CEO Blog: It's Not a Tsunami!
I don’t remember exactly when I first heard the term “Silver Tsunami” to describe the aging of the Baby Boom generation. Those of us working in the field of aging have long talked about the changing demographics of the United States – how lower birthrates and increased life expectancies meant the population was aging. We would point to the year 2010 and note that the oldest members of the postwar generation would turn 65 that year: reaching retirement and qualifying for Medicare and Social Security. “By 2030,” I would tell folks, “there will be more people over 60 than school-age children.” It was a way to frame the conversation about aging, society, services and resources to support them. People living longer, healthier lives is a good thing, but the “Tsunami” image of a destructive wave sweeping through society foreshadowed strained health care systems, labor shortages and funding deficits. Author Ashton Applewhite wrote, “a tsunami. . .strikes without warning, in fact, the demographic wave is washing gently across a flood plain. It’s not crashing on some undefended shore without warning.”
It is now 2020. We are a decade into the retirements of Baby Boomers. What is the impact of this generation on retirement? And life in America?
The Pew Research Center defines the Baby Boom generation as those born between 1940 and 1964. The people born after the end of World War II represented a dramatic increase in the population of the country. Boomers have overwhelmed society throughout their lives. Their sheer numbers impacted public education, college enrollment and the workforce. The purchasing power of 76 million people born in the United States from 1946 to 1964 changed clothing, housing, automobiles and all other aspects of the consumer economy. Music, film and entertainment. Where we live, and how we live, were driven by the absorption of the Baby Boomers into the country and its culture. The demographic wave continues to “wash across the flood plain” into retirement.
The American Community Survey (ACS) is an ongoing survey by the U.S. Census Bureau. The annual survey provides a treasure trove of information on the population of the United States and specific sectors by geography, age or other subsets. The ACS can tell us a lot about that demographic wave. The Population Reference Bureau is also a valuable source of information. I refer to both in this blog.
Now about the Baby Boom…
It’s not a monolith. Boomers are less diverse ethnically than the generations that follow them. Approximately 72 percent of Boomers are white, non-Hispanic. The percentage of the “white alone” population for persons under age 65 is closer to 60 percent. African Americans make up the largest minority group among Boomers, but they comprise a smaller percentage of the population (at nine percent) than they do among the population that is older than the Boomers, as well as among those born later. Boomers are also more likely to be native born, more likely to speak English (and nothing other than English) at home. We are a nation of immigrants, but the population boom of 1946 – 1964 was driven primarily by rising birth rates.
Aside from race and ethnicity, there are significant differences among Boomers. Boomers split almost evenly along political lines, with 44 percent identifying as “liberal or liberal leaning” and 44 percent as “conservative or conservative leaning”. Boomers may be more conservative overall than they were 20 years ago, but they still are represented across the political spectrum.
Economically, there are major disparities among Boomers. “First Boomers” (born before 1951) and Second Boomers (born between 1951 and 1955) were more likely to have defined pension benefits than later Boomers. And those pensions were more likely to include health coverage. This has a significant impact on household income in retirement. First and Second Boomers were more likely to work their entire careers with a single company and more likely to retire “early”. This cohort of “30 and out” workers became the volunteer workforce for nonprofit organizations, they started second careers, founded small businesses and became the target market for industries that catered to leisure pursuits. Later Boomers, and the generations that followed them, have not had the same experience.
There are “haves” and “have nots”. Boomers grew up and worked during the greatest economic expansion in the nation’s history, but wealth and income are not distributed evenly. Female Boomers are more likely to live in poverty. Social Security and Medicare help keep most Boomer retirees above the poverty line. But there is a wealth gap among Boomers. The top 10 percent of Boomers owned 75 percent of the financial assets of all Boomers. The bottom half of Boomers hold only two percent of assets. Home ownership accounts for much of this disparity. A moderate-income Boomer household has a net wealth as much as 14 times higher than a household with the same income that rents. Retirement savings vary widely, too. More than 40 percent of Boomers in the workforce today have nothing saved for retirement. Half of those that are retired rely on Social Security for the majority of their income.
