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Tuesday, July 8, 2014

The Booming Dynamics of Aging: Meeting the Challenge of the Emerging Senior Majority

The U.S. population is aging rapidly, led by baby boomers who will hit fifty this year. By 2056, for the first time in history, the United States’ population sixty-five and older will outnumber those eighteen and under. The ramifications will be significant.

Very soon seventy-eight million baby boomers will become the new “Senior Majority.” This demographic phenomenon presents significant challenges for our nation. It also represents tremendous opportunities for Certified Senior Advisors (CSAs).

A Global and National Phenomenon
Each day, ten thousand people turn sixty-five. These celebrations will continue daily for the next twenty years. By 2056, for the first time in history, the United States’ population sixty-five and older will outnumberthose eighteen and under.

Our older population is aging. The oldest-old (eighty years and older) is the fastest growing segment of our population. The eighty-five years and older population is expected to increase to 14.1 million in 2040, and by 2050, nineteen million. Is our country ready for this? In a word, no, and we are not alone.

This demographic phenomenon is not happening only in the United States. By mid-century, approximately 25 percent of the world’s population will be sixty and older. By 2050, nearly 17 percent of the global population will be sixty-five and older, twice what we have today.

Boomers: The Emerging Senior Majority
Born between 1946 and 1964, the first wave of American boomers began turning sixty-five in 2011. The youngest of this group will start turning fifty this year. By 2030, all of the boomers will have moved into the ranks of the older population. By 2060, the youngest baby boomers will be ninety-six years old.

Just as they have throughout their lives, boomers have a range of expectations that are having a dramatic effect on every aspect of life in America—from health care to long-term care to housing, finances, employment, business development, technology, communications, retirement and relaxation, and more.

What Does All This Mean for CSAs?
CSAs are in the right place at the right time to help the new senior majority.” With some strategic planning, CSAs can, and should, become the “go-to” experts in their communities for people looking for help and advice as they plan for their own or their loved ones’ later years.

 The role of CSAs is broad and includes: 
  • an understanding of future challenges created by a demographic shift never before experienced;
  • consideration of thoughtful, creative, and cost-effective solutions at the individual and business levels; 
  • uniquely defining and marketing skills to understand and best serve clients and community.
The issues that concern today and tomorrow’s older adults and their families are numerous and multifaceted. The challenges are not going to disappear. They will multiply and become more complex as boomers age. The work that CSAs do is vital and critical to the well-being of older adults. The boomer cohort and all the challenges that accompany them are opportunities for CSAs to use their skills. The services CSAs provide are extremely important, especially now.

How Do We Address Future Challenges? 
It has been nearly ten years since the White House Conference on Aging (WHCoA) of 2005. At that decennial event, policymakers and delegates addressed key issues on which our nation needed to focus for the next ten years, in order to be better prepared for a dynamic, new aging population. A key message from the WHCoA, “Don’t get caught off guard,” still applies today. For better or worse, many of the issues that were discussed then continue to be with us, some becoming more critical and time sensitive.

The challenges our country faces require tough decision making and innovative solutions. Take, for example, the convergence of aging baby boomers with the state of our economy: They have begun to draw on their savings, their pensions, their Social Security, and Medicare. Many have also continued to remain in the workforce. Entitlement programs will continue to be under great pressure. Our country is not ready for this.

Who will pay for our major federal entitlement programs? Medicare and Medicaid, long-term care, and Social Security will expand exponentially in the future.

By 2025, Medicare is projected to include more than seventy-three million beneficiaries (50 percent greater than today). Medicare’s unfunded liabilities are more than $38 trillion over the next seventy-five years.That translates to an amount over $325,000 owed by every household in the United States. Some believe that is a low estimate.

The 2013 Medicare Trustees report acknowledged that slower growth in health care cost has improved Medicare’s financial outlook, extending the trust fund to last until 2026, two years later than forecast in 2012. But the long-range projections do not support a positive outlook for seniors and taxpayers.

Today, more than sixty-one million people receive some form of Social Security benefits. By 2035, that number is projected to soar to ninety million, with an accompanying shortfall of $134 trillion over the next seventy-five years. If no changes are made in the Social Security retirement program, benefits will be about 30 percent less in 2033.

