The first retirement home was first built in Sun City, Arizona in 1960. It promised “active new way of life”, with a golf course, a weekly “chow night” at the recreation centre and the occasional minstrel show put on by residents. The first occupant were a retired husband and his wife who had never worked outside the home. New developments hold fewer than 1,000 units and most have space for classrooms. Many have a motorbike clubhouse, and more than a quarter of buyers are single. “The whole idea of retirement is seen in a different light today,” says Ms Petroulakis.
Generally the human population is depicted by a pyramid. The base depicts the younger generation between 20-35 which forms the majority of the population. The tip of the pyramid depicts the older population which is smaller as shown in the figure.
Sarah Harper, director of the Oxford Institute of Population Ageing, says “the vast majority of people in the world will make it to age 70”, once considered extraordinary old age. The shape of the classic “population pyramid” has changed.
Today the younger generation is very conscious about their health. There are good health facilities that are available today. The average life span of the individual has increased from 60-65 to 70-75 years. While it is a good that life span of the individual has increased, there are is another trend that is going to have big implications on the economy.
The younger generation today do not have have more than 1 child. Some do not opt for a child, they are more interested in enjoying the life that they have. In addition to this the fertility rates in developed countries, and in many emerging economies such as South Korea, have fallen so far that they face a shortage of younger workers and consumers. Both these trends are going to invert the pyramid by 2050. In 2050, the human population pyramid will be invented pyramid. A sample projected population trend of Japan is shown.
“We’ve gone from a pyramid to a skyscraper,” Professor Harper says. “It will change the 21st century in a way we never could have imagined.”
That scenario has huge implications for government, and business.
Implication for Government
- Bigger Budgets for Pensions
- Increased budget for Health care – If no proper health care if given then the graph will look like a thin line with no work force across age limits. This will eventually impact the nations growth.
- Higher possibility of retirement age increasing
Look at those middle-aged men in Lycra. They are riding bicycles that only a professional can afford. The way we think about ageing is changing. These new consumers are members of the fast-growing older demographic who are healthier and wealthier not only when compared with earlier generations of the same age. The high-priced consumer goods – cars, watches, sports equipment – is dominated by older adults. Usually the spending power will be greater during 18 to 39-year olds and the market targets this age group. In the future the target range will increases. A 70-year-old could be somebody who goes to the office every day.” He would need the same iems that an younger generation requires. The way goods and services are marketed to older adults with deeper pockets will also changing. Mr Holtzman says this inverted pyramid “In the private sector, it’s called ‘an opportunity’.
Major Beneficiaries in the trend change
- Property developers
- Car makers
- Technology developers
- Financial services firms
- Pharmaceutical industry
But because people are entering retirement in good health – and with far greater wealth than earlier generations – they are spending time and money in different ways to their parents. Stephen Bond, co-director of the Demographic Users’ Group of large UK retailers, is a former executive at Marks and Spencer. He says older adults are no longer willing to adopt traditional “old people’s” attire and are keen to dress fashionably.
He recalls a market research exercise with a panel of older, female shoppers, one of whom attended the first Glastonbury rock festival. “She was waxing eloquent about it,” Mr Bond says. “In her mind, she is still that same person. When you see yourself through your own eyes, you see the same person you always did.”