a kind of supra-boomer archetype: athletic, well educated, culturally engaged and gleefully involved in community work or a second career. Though some were in their sixties--not boomers per se--almost all personified the kind of active-adult lifestyle that Del Webb expects to be the hallmark of boomer retirees. Before coming here from California in 1997, for instance, Ken and Carol Pierick spent the first six years of their retirement living on a sailboat. When they decided to make a change, they did some homework and concluded that Grand would suit them well. Soon after arriving, they started a table tennis club, music club, photo club and computer club. Carol, 65, began doing food shopping for housebound locals. Ken, 66, started a Dixieland band and a digital photography business. "I am much more a doer than a watcher," he explains to me in his living room, as if that were somehow not apparent.

Randy and Carol Kraker, who moved here from Minnesota, also like to keep busy. Randy's mother lives in the original Sun City, and he and Carol had been visiting the area for years before they bought here. When I had dinner with them one evening at The Bistro restaurant, Grand's main watering hole, Carol expounded on the community's virtues: "I think if someone is going to retire, this is the place to do it--not Sun City Grand necessarily, but a retirement community." These days, when they're not trying to sell Arizona real estate (after highpressure careers in Minnesota, they work mostly as realtors with a local RE/Max agency), Carol goes skydiving, and both spend time with the drama club. He is 53 and she is 48 (Del Webb allows about 10% of new units to be sold to people between 45 and 55). As Carol puts it, "You have to come to a place like this to get on with your life."

Her words strike a familiar chord with me and, after a moment, I begin to understand why. It seems to echo the sales pitches on the bright red billboards I saw on Route 60 on the way from Phoenix: "Sun City Grand," the signs promised, "Where Dreams Live On." Or on another: "Sun City Grand, Where You Can Start Living."

KNOW THY CUSTOMER As it happens, this isn't a coincidence--and it certainly isn't mind control. The Krakers are just the kind of couple that Paul Bessler has dreamed about bringing here since the mid-1990s. Bessler is the head of research at Del Webb, and much of his time is spent figuring out how to make communities like Grand appeal to boomers. Part of Bessler's job is related to marketing, but much of it involves crafting a community's physical and lifestyle infrastructure based on surveys and polling research.

Del Webb's own research indicates that at least 38% of retiring boomers will move out of their current home. Some will be investors who profited from the roaring 1990s economy and want to pursue a vigorous lifestyle in the Sunbelt. Others will be Californians trading in on the high value of their homes for less costly real estate in Arizona. Still others will be like the Krakers: children of the first generation to move to large-scale retirement developments like Sun City. "There are two different theories on the boomers," says Del Webb's Bessler. "The first is that boomers won't want to come here because boomers are different and they always will be. The second is that people evolve and they become more like their parents. I lean toward the second."

Still, Bessler cautions that boomers are immensely diverse in their values and finances, regardless of what their Woodstock-generation reputation may suggest. That's why one type of community, even one as sophisticated as Grand, won't be able to please all the people who are willing to buy. That will take dozens. Right now, companies like Del Webb are working furiously to tailor an array of places--small and large, eastern and western, gated and open--to various boomer tastes and levels of wealth.

Clearly, with 76 million boomers in play, there's a lot at stake. That's why Del Webb does an exhaustive amount of research before workmen lift the first shovelful of dirt. Before building Grand, for instance, the company conducted lengthy surveys and focus groups of Sun City West residents about how that older community could be improved, as well as phone polls of a broader sample of boomers. When Bessler's surveys turned up enthusiasm for a "vacation" look, the idea of a "soft resort" like Grand was born.

But researching Grand was merely the start of a process that will continue for the next few decades. The company surveys every Grand home buyer--as well as visitors who declined to buy at Grand. When company research indicated that some boomers preferred a more intimate, gated community, Del Webb built Solera on the east side of the Phoenix metro area. When some boomers who responded to company polls said they were looking for an intergenerational mix and no age restrictions, Del Webb built a place called Anthem nearby. And so on.

Most significantly, Del Webb recently opened a Sun City in Huntley, Ill. to appeal to Chicago retirees who want to stay near family or friends. (The "aging in place" contingent makes up the vast majority of retirees. Only about 5% of Americans over 65 move across state lines.) To appeal to the stay-near-homers, the company is also developing smaller communities of 600 or 700 houses near major cities, like one currently under construction outside Washington, D.C. and another planned for a site in northern New Jersey.

Research has also affected the evolution of many Del Webb communities. For instance, when Grand residents indicated that continuing education and a "college feel" were much bigger priorities than planners had anticipated, the Chaparral Center, where residents attend club meetings and continuing ed classes, replaced a planned bowling alley. Changes like this--as well as variations from community to community--don't make for profound differences. But altering the aesthetics and aura can make or break a place. The vegetation and the date palms I saw when I turned off the highway came from Bessler's research--that's what prospective buyers wanted to see. "In all the communities, the ingredients are the same," he says, "but you have to vary the sugar and flour and the chocolate chips. More of some here, more of some there."

OLD AND NEW DREAMS

Of course, if Grand is any example, retirement communities also seem to capture a moment in time and the values of a particular generation. And communities can grow old just as people do--a point underscored by the state of the original Sun City. The average resident in Sun City Grand is 61; in Sun City West, 66; in Sun City, 76. Clearly, the buyers at Grand closely match the target demographic. But there are reasons to believe that there's a retirement future in Sun City too. For one thing, small houses there can sell for as little as $60,000, making it an option for less affluent retirees. For another, as retirement communities age, not just in Arizona but all over the country, the heirs are moving in.