Federal entitlement programs were never meant to be the sole sources of financial security in retirement. Boomers have been called the largest, healthiest, and most affluent generation of all time. More than three-fourths of the nation’s wealth is currently owned by people fifty and older. Yet, they are not saving enough for their longer lives. For example: 
  • Twenty-five percent of boomers have no retirement savings; 
  • Half of American workers have less than $10,000 for retirement; 
  • Total savings and investments for 60 percent of American workers are less than $25,000.

Long-Term Care 
Most of us are unprepared for long-term care. At any given moment, any one of us—or a family member, friend, or neighbor—could need long-term care. The demand is expected to increase almost two fold by 2020.

Medicaid is a means-tested Federal/State program, and the primary provider of long-term care services for older adults. Costs continue to rise, and States are reviewing their programs to determine the best approaches for the future.

Many boomers are shocked to learn that the median cost of a private room in a nursing home in 2012 was $81,030, according to the 2012 Genworth Financial Cost of Care Survey. The median monthly cost of assisted living in 2012 was $3,300. These are staggering figures to many, especially those who have not planned ahead or saved enough to finance their own long-term care needs as they age.

Our present delivery system is fragmented and frustrating. If we were to take inventory of all the federal programs that are currently being used for any form of long-term care, whether institutional, homebased or community care, our list would look like amaze.

How do we get boomers to buy into the reality that they need to be more focused on their long-term care needs in the future? How do we ensure they are not “caught off guard?”

Aging in Place
Eighty percent of boomers say they want to remain in their homes and communities for as long as possible as they age.

We must develop a well-coordinated system to ensure that people who want and are able to age in place can do so successfully. If you develop a chronic health condition, like diabetes, arthritis, or Alzheimer’s disease, aging in place means more than just staying put. You need a place to live that fits your needs and abilities. If driving becomes more difficult, you may need to access a range of paid services, including caregivers, or use extra funds for home modifications that can extend the time you can live at home.

Americans of all ages value their ability to live independently. But without a plan for aging in place, it can be hard to stay in control of your life. Knowing your health risks and financial options can make a big difference in your ability to stay in a familiar place.

For most of our history, the family has been the major provider of care. In many cases, this support has allowed seniors to remain at home longer. One in four families (13 percent of the population) is involved in caregiving of family, neighbor, or friend, with some boomers caring for both children and parents. Most become caregivers because of a crisis, and the great majority of those caregivers are not prepared for what that entails.

About forty-two million Americans were unpaid caregivers who provided $450 billion worth of care to adult relatives and friends in 2009. This is care for which we as a nation would otherwise have had to pay. Caregivers need our support. At any point in time, anyone could become a caregiver. Would you be ready for this? Would you be able to advise your client about caregiving?

CSAs Leading the Way
CSAs should be considering how best to develop solutions and incorporate additional knowledge into their own business plans. CSAs should be ready for the senior majority to help them to not “get caught off guard” for challenges that may lie ahead. The questions CSAs should ask themselves are:
  • How can you become that go-to person in your community?
  • How do you earn—and keep—your clients’ faithand trust?
  • What sets you apart from other individuals who advise older adults?
How will seniors access information about services? Who will coordinate the needs of future “seasoned citizens?” CSAs might consider thinking of their business as a “hub” working with all the spokes. Consider your business becoming the go-to place, a fully integrated service that presents information and potential solutions for your clients and your communities.

Our challenges as a nation and as individuals need to be addressed sooner rather than later. All of us hope to remain active members of our families and communities as we age. With the proper tools and knowledge, CSAs can help build a positive future as leaders of the emerging “Senior Majority.” Don’t get caught off guard! After all, the future is us. •CSA

Dorcas R. Hardy, former Commissioner of Social Security, is the Principal of DRHardy & Associates, a government relations and public policy firm serving a diverse portfolio of clients in the health services, disability insurance, financial and association industries. She serves on the board of the new Home Care Standards Bureau and chairs the National Advisory Board of Early Bird Alert, Inc., a healthcare communications technology firm. She also serves on the Board of Trustees of Wright Investors Service Mutual Funds, and is appointed by the Speaker of the U.S. House of Representatives to the Social Security Advisory Board, and by the Governor of Virginia to the Board of Visitors of the University of Mary Washington. Contact her at 540-972-1552.

The Booming Dynamics of Aging: Meeting the Challenge of the Emerging Senior Majority was recently published in the Spring 2014 edition of the CSA Journal.

Blog posting provided by Society of Certified Senior Advisors