The U.S. isn’t getting any younger, and businesses, lawmakers and citizens are adapting to stay ahead of the curve.
Getting old isn’t what it used to be.
At least, that’s what Bob Lowry has found in recent years as he’s blazed a trail through what many would consider to be an early retirement. In 2001, at the age of 52, Lowry stepped away from his job running a management consulting company for radio stations. His wife, Betty, left her teaching job not long after, and the two began to figure out exactly what to do with the rest of their lives.
But retirement – and, more broadly, getting older – hasn’t played out exactly as Lowry expected. In fact, through his effort to spread awareness about aging and retirement through his blog, A Satisfying Retirement, Lowry’s found there’s a lot of confusion out there as to what getting older actually looks like in the 21st century.
“The biggest misconception is that at the age of 65 you retire and go to Florida. That was really the generation before mine. Very few of my readers are content to sit on a lawn chair and play 18 holes of golf a day,” says Lowry, who opted to remain in Scottsdale, Arizona, when he retired rather than uproot and move away from family. “They want to be engaged and involved and do a lot of volunteer work.”
Much ado has been made about the baby-boom generation reaching retirement age and either leaving the workforce en masse – in part straining the country’s Social Security funds – or remaining in their jobs long after the historically standard retirement age. A Gallup poll earlier this year found that 74 percent of U.S. adults said they planned to work in some capacity beyond age 65.
This changing attitude toward work is only one cultural shift the nation and its 50 states will need to grapple with as an aging America becomes less of a far-off prediction and more of a full-blown reality. Changing attitudes toward health care – and the increasingly common desire for the elderly to age and die in their own homes – and lifelong learning experiences will force states to adapt their budgets more to the needs of the post-50 generation and less to those just starting out in life.
A brief glance at elderly employment statistics from the Bureau of Labor Statistics reveals this dynamic is already playing out. More than 9.2 million Americans over the age of 65 held either a full- or part-time job in August – a 64 percent increase from the 5.6 million elderly workers the U.S. maintained a decade prior.
“In the past 30 years or so, there has been a steady incremental increase in the percentage of workers … 65 and over who are in the workforce,” David Nathan, a media relations manager at the AARP, told U.S. News in an email. “The figure in 1985 was 10.8 percent – a little more than one in 10 of those 65 and over. With only one or two exceptions, the percentage has gone up every year since then and now stands at nearly one in five – 19.2 percent. That percent is expected to continue to increase in the coming years.”
Part of older Americans’ reluctance to leave the workforce comes from the fact that people are living longer today than they were decades ago. Per the Social Security Administration, the average 65-year-old man today can expect to live at least another 19 years. The average 65-year-old woman, meanwhile, can expect at least another 21.5 years. One in four 65 year olds can expect to live past age 90, and one in 10 is expected to reach 95.
According to the Centers for Disease Control and Prevention, the average 65 year old in 1960 would be lucky to make it to 80. And while the CDC in 2015 identified a slight downtick in average U.S. life expectancy – from 78.9 years to 78.8 – expectancy is still considerably higher than it was decades ago.
“Personally, I think that’s a healthy change. While people have been living longer, they’ve also been generally healthier in old age, more vital, disability rates have gone down and so on over the course of the 20th century,” says Ronald Lee, a demography professor at the University of California—Berkeley’s economics department. “It doesn’t seem intergenerationally fair that older people who are living longer and are healthier should be retiring earlier and earlier and receiving support from working-aged people who are struggling themselves.”
But the ability to – or, in the case of many whose nest eggs were walloped by the Great Recession, the necessity of – working later in life only scratches the surface of the demographic and economic upheaval associated with America’s aging population, which is starting to put a considerable strain on many state budgets in the form of elevated health care burdens and lower tax revenues as Americans tend to pay fewer taxes as they get older – in part because of retirement and in part because they naturally tend to spend less than younger adults, according to the Bureau of Labor Statistics.
A report published earlier this year by the Urban Institute noted that the demographic shift “puts pressure on both sides of the ledger, lowering some tax revenue sources while pushing up the need for spending on services, especially health care.” And, indeed, a separate study from the National Association of State Budget Offices in June found that 33 states reported fiscal 2017 revenue collections were lower than they’d forecasted. Aging populations are believed to be one of several factors exacerbating individual states’ budget situations.
