In just eight short years, all Baby Boomers will be 65 years old or older. In fact, each day, 11,000 people turn 65 years old.
Why is this important, and what influence does this have on our economy?
The Baby Boomers
The Baby Boomer generation is made up of an estimated 73 million individuals. They are the second-largest generation, following their kids – the Millennials.
This large number of Baby Boomers is increasing the overall aging of the United States. By 2050, there will be 88 million adults age 65 or older. This number represents 20% of the country’s population. The older adult population will become even more significant with time.
However, the country’s increasing age is not solely due to Baby Boomers. Better health care is contributing to longer lives, and lower birth rates are helping skew the data in relation to earlier years. In the 1900s, life expectancy after age 65 was about 12 years. In 2010, it was nearly 20 years. The fertility rate of women in the United States is 1.7 children per woman. To replace the population, the fertility rate needs to be 2.1 children per woman.
Using these factors, it is estimated that the number of Baby Boomers will outnumber those individuals younger than 18 by the year 2034. This mismatch will have implications in the future. There will not be enough young adults to care for the elderly.
The rapid pace of change will present challenges and opportunities for the United States. Both public and private sectors will need to address the age differences to ensure the health and well-being of older adults.
The Economic Impact of Age 65
The number of individuals age 65 and older is important for state and federal lawmakers. This statistic is used to help decide how billions of dollars should be spent each year. These funds go towards critical public services for older adults – things like senior citizen centers, job-training programs, and of course, health insurance provided by the Medicare program.
Age-related statistics are gathered via the United States Census. The Census is analyzed to determine differences across the country – areas of higher aging, areas where disabled individuals reside, and areas where there is a high concentration of older adults versus younger citizens.
Areas such as Appalachia and West Virginia are seeing a decrease in the younger population as these individuals move to larger cities while older adults stay behind. There is also a larger older adult population in Florida, where many people go to retire.
By using data from the Census, lawmakers can see where older adults reside and how much access they have to services they require. They can use that information to decide where to open new health clinics, senior citizen centers, and other resource facilities. The goal is to improve their access to care.
Federal Health Insurance Programs For People Turning 65
As we mentioned, the number of individuals over 65 helps lawmakers determine where to spend annual funds.
Medicaid, the health insurance option for low-income individuals, is the largest federal program that utilizes Census data to determine its funding. In 2015, the program received $312 billion in funding.
The Supplemental Nutrition Assistance Program (SNAP) is the second-largest federal program to use Census data, and it reported $71 billion that same year.
Finally, the Medicare program uses the same statistics. In 2015, it received $70.3 billion in funding for Medicare Part B.
These three programs will be greatly impacted by the aging population, and their annual funding will continue to increase.
Social Services Block Grants
Social Services Block Grants are used to fund adult daycare facilities, lunches for community centers, meal delivery, and protection and remedies from physical and financial abuse.
As with other federal programs, the funding for these grants is determined by the Census statistics. Funding is determined on a state-by-state basis and can be spent on a wide variety of programs. According to census.gov, 42 states spend more than $284 million to help care for nearly 950,000 individuals over the age of 65. The funds were used for emergency services, intervention services, counseling, and emergency shelters.
Increased longevity and the need to pay for their own health care are driving many older adults to delay their retirement. In fact, adults over 65 are the fastest-growing segment of the workforce in the U.S. Fewer retirees mean fewer jobs available for the younger generations. This is causing some companies to consider phased retirement and allowance for part-time work opportunities.
It’s also important to realize that fewer working-age individuals are paying into Social Security and Medicare programs – both due to the decrease in the population of the younger generation and the lack of jobs for these individuals.
As more and more people turn 65, will the economy be able to adjust to their needs?
While much of the federal and state funding is channeled through community organizations, the funds have not kept up with the increasing pace of aging. Organizations are having to seek supplemental resources to continue to provide support for older adults. For example, in 2004, federal funds were $1.8 billion. Ten years later, the funds rose to just 1.88 billion, despite the 30% increase in the population of those age 65 and older.