It is easy to forget that the aging of America (and the world) is mostly a good thing for seniors. We are obsessed with bad news on all fronts – the economy, Washington gridlock and daily acts of senseless terror. Even the weather has turned against us, with drought and wildfires in some areas and torrential rains, flooding and ruined crops in others.
Depending on your perspective, older consumers are bankrupting the nation with soaring health care costs. Or they're failing to buy enough consumer goods, houses and the like. Or they're buying too much and ruining their retirements. Or they're hanging around work too long and denying younger colleagues their fair shot at advancement and higher salaries.
[See: The 10 Fastest-Aging States.]
At the same time, older consumers are portrayed by some as a drag on the consumer-goods economy. But then take a look at direct health care spending by seniors. This is where the discretionary dollars of older consumers have been going, and seniors have often been the strongest rowers in this boat.
In investment markets, the mantra for older investors has been not to sell, but to stay in the market. Longevity gains have extended retirements and thus the period over which retirement nest eggs must last. To earn above-inflation returns and build assets for this longer haul, stocks are the best choice. It's hard to see seniors bailing on investment markets, at least not for some time.
Meanwhile, the powerful benefits of being part of America's fastest-growing population group are often either overlooked or viewed as problems.
1. Spending power. Baby boomer retirements will differ from earlier generations in many ways, not the least of which will be a voracious appetite for continuing everything they've been doing – working, learning, traveling and other pursuits that cost money. Consumer-product companies are already well into the transition of developing new marketing and advertising strategies to capture the dollars of older consumers. Staying in the materialistic mainstream will have enormous practical and psychological benefits to seniors.
2. Workplace smarts. Older workers are staying on the job in ever-growing numbers, but the baby boom generation is so large and its retirees are still so numerous that they are driving down the unemployment rate. Employers with older workforces are struggling with lots of aging issues, but the more enlightened workplaces are figuring out how to take advantage of older employees who have mastered job skills, show up on time and ready to work, and are more engaged and positive about their jobs than younger employees.
3. Social Security and Medicare. Social Security needs only relatively minor changes to regain its long-term financial soundness. Medicare requires a bigger fix, but the odds that older Americans will lose meaningful components of their health care benefits are very small. Meanwhile, the percentage of older Americans living in poverty has steadily fallen since Medicare was enacted in 1965. Along with Social Security payments that are indexed to inflation, these twin financial support pillars have helped reduce poverty rates among seniors from more than 30 percent to less than 10 percent – about half the rate of children in poverty and the lowest of any age group.
4. Social power. The reason AARP has so much clout is that seniors show up to vote. Older Americans comprise growing percentages of our overall population, so senior power at the polls will only grow. Also, it's fashionable to call 70 the new 50, and to roll out glamorous and virile septuagenarians to prove that point. But well before 2030, when 20 percent of Americans will be at least 65 years old, you won't have to look young to receive support and accolades for being old. Social attitudes toward aging and the elderly are moving steadily to healthier and more accepting norms. It may not feel good some days to be old, but there's never been a better time to grow old.