In an effort to get a more hands-on look at how individual states are faring under a demographic shift expected to play out for decades to come, U.S. News put together the Best States for Agingranking.
The U.S. News Best States for Aging ranking measures states’ efforts to effectively serve their senior citizens by keeping them healthy, financially secure and involved in their communities. States are scored relative to each other in 12 factors that average into one overall score.
The factors are:
- Life expectancy at age 65, according to the Centers for Disease Control and Prevention.
- The share of adults 65 years old and older reporting at least “good” health, according to the CDC.
- The share of adults 65 years old and older reporting minimal physical inactivity during leisure time, according to the CDC.
- The share of adults 65 years old and older reporting frequent mental distress, according to the CDC.
- Unemployment for adults 65 years old and older, according to the U.S. Bureau of Labor Statistics.
- The share of adults 65 years old and older with a dedicated primary care physician, according to the United Health Foundation.
- The share of adults 65 years old and older that are considered able-bodied, with no cognitive, visual, auditory, ambulatory, self-care or independent living difficulty disability, according to the United Health Foundation.
- Average monthly costs for various assisted living and care options, according to the Genworth Cost of Care study.
- The share of Medicare Advantage enrollees in plans that are rated four stars or better, according to the Centers for Medicare and Medicaid.
- The share of state nursing homes rated four stars or better, according to the Kaiser Family Foundation.
- The share of the state population that is 65 years old or older, according to the Kaiser Family Foundation.
- Cost of living, according to the Missouri Economic Research and Information Center.
Colorado took the top spot in the rankings, followed by Maine, Hawaii, Iowa and South Dakota to round out the top five. The Centennial State ranked in the top 10 across several subcategories, including nursing home quality, life expectancy, overall health and senior unemployment.
But Colorado was also among the more expensive states in terms of health care costs – a status that has not been lost among the state’s budget-conscious as its population ages rapidly. The Colorado Department of Local Affairs last year pegged it as the third-fastest growing state in terms of population growth among those at least 65 years of age. Among the complications associated with that distinction was a tighter job market and “an expected decline in per capita tax revenues to the state and many local governments.”
And given the combination of lower per capita tax revenues and higher state burdens for programs such as Medicare, Colorado officials are looking at ways to head off the potential costs associated with the state’s ongoing demographic shift.
“If we don’t get out ahead of [rising health care costs], it’s just going to take a greater and greater proportion of each state’s government economy. And it’s gonna squeeze K-12 [education funding]. It’s gonna squeeze higher ed, our universities. It’s gonna squeeze transportation,” says Democratic Gov. John Hickenlooper, indicating that he’s determined to “really … go aggressively after cost” to make health care more affordable to citizens and less of a burden on the government.
Still, Colorado was among the 10 youngest states U.S. News profiled, with just 14 percent of the state’s population at least 65 years of age. In states such as Maine, West Virginia and Florida – where the elderly population accounts for 20.5 percent, 19.1 percent and 18.7 percent of the population, respectively – the population shift is even more acute.
But it’s not just individual states that are concerned about rising health care costs. Lawmakers across the country have expressed concerns as their constituents’ health care burdens continue to rise and cash-strapped retirees try to figure out how to cover their medical bills.
“The biggest fear is not the overall financial situation, it’s health costs. Medicare is great, but it only covers 80 percent if you’re lucky. And the way Congress acts, nothing is guaranteed,” Lowry says of interactions he’s had with readers and other elderly Americans through his blogging and book writing. “You can go to the gym 12 hours a day, but you’re still going to get old, and you’re still going to fall apart. It’s going to cost a very pretty penny.”
Indeed, Fidelity Investments in August estimated the average 65-year-old couple retiring this year would need $275,000 stashed away to cover health care costs over the rest of their lives. That’s up 6 percent from just a year ago.
The Bureau of Labor Statistics’ consumer price index, meanwhile, shows nursing home and adult day services have seen costs rise 37.2 percent across the country over the past 10 years. Broader medical care costs, meanwhile, have gone up 35 percent.
The index estimates prices included in its calculations have climbed only 18 percent over that period. So medical care costs are essentially doubling the country’s broader rate of inflation.
