Aging in America is having a transformative impact on our society with a $7 trillion longevity economy fueled by 111 million Americans over the age of 50 who are living longer than previous generations. In fact, based on this cohort’s GDP and spending behaviors, the longevity economy is the third largest global economy behind the United States and China. Despite this economic power, today’s middle-age Americans will experience a very different retirement than their parents. Rising health care costs, increased debt, disappearance of benefit pension plans, an evolution in the traditional nuclear family and younger generations needing financial support paints a decidedly different picture for those age 50+ today. The biggest concern for the oldest of this aging group—the baby boomer cohort who are currently ages 55–73—is the lack of sound financial planning for the bonus years they will live.
According to a 2018 study by the Stanford Center on Longevity, one-third of boomers had no money saved for retirement, and among those who had squirreled away dollars, the median savings was $200,000.2 An article in AARP Magazine highlighted that the average retiree will need savings of at least $1.18 million to support a 30-year retirement (this calculation is based upon average returns of 6 percent and inflation at 2.5 percent) or for higher wealth individuals investments and savings that are 10 to 12 times current income levels.
These calculations are just to maintain a current standard of living. It does not factor in crisis life events such as caring for older parents or providing financial support to younger generations. While boomers have decided to not “go gently into that good night” in their golden years but to, “rage, rage against the dying of the light” (as Dylan Thomas poignantly wrote), many are in need of a financial wellness reality check.
The reality is while surviving and thriving into the ninth and even tenth decade of life is more achievable than ever, as Americans age, they will need some help with care and financial support. The group coming to the rescue and providing 83 percent of the long-term care needed for older Americans are family members.Download PDF