Baby boomers — the nearly 80 million Americans born between 1945 and 1964 who helped fueled one of the strongest periods of economic growth in American history — are barreling toward retirement. And as Americans live longer, and this massive cohort ages, the number of Americans over 65 is projected to balloon from 40 million in 2010 to 72 million in 2030.
Many are fretting about the economic impact of this "retirement crisis," as baby boomers slow their production and spending, and start requiring more and more government services. Lawmakers have been bracing themselves for the increase in demand for Social Security and Medicare, and the decrease in economic growth that will result from this wave of aging, retiring boomers. Analysts expect the country's average annual growth rate to drop to 2.4 percent from the healthy 3.2 percent of the last three decades.
But it's not all economic doom and gloom. Here are three areas that may well benefit economically as baby boomers get grayer and grayer.
THE HEALTH-CARE INDUSTRY
The average 70-year-old takes about three times more prescription drugs than the typical 40-year-old, says Tom Sightings in US News. "By the time they're done, some 78 million baby boomers will have survived millions of hip replacements and heart transplants, swallowed trillions of Advil and Viagra, and consumed billions of boxes of bran." That's a whole lot of health-care spending.
THE TRAVEL INDUSTRY
In their salad days, boomers were notoriously adventurous. "Thank the boomers who in the 1960s and '70s made shoestring student trips to Europe de rigueur," says Stephanie Rosenbloom in the New York Times. "Your naughty romp at Club Med? It was the boomers who propelled the singles resort scene to its apotheosis in the 1970s. Your posh room at the Copacabana Palace in the 1990s? Fueled by boomers' appetite for luxury hotels."
Members of this globe-trotting generation are about to have a lot of extra time on their hands. Though boomers (along with everyone) tightened their belts on travel spending during the Great Recession, now that the economy is picking back up, the travel industry is ready to pounce. Cruise lines and tour companies are shortening their itineraries for more affordable vacations, and offering boomer specials to new retirees.
THE FUNERAL INDUSTRY
Okay, this one is a little macabre. But with 2.4 million to 2.6 million deaths each year in the United States, funerals are already a $17 billion industry. And demand for funerals is expected to grow rapidly in the next couple decades.
CNBC explains how boomers are fueling this funereal growth:
Of course, boomers are primarily in their 60s; they aren't at death's door yet. But their penchant for controlling everything, even something as fundamentally uncontrollable as death, dovetails with the growing business of what the funeral industry calls "pre-need" sales.
"Through pre-need sales today, operators can lock up that future volume today," Rice said.
Ten years ago, the industry was in a slump, with costs rising and a slowing death rate. By selling pre-need funerals — the plot, the coffin, the service, even the catered reception afterward — funeral companies were able to generate revenue, even if profits slumped. [CNBC]
This article by Carmel Lobello originally appeared at TheWeek.com.
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