“The health care side is where the big concern is for the U.S., and really, it’s probably underappreciated in many other countries as well,” Lee says. “Right now, Medicare and Medicaid are still relatively modest compared to GDP, but they’re going to be increasing fairly rapidly.”
Still, physical therapy, in-home care and medical employment as a whole have soared along with prices. Affording quality care has become a concern for many, but millions of others have found themselves new job opportunities in industries such as health care and retirement planning as baby boomers transition into their golden years.
Outside of these aging-adjacent industries, though, much of the private sector stands to benefit from the introduction of products that may not have seemed marketable years ago. Gillette recently unveiled the new TREO razor designed to make shaving another person easier – potentially a boon for the growing pool of adult children tasked with looking after their parents as they age.
“That can be seen as, ‘Wow, that is great social responsibility.’ But it’s also fantastic business. It’s a great analysis of an unmet need in the marketplace that they can fill,” says Michael Hodin, CEO of the Global Coalition on Aging. “The global number is there’s about a $15 trillion silver economy, which is what we call this.”
States such as Florida and Maine naturally enjoy stronger silver economies than younger and more spread-out states like Utah and Alaska, where just 10.9 percent and 11.3 percent of the already small populations are at least 65 years of age, respectively. But the advent of remote monitoring technology through screens and in-house tools could completely revolutionize how health care is practiced in these areas, allowing older workers to either remain at home or in areas where immediate access to a physical caregiver isn’t as much of an issue as it is now.
“Aging in place is all the rage now, and globally, too. [Remote patient monitoring] is about to really take off,” says Hodin, who notes that Intel and Phillips, in particular, are at the forefront of some of these elder-focused technological innovations. “The opportunity to transform the delivery of health care, where remote monitoring becomes the standard of care and where, instead of having to run to the physician’s office or a hospital, is phenomenal.”
Hodin’s coalition partners with a host of private sector companies such as Bank of America, Merrill Lynch, General Electric, Intel, Deloitte, Pfizer and others as they aim to raise awareness about the global aging trend, prepare companies to maintain older payrolls and potentially identify new business opportunities to better connect with that older demographic.
This effort to make corporate America more elderly-friendly is crucial, he says, if companies want to attract older customers and ultimately take advantage of the glut of older workers remaining in the workplace longer. He likens the potential impact of a more accepting corporate environment for older Americans to the rise of women in the workplace decades ago.
“We opened up an entire part of society that has added trillions of dollars in economic impact and has been a driver of growth through the women’s movement. And you can do the same thing with a 55-plus category,” he says. “I think that’s the model from a societal point of view.”
In some sense, that model may be a necessity for many companies as they struggle to attract younger workers in the years ahead. America’s aging trend is twofold in that folks are living longer while birth rates have diminished. According to the CDC, the number of U.S. births fell 1 percent in 2016 alone, dropping the general fertility rate to 62 births per 1,000 women between the ages of 15 and 44.
“When you look at the trend line, particularly from a public policy point of view, it’s the low birth rates that have the biggest impact, because it profoundly transforms the character of society,” Hodin says. “There are more old than young around the world. The U.S. is less dramatically involved in that at this moment, but it’s coming to us very rapidly.”
But the story of aging appears to have taken on a more negative connotation in recent years than was the case a few decades ago, Lee says. Concerns about health care funding, Social Security viability, state pension burdens and tax revenue reduction have become the new norm, and elderly health in some sense appears to have plateaued.
“It’s also disturbing that the people just before the threshold of getting older, say, between 50 and 65, they’ve had rising disability rates, increasing obesity, increasing diabetes, and as they start turning 65, they may well be in worse health than earlier generations,” he says. “That’s a cloud on the horizon.”
Still, Lowry says aging and retirement in the 21st century isn’t all doom and gloom. He describes his own experience as “extremely positive” and notes that, even though recent studies have suggested middle-aged Americans aren’t the pinnacles of health that they once were, the country’s older individuals today are largely more mobile and healthy than they were in decades past. In some sense, he says, 65 is the new 75.
“It’s an extremely positive experience now, but I remember at my parents’ age, they did just kind of sit. They really didn’t do anything,” Lowry says of the aging process. “It’s really been reinvented; the idea of moving to Sun City and driving around in a golf cart all day is just not acceptable anymore.”
Casey Leins and Deidre McPhillips contributed to this story.
Source: US News & World Report