If you’re growing older, you’re not alone. Some sobering statistics from the U.S. Department of Health and Human Services highlight the explosive growth of the elderly population in America. For a start, those over 65 numbered 41.4 million in 2011, an increase of 6.3 million, or 18 percent, since 2000. 

Of course, young adults just “imagine” there are a lot of us “older” people — or perhaps they don’t notice them at all. But there are huge implications for those just entering the workforce. The aging of the population will bring them not only cost burdens but tremendous opportunities for creating wealth (mostly in caring for their parents and grandparents). That may not sound very sexy, but surely technologies as yet unimagined will play a role. 

But first, a closer look at the demographic facts from the survey: 

The Sobering Facts of Aging in America

• The older population (65+) numbered 41.4 million in 2011, an increase of 6.3 million, or 18 percent, since 2000. And that number is projected to increase to 79.7 million in 2040.

• The number of Americans aged 45-64 — who will reach 65 over the next two decades — increased by 33 percent during this period. 

• Over one in every eight, or 13.3 percent, of the population is an older American. 

• The 85+ population is projected to increase from 5.7 million in 2011 to 14.1 million in 2040. 

• Persons reaching age 65 have an average life expectancy of an additional 19.2 years (20.4 years for females and 17.8 years for males). 

• Older women outnumber older men at: 23.4 million older women to 17.9 million older men. 

• Older men were much more likely to be married than older women — 72 percent of men versus 45 percent of women (37 percent of older women in 2012 were widows). 

• Almost half of older women (46 percent) age 75+ live alone. 

• Social Security constituted 90 percent or more of the income received by 36 percent of beneficiaries in 2010 (23 percent of married couples and 46 percent of non-married beneficiaries). 

• Almost 3.6 million elderly persons (8.7 percent) were below the poverty level in 2011. But measured by the Census Bureau’s new Supplemental Poverty Measure, which better measures medical expenses of the elderly, the poverty level for older persons would be 15.1 percent (more than 6 percentage points higher than the official rate of 8.7 percent). 

The Impact on the Generations

For those in “middle age,” the impact of these statistics is simple. You must save more for retirement. Those in their 40s and 50s will follow the huge baby boom generation through the health care system. By then we will have new technologies and hopefully a more cost-effective delivery system. But by then the government will be far less able to extend benefits to all (Medicare).

For those just starting out, the temptation is to believe that there is no opportunity to get the “good life.” But if history is any guide, this changing demographic will provide fertile opportunities for growing your wealth — if government does not get in the way. The same generation for whom video games were designed will now be turning those talents into businesses serving the aging population. We haven’t seen anything yet when it comes to diagnostic imaging, or even physical therapies.

It’s truly a “glass half full or half empty” scenario. Yes, the elderly will drain the Social Security “trust funds” before millennials have a chance to benefit. But those younger workers may have a chance to buy the seniors’ homes at bargain prices, as they must raise cash to pay for their elder years. And even as millennials benefit from investments in technology, nanotechnology, health care and energy self-sufficiency, America may find jobs for the less skilled in taking physical care of the elderly.

America has always figured out a way to survive and prosper. But first we must face the facts of our economy — and our demographics. Only a realistic assessment of our needs and skills will equip us to grow into a positive future. And that’s The Savage Truth.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5’s 4:30 p.m. newscast, and can be reached at www.terrysavage.com. She is the author of the new book, “The New Savage Number: How Much Money Do You Really Need to Retire?” 

 

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