Retirement

The New Silver Tsunami

At about the time the first baby boomers were entering their 60s, the term “silver tsunami” started being used by demographers, economists, and others who were concerned about the shifts in human population. At that time, it was being used to warn us that there would be a huge number of people retiring in the coming decade and these new “seniors” would be a profound and disruptive force in several areas. A decade later, in 2020, the silver tsunami is looking a bit different and it’s shining a light on some less-expected, but equally sobering trends. 

The Old threats

Originally, most of the silver tsunami talk centered on four threats: 

1.    The health care system in the U.S. was ill-equipped to deal with so many people with multiple cancers and other chronic ailments; 

2.    The housing market would see a glut of homes being sold by down-sizing boomers, and home values would drop precipitously; 

3.    The workforce, heavily populated by boomers, would see huge upheaval and leave both government and industry without the critical institutional knowledge contributed by experienced employees, 

4.    We would be a shortage of senior housing available for those who were downsizing and clamoring to give up the responsibilities of home maintenance.

Certainly, the health care system has started to experience the pressure of increasing demand, and that is due to longevity more than any other factor.  People are living longer and trying to manage one or more health conditions. It was a legitimate concern ten years ago and it is an ever-increasing concern today.  Although the pandemic has eclipsed all other health news in the past year, I’m certain we will see a resurgence of these issues in the near future. 

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Predictions aside, the housing market did not collapse under the weight of Boomers wanting to downsize. If anything, the opposite has been true. Seventy-five percent of boomers own the homes they live in, most of which are paid off or have very small mortgages. Realizing that they can’t afford to move into a fancy retirement community (and many wouldn’t do it if they could), they have decided to stay in those large homes as long as they possibly can.  In fact, close to 80% of people over 60 in the U.S. intend to “age in place.” 

The workforce has seen upheaval, but thanks to the recession of 2008-2009, a much larger percentage of boomers have found it necessary to extend their working years. And thanks also to the anti-ageism movement, employers have become much more likely to think twice about firing an experienced employee in favor of a younger, less experienced one. 

As far as the senior housing industry goes, they have had their ups and downs over the past decade, but in light of recent trends it appears that the aging public will not face a shortage of housing units in private-pay active aging communities, assisted living, or continuing care LifePlan communities in the near future. 

The Current Tsunami

So, what is looking ominous today and in the near future? It comes down to the lack of community resources for housing low-income and impoverished older adults. One projection, based on a 2017 study of homelessness in three large American cities, is that the number of people over 65 who are homeless will triple in the next 10 years. The study concludes that this astronomical rise in senior homelessness is partially the result of what demographers call a “birth cohort effect.” 

The baby boomers are often thought of as a wealthy and privileged generation, especially for white men and women.  However, that wealth is distributed unequally. The older segment of the boomer generation, those born between 1946 and 1954, caught the tail-winds of the post-war prosperity. They were able to easily enter the labor market, buy starter homes and begin amassing assets as they built their lives. The later wave, those born between 1955 and 1964 faced some strong headwinds.  They experienced back-to-back recessions just as they were trying to get a toe-hold in their careers and in the economy.  The labor market was already crowded, interest rates were at their peak, and home prices were escalating. These factors were compounded for people of color. This downward pressure was especially devastating for young black men, who saw unemployment rates of almost 25% in 1983.

The birth cohort effect has persisted over time and many never overcame the downward pressure from that inauspicious start. Many of these unemployed or underemployed young people became the face of homelessness in the mid-1980s, and those later-born baby boomers have remained the dominant group among the homeless since that time. Now, a frightening number of them are reaching their mid-sixties with declining health, and little or no money in the bank. Quite a few have medical conditions that put them at a biological age considerably older than their chronological years. 

Homelessness is now apparent in every major metropolitan area in the U.S. and most smaller cities as well. It is concentrated in the warmer climates of California and Florida, but is not limited to those parts of the country. The states and the federal government have chosen to ignore this looming threat, repeatedly slashing social programs that offered some relief to these older adults, many of whom can no longer work for the money to keep themselves fed and sheltered. 

Where the early projections of what a “silver tsunami” would look like were based on cultural and economic trends, some of which would have had to reverse direction in order to happen, the silver tsunami of homelessness is already happening, wherever we look.  The combined shelter and healthcare costs will continue to double or triple, especially in our major cities (Boston, NYC, Los Angeles). 

Is There a Solution?

The only federally-subsidized housing for older adults is through two Department of Housing and Urban Development (HUD) programs: Section 8 Rental Housing Vouchers and HUD 202, which is financing for public low-income senior apartment buildings. Some communities are taking advantage of these programs to help house a small portion of their homeless as well, but there is not enough stock of these kinds of units to even serve those who are not technically homeless, let alone those on the street.

This frightening trend is not a problem that is going to magically reverse itself in a ‘good year.’ It will continue to grow until we solve it as a society or – one by one – these helpless, homeless older adults die on our streets. This silver tsunami is not a pretty picture and it’s happening every day across the country.

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