As we age, where will we want to live? And as importantly, how will we want to live? It’s a decision that faces many of us today, either directly for ourselves or indirectly for our elderly parents.
In a recent front-page Wall Street Journal article, Peter Grant drew attention to and rightfully addressed this question, as nearly 13 million older Americans face this decision today and as the massive wave of 72 million baby boomers born between 1946 and 1964 gradually approach the time where post-retirement lifestyle choices will once again need to be made.Many baby boomers will prefer to age at home, with technology helping to enable this choice. But many will also prefer to age in community with opportunities for companionship, friendship, engagement, involvement, socialization and easy-to-access meals, healthcare, assistance with day-to-day living activities, safety and security. Cognitive impairment, mobility limitations, multiple chronic conditions and functional restrictions may also cause older households to leave their homes for additional care.
Today there are an estimated 1.6 million units of seniors housing in the United States—which equates to roughly 18% of households over the age of 80. Our recent analysis suggests that by 2030, 2.5 million units will be needed if that penetration and utilization rate of 18% of households over age 80 remains steady in the coming years. For seniors housing operators, this suggests that hundreds of thousands of new units will be needed to satisfy this demand. Even if the utilization rate were to fall below today’s 18%, additional inventory will be needed.
It’s evident that the baby boomers have never acted like their parents and always pave a new way forward. And, it’s likely that new forms of living patterns will emerge. Many of America’s elders will remain in their family homes, many will live in traditional seniors living properties, some will live in an evolving form of seniors living housing that is still emerging, some will live in co-operative living arrangements similar to how they lived during the 1960s, some will live intergenerationally with younger individuals who can help defray costs or help with household chores and maintenance, and some will live in choice-based group homes with their friends like the Golden Girls sitcom. The truth is that the sheer size of this burgeoning cohort will support many living preferences—home or in community.
The ability for elderly baby boomers to remain at home and continue with support from family will be less likely than today as another recent NIC study showed that 48% of individuals age 75 and over will be divorced in 2029 compared with 39% today. Either due to widowhood or divorce, many will simply not have partners/spouses to care for them. Moreover, the sheer demographics of America are quickly changing the caregiver support ratio which will fall from seven adult children aged 45 to 64 to care for one parent over 80 years old today to four-to-one in 2030 and three-to-one in 2050. Additionally, fewer adult children will live in proximity to their parents.
Hence, the desire to live at home may not always be matched by the ability to do so. At the same time, the desire to live in a group setting may not always be matched by the financial ability to do so. As we consider the aging of our population, we need to think about what America’s elders can afford in terms of their care and housing choices. For example, NIC’s study on the Forgotten Middle, published in May 2019 in the public policy journal Health Affairs, showed that 46% of 75-plus middle-income households will not have sufficient financial resources to live in today’s senior housing.
With a spotlight now shining on the issues of choice, desire and affordability of care and housing options, we can collectively consider what public and private sector solutions exist today and what needs to be re-imagined, designed and created. It’s an opportunity for public/private partnerships, as well as for private sector solutions and innovative and creative public policies.