Shifting demographics have catalyzed new priorities, policies, and plans.6 Americans are living longer and staying healthy into their later years. The expanding over-65 population reflects the increasing diversity of our society. And older Americans live on both sides of an economic gap—some in financial comfort and others on limited incomes. Consider these demographic trends:
The population worldwide is aging due to falling fertility (fewer births per woman) and rising longevity (longer lives). In the United States:
Average life expectancy at birth rose from 47.3 in 1900 to 76.9 in 2000.
In a 2006 study, 80 to 90 percent of participants age 65 to 75 and approximately 60 percent of those over age 85 reported excellent or good health.7
The over-65 population numbered 35.9 million in 2003, an increase of 3.1 million (9.5 percent) since 1993. Among this population, 18.3 million people were age 65 to 74, 12.9 million were 75 to 84, and 4.7 million were 85 and older.
The number of centenarians (age 100 and older) has increased in the past several years, from about 37,000 in 1990 to more than 50,000 in 2000. About 80 percent of centenarians are women.
The over-65 population is projected to be twice as large by 2030 as in 2000, growing from 35 million to 72 million, or nearly 20 percent of the total population.
The over-85 population is projected to increase from 4.7 million in 2003 to 9.6 million in 2030.
In 2003, 17.6 percent of the over-65 population was African American, of Hispanic origin, or Asian or Pacific Islander. This percentage is expected to increase to 26.4 percent in 2030:
African-Americans—from 8.2 percent to 10 percent.
Hispanic origin (of any race)—from 5.7 percent to 11 percent.
Asian or Pacific Islander—from 2.8 percent to 5 percent.
In 2000, 13 percent of the over-65 population spoke a language other than English at home; among them, more than one-third spoke Spanish.
Statistics on the current and projected wealth of older Americans indicate a continuing chasm between the “haves” and the “have nots”:
The median income of people over 65 in 2003 was $20,363 for males and $11,845 for females. For one-third of Americans over 65, social security benefits constitute 90 percent of their income.
Households maintained by people over 65 have a higher net worth ($108,885 in 2000) than all other households, except for those maintained by people in the 55-to-64 age group.
People age 50 and older control more than 50 percent of the total U.S. discretionary income.8
The estimated annual spending power of baby boomers (born between 1946 and 1964) is more than $2 trillion. Each household spends about $45,000 a year.9
Older adults are better educated than they were in the past, and this trend is expected to continue:
In 1950, 17 percent of the over-65 population had graduated from high school, and 3 percent had at least a bachelor’s degree. By 2003, 72 percent were high school graduates and 17 percent had at least a bachelor’s degree.
The future older population is likely to be even better educated, especially when baby boomers start reaching 65. Increased education levels may lead to better health, higher incomes, and more wealth, and consequently higher standards of living in retirement.
People now in their 50s are predicted to work longer than members of prior generations.
In 2012, more than 60 percent of men age 60 to 64 are projected to be in the workforce, up from about 54 percent in 1992.10
A 2005 study revealed that more than three-quarters of baby boomers expect to keep working past age 65,11 in part to increase their retirement income but also because they know they will live longer.