Small, Gray and Feminine – The future of aging in the US

2 04 2010

Skydiving at 92? (Source: Faded Tribune)

As part of the MIT Future Freight Symposium on March 11th, I attended a talk from Dr. Joe Coughlin of  the MIT Agelab. Dr. Joe Coughlin is a leading expert in demographics and behavioral changes due to aging – I highly recommend his blog disruptive demographics for more data and insights on aging. In his talk, he painted a picture that resembled a “nation of Floridas.” In a nutshell, trends are pointing towards a small, gray and feminine future.

Small

The fastest growing household in America is the single person category. 30% of the Americans above 65 now live alone and this trend will only accentuate, as one out of five baby boomers is currently living alone. While we can expect some of them to downsize and move closer to urban centers for convenience and fun, we foresee that most of them will downsize their habitation in the same neighborhood they grew accustomed to. For your reference, 70% of Americans live in suburban and rural areas. Naturally occurring retirement community in urban centers (NORC) is a currently observed phenomenon but will remain a niche segment.

However, small only applies to the size of their homes; not to their purchasing power. On the contrary, trends show that baby boomers will want to stay active and will want to enjoy life to the fullest. It is then worth noting that older adults control $1.6 trillion in buying power in the US, and that’s expected to increase by 29% over the next five years.

Gray

In 2020, 19% of the US population will be above 65. Aging in the US is all about how baby boomers will redefine what being old means. To put it in more relevant terms, one baby boomer turns 64 every 7 seconds. The fastest-growing demographic in the US is the over-85 age group.

While people will enjoy globally a better health as they grow older i.e. less disabilities, it is worth making the distinction between being ill and being sick. Indeed, the prevalence of chronic diseases is mind-boggling: 110 million Americans live with a chronic disease, 60 million of them with at least two chronic diseases. Growing old will be all about solving the paradox of living “healthy” with a chronic disease.

Feminine

It is no secret that wives mostly outlive their husbands. As of today, the ratio of women to men in nursing homes is 8 to 1. But this goes even beyond simple life expectancy. Most CPG companies are well aware of this, women are the family CEO and the primary care giver for older adults. Don’t believe it? 89% of all consumer electronics are sold to women – $55 bn per year. And for the more macho of you,  did you know that 80% of NFL products are sold to women? Even more surprisingly, women over 59 is now the fastest demographics in facebook – looking for new connections and platforms to validate their financial and health choices.

Moreover, women have climbed up the corporate ladder. As a result, they enjoy purchasing power unseen in previous decades. The number of women earning over $100,000 annually has tripled in the past 10 years.

Where does that leave us?

A couple of equations:

– more old people living alone (and not necessarily in dense urban areas) + more chronic diseases = explosion in home care giving services and sensing devices at home (e.g. sensing toilet that will test their sugar level and send it to their doctor)

– more old people living alone (and not necessarily in dense urban areas) + more of their relatives scattered across the continent if not the world = explosion in small packages home delivery services (think “UPS meets Geek Squad” to take on Dr. Coughlin’s  catchy soundbite)

– Willingness to stay active (62% of baby boomers plan to work part-time once they retire) + women outliving men = need/opportunity to rethink work processes to include  older women in the workforce mix

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