Older Americans: A Changing Market,

Twenty-five years ago, if you asked someone to describe the typical older American, you’d likely get a snapshot of a gray-haired woman with glasses, sitting on the front porch knitting scarves for her grandchildren. Ask what this grandmother purchased regularly and you’d probably hear a fairly short list—prescription drugs, home-medical supplies, and maybe an occasional bus trip to Atlantic City.

Today, that image is all but shattered. While there are still plenty of gray-haired grandmas who like to knit, there are far more older adults who are reinventing what it means to grow old in America. Instead of seeing their mature years as a time to sit back in rocking chairs, they’re gearing up for their next adventure in the 20-plus “bonus” yearsthey now have ahead of them. Armed with greater longevity and better health, they plan to keep working or maybe change careers altogether, buy a new home or remodel their
old one, travel to exotic locales or take the grandkids on an overnight trip—and finally do everything else they’ve put off while raising their families and working full-time. What’s more, the majority of today’s 55+ Americans are financially ready and able to purchase the products and services they need to make their plans a reality.

The 55+ population is changing dramatically—driven in large part by the aging Baby Boom generation that is more educated, healthier, and wealthier than any generation before it. The leading edge of the Boomers (born from 1946–1964) turned 60 in 2006, and behind them is a tidal wave of Americans heading toward redefining the 55+ demographic.

Today’s 55+ population is:

Growing rapidly. The number of Americans age 55 and over will jump from 67 million in 2005 to 97 million in 2020. This enormous 45 percent gain compares with an only 14 percent projected increase for the U.S. population as a whole.

Living longer. In 1900, the average 65-year-old could expect to live 11.9 more years; by 2003, that number rose to 18.5 years.

Better educated. Until 1980, the majority of older Americans had not completed high school. Today, nearly 80 percent of 55-year-olds have a high school diploma, and 23 percent have a bachelor’s degree or more. These numbers are only increasing as the Baby Boomers age.

Committed to homeownership. Older adults have the highest homeownership rate among Americans, with more than 80 percent of householders age 55 and over owning homes.

Better off financially. Among the nation’s 18 million households with incomes of $100,000 or more, 27 percent are age 55+. This age group also has substantial financial assets, including stocks. Between 2001 and 2004, people age 55–64 saw their net worth increase 29 percent.

Spending more. When compared with other age groups, older consumers’ spending is growing faster and is already above average. Among Americans age 55–64, spending rose 10 percent from 2000 to 2004, including more spent on discretionary items.

Source: Older Americans: A Changing Market, 5th Edition, New Strategist Publications.

These are just some of the numbers that are forcing today’s businesses to sit up and take notice of this huge and powerful group of consumers. No longer can “55+ marketing” be relegated to the senior housing and healthcare industries. Today, every business in America must ask itself, “Are we prepared to serve consumers over age 55?”

Society of Certified Senior Advisors

Aug. 03, 2011

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