Boomers are carrying more debt than prior generations. The median debt ratio (the amount of income that goes to debt payments) rose to 50 percent, more than three times the amount from 30 years ago. Mortgage debt, car loans, credit cards and health care bills all contribute to the rise in indebtedness. Boomers are far more likely to carry mortgage debt into retirement, something unheard of a generation ago.
They are working longer. Sometimes it is because they want to work. Sometimes it is because they must. Whatever the reason, Boomers are working longer. One in five Americans age 65 and over is in the workplace or is looking for work. This is double the rate in 1985, according the Bureau of Labor Statistics. College educated Boomers stay in the workforce longer than those without a degree. Changes in the labor market, notably the move away from manufacturing and the rise in service sector and technology mean that older workers are more able to work.
Even if they want to work longer, it does not mean they are able find work. Reports of age discrimination and downsizing of older workers are on the rise. According the Equal Employment Opportunity Commission (EEOC) when older workers lose a job, they “will likely endure the longest period of unemployment compared to other age groups and will likely take a significant pay cut if. . .re-employed.” Losing a job, for many Americans, also means losing subsidized health insurance, especially for those older workers who are not eligible for Medicare.
They are more likely to live alone. Boomers are more likely than previous generations to be divorced, and more likely to have never married. Boomers had fewer children on average than their parents. They were more mobile. The historical pattern of extended families (multiple generations) is less present among Boomers, and the “nuclear family” (parents and their children) was more of an anomaly of the 1950s and 1960s than a norm over the longer history of the country. More than one-quarter of Boomer women 65 and older live alone.
They are living better, longer. In 2020, approximately half of the Baby Boom will have entered retirement. One of the most dramatic changes in the United States since the first Boomer was born is a dramatic increase in life expectancy. Life expectancy has increased from 68 years in 1950 to 80 years today. Healthy life expectancy is increasing among adults 70 and older (Population Reference Bureau). Prevention and treatment of heart disease, cancers and vision problems have helped add to quality to the lifespan by reducing or limiting disabilities.
But there are troubling trends as well. Obesity continues to rise. Retired Boomers are 50 percent more likely to be obese. There are rising death rates related to alcohol and drug abuse. Suicide rates are higher. There are disparities in lifespan, too. Minority groups and people with lower incomes have lower rates of life expectancy. Social determinants of health account for most of the disparity in chronic disease and life expectancy.
As Boomers reach age 65, most of them are covered by Medicare. Universal health care is a hot button topic in American politics, but for one fifth of American (those age 65 and older), universal health care is a reality. It’s Medicare. One of the ways to Boomers differ from older retirees in the percentage of them that choose a Medicare Advantage plan for their health care coverage. Medicare Advantage plans are offered by private insurance companies. These Part C plans may offer different or additional benefits than traditional Medicare, such as vision, hearing or dental coverage. Beginning in 2019, these plans are also able to provide some level of non-medical supports, such as home-delivered meals or attendant care. Rates and benefits can vary widely. About half of Boomers opted for an Advantage plan in 2019, compared to 37 percent of all Medicare beneficiaries.
Medicare Advantage plans are required to offer equivalent coverage to regular traditional Medicare, but the devil can be in the details. Medicare Advantage plans may negotiate rates within a narrow network of providers, or reduce options for treatment. Coverage for treatment of chronic, long-term health conditions may vary widely from plan to plan.
What happens next?
Boomers have started entering retirement, and just as they have throughout their lives, their sheer numbers will have a significant impact on institutions and social norms. Given current rates of life expectancy, Boomers will continue to have a measurable impact over the next 40 years. Predicting the future is always a little risky, but here are some things to expect, and some suggestions of how to prepare for the demographic wave.
Health needs will increase. As people grow older, they are more likely to live with chronic health conditions. By age 85, most people will have at least one health issue that requires lifetime management. Increased obesity leads to increases in conditions such as diabetes and hypertension, orthopedic problems are exacerbated by excess weight. The rate of dementia is higher. Treatment, medication and maintenance of these conditions will challenge health systems. There are already shortages of direct care workers in many areas, and these will increase as current workers, many who are Boomers themselves, retire from the workplace. Informal caregivers, the family members and friends that provide the bulk of support for frail loved ones, will be challenged. Smaller families, more people living alone, will mean fewer people with a support system.
