Market Segments



Trends in Post-Retirement Living
By Clay Beach, Beach List Direct

In an aging US population, the choices and issues surrounding post-retirement living and long term care are foremost in the minds of millions of Americans. Expert predictions say this new world of seniors will emerge suddenly rather than gradually.

The grace period will extend up to the year 2010. After 2010, and for the next 20 years, the age 65+ population will increase from about 39.4 million to 69.4 million, or more than 20 percent of the US population. The age 85+ population is projected to be 5.7 million by 2010 and 8.5 million by 2020. This latter group will attract a tight focus as a high user of medical and health care services and long term care options.

Chronic conditions – arthritis, hypertension, heart disease, visual and hearing impairments and depression– are major factors in determining the health, independence and lifestyle of seniors, along with their social networks and financial wherewithal.

In the US, long term care of seniors is largely a business of care by family members and other volunteers. More than two-thirds of disabled seniors rely on help from spouses, children and others. Yet, the financial climate for seniors has improved significantly during the past three decades, and more can afford to make careful decisions regarding their living arrangement in very old age.

Americans over age 60 tend to share many principles and ideals, which often is attributed to their coming of age during the deprivation of the Great Depression and World War II. They also, however, enjoyed financial stability and success in the relative calm of the post-WWII era.

According to one survey, characteristics describing these generations (age 60-78 and age 78+) include:
• patriotic
• charitable
• politically engaged
• loyal daily newspaper readers
• concerned about family
• committed to their children and grand-children
• value personal and individual contact when making purchases

With that list in mind, common tips on selling to seniors include:
• developing relationships
• making purchase of product easy and hassle free
• loyalty
• direct mail (seniors have time to read longer messages)
• education on the selling process
• more formality (courteous behavior and proper English)
• No pressure for a fast decision
• An understanding of their current life stage and their lifestyle

In a working paper, Edward N. Wolf of the Levy Economics Institute at Bard College says “the wealth of the oldest age group, age 75 and over, gained substantially, from only 5 percent above the mean in 1983 to 32 percent in 1995 but then fell back to 20 percent in 2001.”

“Many older American households are doing quite well indeed. One in every ten of them receives more than $40,000 a year, almost three times the income of the median older household,” he adds.

“Among those aged 70 or over, households in the top five percent have $670,000 in wealth, about eight times that of the average household, according to James P. Smith, of Syracuse University. “Over the last three decades, the economic position of older Americans has improved dramatically and did so more rapidly than for any other age group.”

According to Steve Sjuggerud, an advisory panelist at Investment U, the average wealthy American has $1,400,000 in assets, and $275,000 in debts, for a net worth of over $1.1 million. “Of those assets, they're fairly equally split between "financial" assets (stocks, bonds, mutual funds and cash), and "non-financial" assets (real estate, personal business equity, collectibles),” he says.

Haider and Loughran found that the median bequeathable wealth of the working population grows with the worker’s age, while the median bequeathable wealth of the nonworking population increases through ages 68 to 70 and then declines. By the ages of 77 to 79, the median bequeathable wealth of those who were working ($226,500) was more than double that of those who were not working ($112,300). Older workers may continue to contribute to their savings and pension plans, increasing their bequeathable wealth.

And, in a report based on the US Census Bureau statistics, Seniorjournal.Com says the percentage of older men - senior citizens 65 and older - in America's workforce declined dramatically over the past decades from 46 percent in 1950 to only 19 percent in 2003, but for senior women there has been no change. But many seniors continue to work, many part-time, primarily because they enjoy their work. “These are some of the findings about older workers in a new report by the U.S. Census Bureau, that also says older workers are relatively healthy, prosperous, and well educated.”


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