In NH, the total economic contribution of people over the age of 50 accounts for 50 percent of the state’s gross domestic product, according to an AARP briefing paper. And it’s poised to shape the state’s economy even further, says Todd Fahey, the executive director for the state office of AARP. “The size and spending power of America’s—and New Hampshire’s—50-plus (population) is formidable,” he says.
The challenges presented by NH’s aging population are well documented: Escalating health care costs, a shortage of younger workers, increased pressure on Medicaid and Social Security, and major shifts in housing and transportation needs. Economists call this demographic shift the “silver tsunami,” predicting that the wave of aging baby boomers will affect everything from the labor force to health care to tax revenue.
But this shift may have economic upsides. Economists and state leaders say the aging population may create economic opportunities for NH, from growth in sectors like health care, housing and financial services, to an increase in small businesses and entrepreneurship, to significant in-kind contributions through volunteering and long-term caregiving.
“Sixty-five is not what it once was. Maybe there are people retiring by necessity or by choice, but others are continuing to lead exciting, innovative and creative lives, and that’s going to have benefits for the economy and elsewhere,” Fahey says.
The number of state residents over the age of 60 is expected to swell from 262,047 today to 419,080 in 2020, then jump to more than 504,000 by 2030—about one-third of the state’s population, according to AARP. For the health care industry, this increase almost certainly means significant opportunities for growth, from new nursing homes and long-term care facilities to a range of job opportunities, says Dennis Delay, an economist at the NH Center for Public Policy Studies in Concord. “There will be more demand for healthcare, and I expect the health-care infrastructure will expand on that,” he says.
Developers and construction companies also may see growth opportunities as demand rises for housing and infrastructure that better suit an older population, such as homes that are low-maintenance and closer to public transportation, Delay says. “There’s a lot of focus on the problems of an older population, but one man’s problem is another man’s possibility,” he says.
Developers and contractors may also benefit from people wishing to retrofit their existing home. Increasingly, Americans want to “age in place,” meaning they do not want to leave their homes for retirement communities or long-term care facilities, but staying in their homes may mean they have to hire someone to help renovate, says Jamie Bulen, the associate director for communication for the state office of AARP.
The aging population could also be a boon for the financial services industry, says Dave Woolpert, president of Altus Investment Group in Concord. From financial planning to wealth and asset management to managing the shift from 401(k)s to IRAs, the need for professional financial services is likely to increase, he says. “Most financial advisors, if given a choice, would love to deal with the 65-and-older crowd,” he says. “They’ve got the assets. If I have 10 retired clients with assets, I’m certainly going to be doing better than if I have 10 clients in their 20s.”
The Second Act
With life expectancy expanding, retiring at age 65 from a traditional job may not mean retiring from the workforce altogether, says Fahey. Increasingly, older Americans are pursuing a second act, taking part-time jobs they enjoy and even launching their own businesses—a trend that could bring economic gains to the state, he says.
A survey conducted by Merrill Lynch in 2013 found that 71 percent of pre-retirees would like to include some work in their retirement years, with most seeking flexible arrangements, such as part-time or virtual jobs. Those who take part-time jobs fill in gaps in knowledge and experience in the workforce, and, because they’re working, are still contributing to Social Security, Fahey says. “This is one of the biggest benefits to employers—people who are saying, ‘What might I want to do next?’” he says. “They may only want a part-time job, but they’re going to be a more valuable hire because they have experience and know-how that can be deployed in the workplace.”
The state may see a spate of new small businesses, freelancers and entrepreneurial ventures as older residents retire from traditional jobs and decide to pursue the dream of starting their own business, Fahey says. Already, this trend has become so prevalent that AARP is launching a series with the Small Business Administration focusing on entrepreneurship. “I think we’re going to see a lot more of this, and those folks are going to become employers of other people and create jobs,” Fahey says.
Retirees who choose not to work may turn to the nonprofit sector and volunteer, making significant in-kind contributions to the state’s economy, says Gretchen Berger-Wabuti, executive director of Volunteer NH. Seniors are the most active volunteer segment, according to the Corporation for National and Community Service, which has more than 2,500 NH SeniorCorps members volunteering an average of 485,500 hours annually—an economic benefit valued at more than $10.5 million.
Senior volunteers contribute to everything from serving on town committees and planning boards to volunteering in schools to shuttling elderly neighbors to and from doctor appointments, she says. These in-kind donations help keep the state’s economic engine running. “There’s a large gap between what our state services can provide and what the need is, and that need is going to increase significantly as our population ages,” she says. “The volunteer service fills those critical pockets of need and will continue to do so. I can’t say where we’d be economically if we didn’t have those volunteers stepping in. You’d have a lot more people relying on the state.”
Likewise, unpaid caregivers—people providing some kind of long-term care to a relative—will become increasingly important in the state’s economic structure as the population ages, says Bulen. Today, nearly 220,000 family caregivers in NH provide unpaid care, with an annual value estimated at $1.83 billion. “You cannot underestimate the need for that volunteer structure. If we didn’t have those volunteers and caregivers, what would it cost us to provide even a fraction of those services? A lot,” she says. “It’s an incredibly important addition to the economy.”
Niche Markets
These shifting demographics may lead to a wave of startups and create new opportunities for companies that cater to the needs of older Americans. One demand that will almost certainly grow is for services that make it easier for older residents stay in their own homes, says Bulen, creating opportunities for companies that provide services in transportation, yard maintenance and lawn care, personal care, errand running, dog walking and house cleaning services.
Already, AARP reports an uptick in the range of industries aimed at people over age 50, from new anti-aging products to health care. Market researchers forecast that sales of anti-aging products and treatments will grow from about $80 billion in 2009 to more than $114 billion by 2015, according to a briefing paper prepared by Oxford Economics for AARP.
Other markets may emerge as the demands of the over-50 population shifts. “It is more clear than ever that New Hampshire’s 50-plus bring much more benefit than burden to all Granite Staters,” Fahey says.
The Longevity Economy
• The longevity economy in the United States is composed of 106 million people (age 50 or older). They are responsible for at least $7.1 trillion in annual economic activity, representing 46% of U.S. gross domestic product.
This represents the third largest economy in the world, after the U.S. and China and more than $2 trillion larger than Japan.
• At nearly 85 million jobs, the longevity economy represents 49% of the U.S. workforce and 43% of wages and salaries totaling $3.8 trillion.
• Granite Staters 50 and older make up 39% of the state’s population but are the state’s biggest economic generator, accounting for: - 50 percent of NH’s economic output – gross domestic product ($34 billion)
- 54 percent of jobs (500,000)
- 46 percent of employee compensation ($19 billion)
- 56 percent of state and local taxes ($3 billion)
- 57 percent of total consumer spending
• Though almost four in 10 of NH’s population is 50+, they generated $25 billion in consumer spending in 2013.
Source: Longevity Economy report, AARP and Oxford Economics
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