Experts warn ‘silver tsunami’ poses threat to the economy as over-65s are set to outnumber children by 2030
Seniors are set to outnumber children for the first time in American history within six years, as experts warn that the country is about to struggle with a dramatically aging population.
The ‘silver tsunami’ has already seen the burden on working age people double since 1960 when there were six workers for every over-65.
And millions now risk having no-one to help them as the poorly-paid care industry is squeezed out by better paid jobs in a tight labor market.
Economists have been warning about the impacts of the population timebomb for decades, but the situation has become more acute since the Covid-19 pandemic sparked the ‘Great Retirement’, with an extra two million people deciding to call it a day.
Half of the wealth in the US is now held by people born before 1965, a study found last year, helped by decades of surging house prices and falls in relative wages for younger people.
But for those without assets or with complex health needs the outlook is bleak.
Around 20 million over-55s already need assistance with daily tasks to live an independent life.
But a study by the Schwartz Center for Economic Policy Analysis found that almost eight million of them receive no help at all.
Actuaries warned last year that Social Security’s trust fund is expected to be depleted by 2034, with spending on welfare and Medicare predicted to rise from 9.1 percent of US GDP to 11.5 in just 12 years.
And America’s changing age profile means there will be just 2.75 working-age people for every dependent-age person by 2030 when children are included.
‘As the huge population of Baby Boomers retires we’re entering a period when millions of highly experienced, high-performance workers transition from being producers to being consumers,’ said economist Ron Hetrick from market analytics firm Lightcast.
‘A large number of retirees is not a problem in itself; the proportion of retirees to new workers is the problem.
‘That’s because when people retire, their demand for goods and services remains high, but now we will have significantly fewer people to provide those goods and services moving forward.’
The problem is not confined to the US with most developed nations experiencing an aging population including Japan whose population is expected to shrink 30 percent by 2070 when four-in-ten will be over 65.
The situation is so stark in South Korea that Oxford University professor David Coleman predicted the entire country would be extinct at current rates by 2750.
And even China, which recently lost its status as the world’s most populous nation to India, is now shrinking at a rate of nearly a million people a year.
And an older population is generally a sicker population, with greater demands on health as well as care services.
‘Thanks to advances in medical technology, people are living longer than ever before,’ said Dr Gary Small, of Hackensack University Medical Center in New Jersey.
‘Unfortunately, our bodies and brains weren’t engineered to function efficiently for the duration of today’s average life expectancy, so people are living longer but not necessarily better.
‘Alzheimer’s disease, diabetes, cancer and numerous other age-related diseases lead to disability and dependence, and relatively fewer adult children than ever before are available to assist with caregiving.
‘The economic and emotional burden of these trends are daunting.’
Projections by the US Census Bureau predict that one-in-four Americans will be over 65 in 2060, and that the number of people aged 100 or over will top one million by the end of the century.
The percentage of the adult population in retirement has soared from 15 percent in 2007 to just under 20 percent, accelerating steeply since 2020 and defying predictions by the Federal Reserve.
‘The impending demographic shift, in which older adults in the U.S. will outnumber children for the first time in history, presents significant societal and economic challenges and opportunities,’ said Patrick Mish of social work firm SilverStay.
‘This shift, often called the ‘silver tsunami,’ is expected to impact multiple facets of society profoundly.
‘As the population ages, the demand for health care services will substantially increase, particularly those related to age-related conditions such as dementia, arthritis, heart disease, and cancer.
‘This will require a significant expansion of health care infrastructure and services, including more specialized care facilities and care services.’
But a study last year by the Pew Research Center, found that nearly 20 percent of over-65s were employed in 2023, almost double the figure in in 1990.
A record 4.1 million Americans will turn 65 this year, at an average rate of 11,200 a day.
‘Peak 65 is a historic moment,’ said Cyrus Bamji, chief strategy officer for the Alliance of Lifetime Income.
‘The tail end of the Baby Boomer generation is starting to turn 65, and unfortunately, most of them are flying into retirement unprotected, with a safety net full of holes.’
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