With millions of baby boomers reaching retirement age, fears are mounting of the economic impact if they follow the pattern of previous generations by curbing spending and draining Social Security and Medicare benefits, even though boomers have funded those programs for decades.
The 78 million boomers — born from 1946 to 1964 — have always broken the mold in terms of setting trends, and some investors and business and community leaders see their retirement as no different. They see an unprecedented, multibillion-dollar opportunity to offer new products and services to an active demographic group that’s expected to live longer than previous generations.
The Census Bureau projects that Americans 65 and older will make up 19 percent of the population by 2030.
Community and business leaders in places such as the coastal towns of Myrtle Beach, Hilton Head and Bluffton, S.C., are looking to the growing retirement community to help rekindle local economies. They’re rethinking sporting and shopping developments, as well as art centers, to attract on-the-go retirees looking for an array of easily accessible activities.
On the labor front, the health care industry is the most obvious benefactor of a longer-living active community. Demand for home health aides is expected to grow 70 percent in the next decade, according to the Department of Labor.
Demand also will be high in less obvious fields, such as for architects, who will be called on to build senior-friendly communities; financial advisers to help boomers plan their retirements; recreation workers, who will lead boomer-tailored excursions; and job trainers, who will teach the new workers called on to replace retirees.
“It’s only in Washington that 100 million people are viewed as an unaffordable cost and financial burden,” said Jody Holtzman, a senior vice president at AARP. “In the private sector, 100 million people are called a market and an opportunity.”
Concern about a drain on entitlements from retiring baby boomers has increased as talks intensify over avoiding the fiscal cliff. Boomers have been depicted as the elephant in the room. The Congressional Budget Office warned in June of a shortfall for entitlement programs, as aging boomers would consume a “significant and sustained” share of benefits from Social Security, Medicare and long-term-care services financed by Medicaid, the health care program for the poor.
Those projections fail to take into account that boomers are expected to work longer and they’ve never followed in the footsteps of previous generations, said Matt Thornhill, an author of “Boomer Consumer,” a book that examines marketing to the baby boomer generation.
“We became the generation of consumption and personal gratification,” Thornhill said. “Boomers are not going to spend at all like the prior generations did at 65. They’re going to spend at boomer levels. And there’s millions more of them.”