“Today’s program looks at aging and spending. Mike, it is a fact that we are an aging society. The percentage of people who are 65 and over will almost double in the next 50 years. How will this affect spending in the economy, particularly on different types of products and services?”
“When I give talks around the state this is one of the points that I emphasize most: that we are an aging society. And I further say that aging is going to affect every single industry and every single company, every single economic sector in the state and the nation because older people spend differently than younger people.”
“One reason being, retirees especially (and people who age generally retire), they have less overall money to spend, number one. Number two though, they spend that in different ways. For example, the households who are 65 and older spend 49 percent more on health care than those under age 65. Now that makes sense. So this means that as we’re an aging society, obviously the health care industry is going to continue to boom.”
“But that means those older households are spending less on everything else. For example, data shows those over age 65 spend between 10 percent and 25 percent less on food at home, on entertainment, utilities, home furnishings and housing, and they spend between 25 percent and 50 percent less on transportation, food that we eat in restaurants and on clothing.”
“So the bottom line here is that we’re going to see a big shakeup over the next several decades in how people in our society spend money because of that growing cohort of those over age 65.”
Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook, and public policy.