Getting Ready to Grab a Share of America's Senior Boom

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Getting Ready to Grab a Share of America

More than 77 million members of the Baby Boom generation were born between the years of 1946 and 1964.  As a recent article in the Sacramento Business Journal1reminds us, the first of those Baby Boomers will begin to turn 65 in just two more years. 

Then, by 2030, more than 20 percent of the American population will be over 65.  Anyone could have predicted this with grade school arithmetic as long as 50 years ago.  And the stakes for business are monumental. 

For one thing, the mature Boomers will be the most affluent demographic group in world history.  The McKinsey Global Institute predicts that they will spend 40 percent of all the money that changes hands in the U.S. in the next decade.2

Today marks an unprecedented opportunity for businesses to prepare for the needs and desires of this evolving group of big spenders.  Right now, the recession is holding their consumption down.  They currently are saving more and spending less than in recent decades.  But once the economic recovery is underway, expect to see an explosion in demand from Boomers. 

One challenge for these consumers is the weakness of the social safety net upon which too many of them will depend.  The Medicare trust funds are expected to be out of money by 2017.  Social Security, likewise, should go bust by 2037.  One reason is that following the Boomers are fewer Gen-X workers to take up the slack.

This suggests a number of potential trends.  For example, Boomers will stay in the workforce longer than workers in prior generations.  Many companies are preparing to retain and optimally use these older workers. 

Aging Boomers will also be in the market for affordable housing with a wide range of support services attached.  A number of companies are positioning themselves in this market to either provide tailored housing solutions or to enable seniors to age more comfortably in their current homes. 

Many of the more affluent Boomers will have plenty of savings, and many will work because of the fulfillment that working provides.  There will be many opportunities to serve the needs of this segment.  However, it's a rare company that has proactively embraced the future needs of the aging Boomers.

Why?  As Booz & Company partner Richard Rawlinson highlighted recently in Strategy+Business,3 it is common for companies to miss the obvious signals of a shift in the nature of markets, even when the inevitability of the new opportunity is plain to see...

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