California’s Middle-Income Population Projections

Building upon the groundbreaking “Forgotten Middle” study and its subsequent update, NORC at the University of Chicago recalibrated a nationally representative forecast of the 2033 middle-market population to produce estimates reflective of future California residents. The analysis revealed several key findings about the potential unmet needs of California’s middle-income seniors, including:

• The middle-income senior population in California will increase to 1.6 million in 2033 (+60%). Notably, the number of middle-income seniors aged 85 and older in the state is expected to double, from 230,000 to 463,000.

While the middle-income senior population is expected to grow substantially in the next decade, only a portion will be able afford the projected cost of private-pay assisted living. With the annual out-of-pocket price point of assisted living and medical care in California at $75,000, even with housing equity, more than half (821,000) of middle-income seniors in California will likely not have the financial resources to afford them. Without housing equity, nearly 90% are projected to struggle with covering the cost of private assisted living over the next decade.

By reducing the potential price point of assisted living, the potential market size expands. If operators can reduce the price point of assisted living by $10,000, an additional 209,000 Californians – an increase of over 25% – would then have the resources available to afford that product.

• By 2033, 58 percent of California’s middle-income seniors will be unmarried, and 43 percent may not have children living within 10 miles.

Having spousal support enables many people to stay in their homes longer and means assets and financial resources remain pooled together. Having children nearby means an increased likelihood of being able to utilize family caregivers. But as people have fewer children – and those children are increasingly less likely to live nearby – this solution becomes harder to make a reality.
These demographic shifts result in fewer available caregivers, which we know as a national ratio falls from seven adult children (aged 45 to 64) to care for one parent over 80 years old to four-to-one in 2030 and three-to-one in 2050.

• One in five middle-income seniors in California will have cognitive impairments or high needs. A majority will have three or more chronic conditions and mobility limitations.

The study also found that most of California’s middle-income seniors are likely to develop multiple chronic conditions and mobility limitations in the next decade, making it challenging for them to live independently.

Additionally, researchers with NORC at the University of Chicago have created illustrative case studies that underscore and help provide examples of the impact these findings have for Californians. View the complete slide deck of findings, including methodology, key findings, case studies, and information on the “near dual” seniors cohort who are close to Medicaid eligibility.