Financial hardships will challenge independence. Social Security and Medicare are the safety net programs that have kept most older Americans out of poverty. And Medicaid, which provides health coverage for the poor, serves the poorest and frailest seniors, the “dual-eligible” population that receives both Medicare and Medicaid. These are public programs, and as the Boomers age as one person in four may be covered by Social Security, Medicare or Medicaid. Chronic health conditions force seniors into poverty and often into institutional care settings. The ability to remain independent in the community requires not only access to healthcare, but also the ability to meet daily living expenses. Health and wellness are not “health care” but they are undeniably linked.
Here are some of the ways we can prepare for the future:
Address social determinants of health. Promoting health and wellness is key to independence and managing health care costs. Programs that help promote access to a high-quality diet, exercise and self-management of chronic conditions have measurable, positive impact on individual health. Many of these programs also address social isolation by promoting peer support and community engagement. More attention is being paid to the value of coordination and collaboration between health care providers and community-based programs. There are encouraging signs of progress in this area, including BRIA’s LIFEPOP program with MetroHealth. The recent National Summit on Health Care and Social Service Integration, hosted by the Administration on Community Living (ACL) highlighted examples of successful programs across the country that are helping promote better health, improve care and lower costs.
Promote the financial security of older Americans. Social Security has been highly effective in reducing poverty among older adults. It is the major source of retirement income for the majority of older adults. But, as older adults account for one-fifth of the nation’s population, efforts need to be made to ensure the solvency of the program. Likewise, Medicare and Medicaid have provided access to affordable health care services for people as they age and have done so at the time of life when most people deal with chronic health conditions and the need for long-term care. Social Security and Medicare are popular and successful programs. They are good public policy and should be championed.
Support the role of family caregivers. Informal supports are key to successful aging in place. Changes in the composition of families and family roles give us reasons to rethink how we support the family caregiver. In the 1980s and 1990s, family friendly workplaces policies considered the need for childcare, family medical leave and other policies that helped working parents and two-income households manage the demands of work and family. Public policies that support caregivers perform their roles and reduce caregiver burnout ultimately benefit society reducing institutional care needs and reinforcing family engagement and connectiveness. One example is companies that offer BRI Care Consultation to their employees through their employee assistance programs as a way to support working caregivers. Ohio and other states have adopted or considered caregiver support legislation or added a caregiver benefit as part of their network of services for family members of older adults.
Provide more options for affordable, accessible housing. Like it or not, in the United States, financial resources dictate many of our choices, and the greatest contributor to personal wealth among older adults is home ownership. Adequate housing is a health issue. Home ownership may not be a realistic goal for all older adults, but safe, affordable and accessible housing should be. Benjamin Rose, notably through its ESOP programs, help address the affordability of housing, through savings programs, foreclosure prevention, financial education and benefits counseling. Expanding on affordable housing programs, home accessibility modifications and resources to support seniors on how to maximize the value of their homes as a tool for retirement and long-term care planning are necessary if we are to ensure that aging-in- place is a practical reality. Investments in affordable, livable communities provide economic benefits for the entire community, not just for the older adult.
Promote careers in geriatric care. There is a looming shortage of health care workers. One of the programs that is helping address the shortage is the Geriatric Workforce Enhancement Program (GWEP). Benjamin Rose Institute participates in the GWEP hosted by Northeast Ohio Medical University. These programs offer students in health care fields of study the opportunity for real-world experience working with geriatric patients, clients and consumers. Exposing rising professionals to the rewards of working with older adults helps encourage them to consider entering the fields, while also improving the health and wellness of older adults. Northeast Ohio will benefit from this partnership between higher education, health care, community organizations, students, caregivers and patients. There are 48 GWEP sites across the country, supported by The John A. Hartford Foundation, the American Geriatrics Society, and the Health Resources and Services Administration (HRSA).
These examples are all underway, here in our community and across the country. They illustrate the importance of collaboration and the offer encouragement that we can continue to innovate to meet the needs of people as they age. Together, we can be successful in riding the wave.
References and Resources
Pew Research Center
Wealth Inequality – Richard Eisenberg
Older Americans in the Workforce
The State of Retirees
Medicare Advantage Demographics
EEOC report on older workforce
Population Reference Bureau