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Retirement Planning > Social Security

5 Critical Issues That Will Make or Break an Aging America

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Ken Dychtwald, chief executive of Age Wave, wants to know: “Will the aging of America be a triumph or tragedy?”

When the U.S. Constitution was crafted, the average life expectancy in the United States was only 36 years, and the median age in America was 16.

Turn the clock to today, and roughly 10,000 baby boomers turn 70 every day.

“During the time of our founding fathers, there was no anticipation of an ‘age wave.’ None,” Dychtwald said during a press briefing Thursday afternoon. “In this regard, we are living in truly unchartered territory, and longevity is humanity’s new frontier.”

Already, 42% of the federal budget is spent on Medicare and Social Security. According to the Congressional Budget Office, this will exceed 50% by 2030.

As Dychtwald sees it, the U.S. is vastly unprepared for this coming “age wave.”

“This demographic transformation will create new lifestyle, social contribution, and marketplace opportunities as well as potentially devastating medical, fiscal and intergenerational crises. Are we prepared? No,” he explained. “Are the [presidential] candidates addressing this ‘age wave’ and offering innovative solutions? No. Has the political media of all persuasions been covering this issue and all its facets in proportion to its social, political and economic importance? No.”

Here are five critical issues that Dychtwald believes need to be addressed in order for America’s “newfound longevity” to be a “triumph rather than a tragedy”:

Issue #1: How old is “old”?

Issue #1: How old is “old”?

The U.S. economy is stuck on 19th century notions of longevity and old age, according to Dychtwald.

“When Social Security began, the average American could expect to live only 62 years, and there were 42 workers paying for each “aged” recipient,” Dychtwald said. “Today life expectancy is approaching 79 and steadily rising, and due to decades of declining fertility, there are fewer than three workers to pay for each recipient.”

But, Dychtwald asks, is 65 – or even 67 — the right marker of old age?

According to the U.S. Census Bureau, the number of Americans age 65 or older, the fastest growing segment of the population, will jump from 46 million in 2015 to 88 million in 2050.

“As our demography continues to tilt older, the economic impact of these numbers on working Americans will be massive,” Dychtwald said.

Issue #2: The diseases of aging could be the financial and emotional sinkhole into which the 21st century falls. 

Issue #2: The diseases of aging could be the financial and emotional sinkhole into which the 21st century falls.

“Until recently, most people died swiftly and relatively young of infectious diseases, accidents, or in childbirth,” Dychtwald said. “As a result of modern medical advances and public health infrastructure, we’ve managed to prolong the lifespan, but we have done far too little to extend the healthspan — as pandemics of heart disease, cancer, stroke, Alzheimer’s and diabetes are running rampant.”

According to data from Us Against Alzheimer’s, Alzheimer’s and related forms of dementia now afflict almost one in two people over 85.

The Alzheimer’s Association predicts that the number of Americans with Alzheimer’s or a related dementia is anticipated to grow from more than 5 million today to more than 15 million in 2050, with its cumulative costs soaring to $20 trillion by 2050.

Issue # 3: Averting a new era of mass elder poverty.

Issue # 3: Averting a new era of mass elder poverty.

According to the Government Accountability Office, 52% of all households near retirement (headed by someone age 55 or older) have no retirement savings, and 51% of the U.S. population have no pensions beyond Social Security.

Americans only save 5% of their disposable personal income each year, according to U.S. Bureau of Economic Analysis 2016 data, half of wthe savings rate a generation ago.

“We could be heading to a future in which tens of millions of impoverished aging boomers will place crushing burdens on the U.S. economy and on the generations forced to support them,” Dychtwald said.

Dychtwald also suggests that financial literacy should be fostered among the young in order to prevent future generations of poor older adults.

“For example, 37 states require providing sex education to high school students by law, while only 17 states require financial education,” he said.

Issue # 4: Ending ageism. 

Issue # 4: Ending ageism.

“In Colonial times, elders were respected and honored for their wisdom and perspective,” Dychtwald said. Today, the U.S. has a “youth-focused society.”

“[M]any people of all ages are gerontophobic — uncomfortable both with older adults and their own aging process,” Dychtwald said.

Many institutions — from urban planning, to education, to technology, to hiring practices, to housing — are both “youth-centric and ageist (perhaps unintentionally),” Dychtwald said.

Dychtwald points to data from the Joint Center for Housing Studies at Harvard University that finds that less than 2% of our housing stock is built to be safe and accessible for elders – which can often result in the elderly falling.

According to the Centers for Disease Control, one-third of Americans age 65 or older fall each year, resulting in 2.5 million emergency room visits, 95% of hip fractures, and $34 billion of direct medical costs.

Issue # 5: The new purpose of maturity

Issue # 5: The new purpose of maturity

Today’s retirees are known to both contribute more dollars and volunteer time than any other age group. However, they’re also known to watch a lot of TV.

According to Nielsen’s 2015 Cross Platform Report, the 68 million retirees in the U.S. currently spend an average of 49 hours a week watching television.

“Ultimately, the problem may not be our growing legions of older adults, it may be our absence of imagination, creativity and leadership regarding what to do with all of this maturity and longevity,” Dychtwald said. “The unprecedented historical challenge [and] opportunity of the age wave is how we can unleash our greatest growing natural resources that are hiding in plain sight: experience, skills and wisdom.”

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