Though still closely identified with the older communities here, Del Webb no longer owns either Sun City or Sun City West; upon the completion and sale of all the homes, Del Webb turns over the community, along with its golf courses and various amenities, to the residents and their homeowners association. This will likewise be the case with Sun City Grand when the final 3,000 homes are finished a few years from now. Yet that doesn't mean the community will be done: Del Webb has earmarked parcels of land within Grand for assisted-living facilities, nursing homes and the like, so they can be built later by private health-care corporations. At Grand, that will be years from now. But driving around Sun City in the kiln-dry heat of a desert afternoon, I passed by several assisted-living centers and nursing homes, even a cemetery.

I was on my way to visit Barbara and Allen Townsend, who are second-generation Sun Citians. Barbara's parents moved to their house in 1972. Then when Barbara's mother and father passed away 11 years ago, she moved here from her native Indiana. Allen, who was running a printing business in Indiana (he remains a part owner), joined her soon after. Allen is now 64 and Barbara is 65. When they first arrived here, they were startled by the community's geriatric ambience--where neighbors barely knew one another and a desolate quiet hung in the hot air day after day. "I'm a very up person, and moving in here was one of the low points in my life," says Barbara, sipping iced tea on their covered backyard patio.

But slowly, they got acclimated. They made a point to get out to Phoenix for dinners, music and sports events; Barbara, a former executive with the Girl Scouts organization in Indianapolis, took a paid, part-time position as the volunteer coordinator in the nearby high school. Eventually, she and Allen came to accept the age gap and their place in Sun City. Through their block parties, the Townsends helped older residents get to know one another. At the same time, their new home became a popular vacation destination for friends, kids and grandkids. Over the years, they've come to realize that the inheritance gave them a retirement home they never could have afforded otherwise.

"Every once in a while we look at each other and say, 'Gosh, are we lucky,'" Barbara remarks. "We look out and smell the orange blossoms in the yard. If it weren't for the damn rabbits, it would be perfect."

Allen chimes in. (He and Barbara went to high school together, spent their adult lives apart and, by chance, got together again 12 years ago--a serendipitous second marriage for both.) "God, are we lucky," he says, looking at Barbara and letting out a little whistle. "We're not rich, and we've got all this."

THE NEXT BIG THING

Driving east out of the desert from the Sun Cities toward Phoenix, I find it hard not to conclude that the future of retirement is a place where sensibility and money go hand in hand. It is difficult to describe just how profound the differences feel between the Townsends' neighborhood in Sun City and Ken and Carol Pierick's in Grand. You could ascribe part of it to aesthetic contrasts and amenities--more sugar and chocolate chips. But I think what I saw in Grand arises from the manifestation of recent wealth, the unlocking of all those 401(k)s, all those IRAs, all that company stock and real estate. Many American retirees, perhaps most, may be destined to recycle--and hopefully rejuvenate--the communities built for a previous generation that will be selling at a steep discount. But for the boomers who have enjoyed the bright side of the economy, there will be places like Sun City Grand, with its resort feel, sleek restaurants and classy architecture. A few years hence, there may be an even grander Grand--a Sun City Maximus, perhaps--that takes its design cues and amenities from an even younger, and richer, crop of boomers. The Del Webb corporation is already mapping out plans for another development farther out into the desert along U.S. 60. The research department is kicking into gear.

On the day I left Sun City Grand, I decided to take a final look around. I woke up early one morning and revved up my electric golf cart. Though it was only a couple of hours past sunrise, the roads were full of cars and carts--Grand residents heading to the links or the gym, almost all of them greeting me with a friendly wave. I waved back until my arm grew tired. Parking near the exercise center, I got out and checked out the Olympic-size indoor pool: It was packed with residents taking a water aerobics class. Across the hall, inside the large glass-walled gym, every treadmill, bicycle and bench press was occupied. Up the hill, I noticed people were walking toward the Chaparral Center, where the social clubs meet. Then I headed to the plaza by a coffee shop. Friends and couples were gathering on benches, drinking lattes by the shade trees and petunia beds. Muzak filtered through the soft dawn air. I noticed the stereo speakers, disguised as rocks, hidden in the flower gardens.

I walked up a brick path to take a closer look at home models I'd seen the day before. Elegant, spacious and beautifully appointed, the houses range in size from 1,100 to 3,000 square feet. One of the most popular models, it turns out, is thoroughly wired for Internet users. If you want to blast the air conditioner from a remote location online before coming home from work or vacation, you've found your place. This is not your father's retirement home.

I went back to the parking lot and got on my golf cart. I floored the accelerator and drove to the edge of the community. Construction crews were framing dozens of new houses in the morning light, trying to get a head start before the afternoon sun bore down. At a roadblock that signaled the end of the paved road, I got out and walked up a hill onto a half-built overpass. From there, I could gaze beyond into an endless expanse of blank Arizona desert that will be built out as soon as the orders for homes come in. It was easy to see that Del Webb is indeed making something out of nothing--and that the place can look like whatever boomers say they want it to look like. A skeptic might reject Grand as a mirage. But I interviewed dozens of Grand residents over several days, and all of them called it an oasis.

Maybe, it has occurred to me since, that's just another word for dream.