Financial Strategies

Aging of American populace will have impact on economy


We are getting older. This is a fact of life and a world phenomenon. The question for the economy is whether this is a curse or an opportunity.

Investors, homeowners and consumers will all be impacted one way or another by the aging population. This in turn affects the economy and how businesses adapt to the changing demographics.

Most developed nations are facing the economic challenges of an expanding number of citizens over the age of 65. Populations are becoming older on all continents and Japan leads the world with the highest percentage of their people, 30 percent, over age 65. It is expected that by 2050, more than 60 countries will have reached that level. ¹

Investors may worry about what happens to the stock market when the number of retirees continues to increase. This can put pressure on pension funds and Social Security. Most fixed income sources have little or no cost of living increases. This may cause retirees to spend down their assets to create income and support long lives and potential elder care costs.

Homeowners have already been affected by the low inventory of single-story or community housing that provides active living as well as potential care services. Clients have discovered that it is often more expensive to downsize. If you are forced to stay put in your two-story house and bring in help, the supply and demand once again drives up the price of care providers available to meet your needs.

This is definitely an age group that is supporting the economy as they pay for more goods and services needed to provide for an aging population. Investors and companies can capitalize on new inventions designed to keep you young, active and healthy. As you age, more services are needed from house painting to lawn services and eventually elder care. It will be fascinating to watch what new innovations will be available on anything from self-driving cars to same-day dentures.

There is an opportunity for products that allow you to age in place, such as stair climbers, walk-in tubs and meal delivery. This is in addition to health care facilities and retirement communities that are popping up in every zip code.

Consumers demand services and products, which in turn impacts how businesses adapt to compete in the areas needed by the current population. We watched the baby boomers impact products and business on everything from Gerber baby food to McDonald’s restaurants as they approached their teenage years. Next it was minivans and mini-mansions. What will this demographic bubble demand in retirement?

We are already seeing more crossover vehicle sales for easy access after that hip or knee replacement. The travel industry is pouring big dollars into cruise and riverboat advertising as more people retire and have time to go places. Stores and restaurants offer organic, gluten-free and non-processed foods for those choosing a healthy diet, perhaps in hopes of staving off the aging process. Technology has come to the rescue for home security, texting and typing by voice and tremendous health care advances. You no longer have to go to a sleep study clinic for apnea or even go to the doctor to have your heart monitored. Many health-care needs can be handled remotely through computerized monitoring devices.

While many investors may think aging is bad for an economy, it appears that the baby boom generation that grew up with technology and the stock market will continue to surprise us with new advances and financial opportunities.

Most analysts agree there may be opportunity in companies that can invent and deliver products and services to meet the growing needs of people potentially spending 40 years in retirement.

1. United Nations: The World’s Ageing Population (English Online). US Census Bureau

Patricia Kummer has been a Certified Financial Planner for 31 years and is president of Kummer Financial Strategies LLC, an SEC-registered investment adviser with its physical place of business in the State of Colorado. Registration of an investment adviser does not imply a certain level of skill or training. Please visit for more information or refer to the Investment Adviser Public Disclosure website ( Any material discussed is meant for informational purposes only and not a substitute for individual advice. Securities offered through MSEC LLC, Member FINRA & SIPC, 5700 W. 112th St., Suite 500, Overland Park, KS 66211.

Patricia Kummer


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