Winnebagos, Funeral Homes, and Cruise Ships: The Graying of Baby Boomers in the New Millennium.

• Author: Seninger, Steve

As the new millennium enters its infancy, a growing number of Americans will enter their retirement years. Although people in developing countries--where the majority of citizens are under age 35--populate most of the globe, the proportion of elderly residents in the United States is growing. And with the graying of our society comes images of retirees traveling in Winnebagos, spending their money on cruise ships, and pushing Social Security and Medicare programs to their financial limits.

Besides transforming our society, America's aging population will undoubtedly trigger economic changes. For example, what impact will the growing number of retirees have on the labor market? What will happen to retirement savings and wealth if the stock market experiences a major downturn? And what about government and political systems, the majority of which are headed by soon-to-retire Baby Boomers? And, finally, how will the increasing number of older Americans affect the health care industry?

The aging of Baby Boomers born between 1946 and 1964--a period of sustained high birth rates of more than 4 million per year--will have a major demographic impact in the 21st century, one felt in consumer spending and markets, Social Security, Medicare, taxes, employment, and the workforce.

The Wave

Boomers represent the peak of a demographic wave, sweeping across all sectors of the economy. The U.S. population currently comprises nearly 80 million people between ages 35 and 55, and it will still be at 79 million in 2010.

Montana's population wave is similar to that of the rest of the nation, though the state has strong numbers in younger age groups. Boomer demographics in Montana will directly impact the state's economy, with 264,000 boomers in 2000 and almost 277,000 in 2010 (allowing for net inmigration). In addition, the number of "young old," those age 65 to 75, will roughly double during the next 40 years. And the number of those age 85 and older will triple or more, depending on how medical improvements affect life expectancy. The boomer group combined with the over-65 group will represent nearly 44 percent of Montana's population over the next decade.

Consumers and Markets

The economic wealth and income clout of older Americans is enormous. The over-50 demographic segment accounts for more than $2 trillion in income, or more than 50 percent of discretionary spending power in the United States. This kind of clout has many implications, including:

* Marketing is pitched to mature or senior consumers as long as the image of silver-hued, active people who are "as young as you feel!" is depicted rather than the image of Grandpa or Grandma.

* Senior marketing is directed at both men and women. Boomer women are major consumers since they...