With the first baby boomers retiring from the workforce in large numbers, many are wondering how the new retirees are supporting their new-found free time.
A recent Census Bureau report gathered data on the most recent non-workers, and the following 11 facts from the survey point to trends.
- America is getting older. While the nearly 40 million Americans age 65 and older currently make up 13 percent of the total population, the 65+ set will rise to 20 percent of the American population by 2030. Within that time, the American median age will increase from 37.2 years to 39.6 years—a surge from a median age under 30 in the 1960s and ’70s.
- But Americans are still young relative to the developed world. While the United States is aging rapidly, Canada, Japan, and the majority of Europe have older populations in comparison.
- Diversity among the “graying” America. Approximately 15 percent of whites polled are over the age of 65, whereas 9.4 percent of the Asian respondents, 8.8 percent of blacks polled, and 5.5 percent of Hispanic survey takers were over 65.
- Where are more seniors living? 11 states have more than 1 million people age 65 and over, with California topping the list at 4.3 million. Florida, West Virginia, Maine, and Pennsylvania round out the top five. Bringing up the rear in senior citizen proportions are Alaska, Utah, and Texas.
- Longer life. The average life expectancy for a 65-year-old American male is 17.7 years, and 20.3 years for a 65-year-old American female. Both figures are gains of 3-4 years compared to the previous generation. Senior citizens that are 75 years old can expect to live another 11 years if they are men and 13 additional years if they are women.
- Tipping the scales. Though health risks due to smoking are decreasing with diminishing numbers of smokers, a higher percentage of obese people are increasing the well-being risks that come from the condition. Obese people face impaired mobility, a greater risk of death, and the increased chances of being placed in a nursing home.
- What’s killing us now? While heart disease and cancer are the two leading causes of death for elderly Americans (a trend seen over several decades), Alzheimer’s disease has moved up to fifth place from seventh in 2000. Meanwhile, the suicide rate among those 65 and older was down to 14.9 per 100,000 people in 2010 from 19.7 per 100,000 in 2000.
- Largely independent. Citizens ages 65-69 have an average yearly income of $37,200, but this dips to slightly less than $20,000 for those over the age of 80. Income sources include Social Security (37 percent), working (30 percent), pensions (19 percent), and investments and savings (11 percent). Retirees that are younger generate more income through employment, and older retirees generate more income through Social Security.
- Working late. Although 65 percent of employees retire when they hit 65 years old, those still working after that age do so on a part-time basis. Those with higher-education degrees and divorced women are more likely to be in the workforce for the longest periods of time.
- Kings and Queens of their castles. People ages 65 and older have the lowest poverty rate compared to other age groups. In addition, the percentage of homeowners in the same age group (81 percent) has remained even, while the percentage homeowners under age 35 have decreased from 43 percent in 2006 to approximately 37 percent today.
- Still together after all these years. The percentage of married people in their late 60s to early 70s has been steady at about 75 percent for five decades. The amount of widows has contracted due to more women getting divorced, as well as more men increasing their longevity. Asians that were polled were more likely to remain married as they aged, with whites, Hispanics, and blacks trailing in numbers.
As life expectancy continues to increase with greater focus on health, exercise and nutrition as well as improving technology, the Boomer generation is going to realize increased stress on their retirement savings. Those who have not saved enough may face becoming dependent upon government assistance and insurance like Social Security or may be forced to take equity from their homes.
Seniors who don’t want to compromise the retirement lifestyle they’ve always dreamed on might strongly consider alternative savings and investment products. The ideal outline of these products might combine savings protection with interest earnings and the guarantee of income that you can’t outlive.
Products like fixed indexed annuities, especially when combined with lifetime income riders, provide a compelling solution for those in or facing retirement.