There is a constant discussion within the senior housing/senior living industry about the impact Baby Boomers will have on the industry. Their numbers (boomers) are huge (hence the name, “boomers”).
The Baby Boom generation name is reflective of the post-WWII period of 1946 to 1964. During this period, families grew rapidly having two or more children. Conversely, the period encapsulating the Great Depression and World War II is known as the greatest generation but also, the Baby Bust generation. Families had far fewer children during this period as economic malaise (depression) and war, cut into the desire or ability, to raise a family via having two or more kids.
During the Baby Boom period, the census bureau estimates that 76.4 million people fall into this generation. Today, about 64 million remain (the others deceased), accounting for 20% of the total population (332 million). The youngest boomers are not quite 60 and the oldest, in their mid-70s. Per the Census Bureau, there should be just over 61 million boomers alive in 2019 when all of this generation, reach an attained age of 65 and older.
As is typical with any age cohort or generational group, the distribution of ages is far from homogenic. In other words, the group birth rate accelerated at certain times and then fell off at others. In the case of boomers, the highest rate of birth was right after WW II thus, of the group known as boomers, the older members are in greater number than the younger members. This has a profound impact on senior housing/senior living. The red line in the graph below represents boomers.
The oldest boomers, the cohort most plentiful, is reaching that senior living window. They are now in their early to mid 70s and thinking about the final destination for their lives is front-and-center. Some will have experienced some health challenges so keeping up the primary residence may not be as easy as before. In fact, boomers are more lifestyle disease afflicted than prior generations.
With respect to purchasing power, boomers are certainly OK. The question that is looming present is mostly about the value of retiree estates current, given the up and down, recession maybe, rising interest rates, falling equity markets trends at play. For the oldest boomers, this may be a bit of a concern. For the youngest boomers, their outlook is likely brighter as what economically goes down, does go back up (or historically has).
In 2023, of the total personal wealth in the U.S., 53% was held by boomers. This shapes their feelings and desires about how they age and what they want as part of retirement and ultimately, senior housing. So, without further complication, below is what boomers want in terms of care, retirement, and ultimately, senior housing.
- Active adult, lifestyle housing is preferred second to their existing home. Given a choice, their primary residence today is where they would ideally remain.
- Boomers are not as location fixed as prior generations so independent residence does not mean necessarily, a family home – where the kids were raised.
- The largest desire is to remain independent in an environment where a full kitchen, laundry room with in-unit laundry, living rooms, windows with natural light, and additional storage were priorities.
- Most boomers desire security and exterior maintenance as options available to them, either for a time when they cannot perform maintenance tasks or when they choose not to, to accommodate other interests (travel, hobbies, etc.).
- In terms of care, the desire among boomers is to receive the maximum amount of care required, at home. They desire home care options, in-home acute care (hospital at home), and even maintenance care (ADL support) to be available at home. Growing technology is making this more likely, but labor challenges are making the reality of service delivery, difficult.
- Activity and health lifestyle options are important for boomers, particularly for younger boomers.
For Life Plan/CCRC sponsors, the shifting demands are suggestive that the congregate living, all things on one campus options is eroding. What this likely means is that the next market shift for senior living is a bifurcation – active lifestyle first, care location second. In other words, the CCRC model will have viability but primarily for older seniors (80 plus) and for those that skipped the lifestyle phase. This group will also have immediate health and psychological support needs, requiring care and support on entry.
This bifurcating trend is frankly, not all that new. In my immediate experience in many CCRC/Life Plan organizations, the average age on entry trend has been increasing (older) and the health status on admission, less independent. Stays at the Independent level have been shortening while chronicity and disability at the Independent Living level has risen (across the cohort). For organizations/sponsors, this presents a confounding challenge.
- Residents wish to remain in their independent living unit.
- Resident health declines and their need for services increase. Over time, the increased dependence within the community becomes visible, illustrative of the population’s change in health status.
- A visibly older, more frail population, stages the community as “old”, making rebranding or repositioning to more independent, active seniors, difficult.
Some additional reading is below.
How Operators Are Shifting the Senior Living Paradigm for the Baby Boomers
New Report Sheds Light on Baby Boomers’ Desired Senior Living Services, Amenities