(Next Avenue invited all our 2016 Influencers in Aging to write essays about aging in America. This is one of the essays.)
As we live longer, our society is being transformed in ways we couldn’t have imagined. It’s vital that individuals and businesses recognize the tremendous potential of this longevity revolution. Far from being an economic challenge, our aging population could generate the most significant economic opportunity of our lifetime.
The “Silver Economy” is becoming an increasingly powerful force, with the spending power of 60+ consumers expected to reach $15 trillion by 2020. The U.S. longevity sector alone is currently estimated at $7.1 trillion, making it the world’s third largest economy, according to Oxford Economics, NLIRI.
72 percent of pre-retirees over age 50 say their ideal retirement will include some form of work.
This silver economy includes not just the direct purchases of products and services by our older citizens, but also the economic activity generated by their spending and broader needs. It includes every dollar spent by consumers, companies and governments on products, services and activities that enhance the quality of life of aging people, as well as the jobs, taxes, charitable giving and additional value that gets created in the process.
Much More Than Purchasing Power
Beyond purchasing power, businesses that embrace age-friendly workplaces can benefit from an advantage in the competition for talent. Nearly half (47 percent) of today’s retirees have worked, or plan to work, during their retirement years. It is predicted that working in retirement will become increasingly common; 72 percent of pre-retirees over age 50 say their ideal retirement will include some form of work (from Merrill Lynch’s 2014 report, Work in Retirement: Myths and Motivations).
The benefit lies not just in the quantity of workers, but in the value of their work. Compared with earlier generations of older Americans and current younger workers, today’s older population is unusually well educated. As a 2013 study by the Center for Retirement Research at Boston College found, workers between the ages of 60 and 74 are more productive than average workers who are younger. Companies can gain an advantage in the talent war by embracing an older workforce through offering flexible scheduling, telecommuting and re-aligned responsibilities, as well as a commitment to age-friendly workplaces and investments in the technological skills of all employees.
Key Issues Facing Older Americans
While we are on the precipice of a tremendous opportunity, we can’t overlook the sharp turns in the path ahead.
Aging has its risks, notably in the form of financial insecurity. Additionally, not all older people are capable of working, due to health constraints. And countless younger people are currently juggling work responsibilities as caregivers for older relatives or friends. We need to do right by our seniors and help them by developing solutions to these real issues.
Offering Longevity Training
To help address the longevity-related challenges our clients are facing, Bank of America Merrill Lynch hired our own director of financial gerontology in 2014. And more than two years ago, we started offering longevity training to all our Merrill Lynch financial advisers. Soon after, we expanded this training to the benefits and HR professionals of our corporate clients. The response has been tremendous.
I believe the benefits of investing in our aging society will become clear as we recognize the incredible potential that exists.
With consumer power, longer working lives, longer retirements and more time and resources to give back to their communities, older consumers command serious influence. If we work together — individuals, companies and the government — the U.S. can act as a global leader in harnessing and demonstrating the true value of our aging population.
This content represents thoughts of the author and does not necessarily represent the position of Bank of America or Merrill Lynch.