From Home Furnishing Business
The Aging Consumer
On average, 10,000 people turn 65 years old each day. By 2030, one in five people will be 65 and over. Now facing decisions on where and how to spend the aging years, a majority of early Baby Boomers want to stay in their homes. This could become a necessity as the growth in numbers outpaces the traditional resources available to seniors.
Due to the approaching influx into the 65-and-over age group, an entire specialized construction industry has evolved to modify and retrofit homes for safety and convenience. The term, aging in place, has become widespread, spawning an interior design industry focused entirely on remodel projects geared to the aging—including furniture, flooring and lighting, while maintaining the beauty of the home.
By the Numbers
Senior homeowners remain key to the U.S. economy with Baby Boomers now entering their retirement years.
In the last 10 years, the population in the 65-and-over group has grown almost 30 percent and many have adopted the aging in place philosophy.
As shown in Table A, the number of householders age 65 and over is expected to grow to 56 million in 2020. From 2015 to 2030, this age group should increase by more than 52 percent—jumping to 73 million. At a projected 84 million by 2050, 20 percent of the population will be 65 and over.
The Center for Disease Control defines aging in place as “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.”
According to a 2014 survey by the American Association of Retired Persons (AARP) depicted in Table B, nearly 90 percent of seniors want to stay in their own homes as they age.
When asked if they preferred to stay in their homes even while needing day-to-day assistance or ongoing healthcare during retirement, 82 percent said yes. Only 9 percent actually prefer to move to a retirement or assisted living community, and 4 percent opt for moving to a relative’s home.
Results of the U.S. Aging Survey by the National Council on Aging show 58 percent of householders over the age of 60 have not changed residences in more than 20 years. Seventy-five percent say they intend to live in their current home for the rest of their lives and many have already began home improvements. Thirty-four percent have made bathroom upgrades, and another 28 percent have improved lighting. Seniors are methodically using their money to ensure independence and safety in their retirement years.
Seniors today are more active and affluent than any generation before them. Of the 46 million Baby Boomers, about 25 percent of them have annual incomes of $100,000 or more and a net worth of $400,000 or more. Currently, households over 65 have an average net worth almost double that of younger households.
According to The Demand Institute, 40 percent of households in the U.S. are headed by someone between the ages of 50 and 69, and this group holds 54 percent of all household wealth. As this group ages into retirement, more money will go toward the home improvement industry.
Home Improvement Stats
Both the National Association of Home Builders (NAHB) and the Joint Center for Housing Statistics of Harvard University (JCHS) have done extensive research that show a rapidly increasing percentage of the remodeling industry is from seniors already or planning to age in place. The NAHB predicts the aging in place remodeling market to be between $20 billion and $25 billion—about 10 percent of the $214 billion home improvement industry.
As shown in Table D, the JCHS has data from 2003 to 2013 depicting a current shift in households over 55 accounting for an increasing amount of home improvement expenditures. The 65-plus age group jumped 67.1 percent in home improvement expenditures over 10 years, while ages 55 to 64 grew by 33.9 percent—together accounting for over 47 percent of total home improvement expenditures in 2013. Ages 35 to 44 and 45 to 54, traditionally the bread and butter of the remodeling industry, collectively dropped their share of total home improvement expenditures by 37.8 percent from 2003 to 2013 partly due to recessionary factors and partly due to their lower population numbers.
Furniture Industry Impact
As Baby Boomers pour into their senior years, design and remodeling firms specializing in aging in place are proliferating to meet the demands that seniors require to stay in their homes and maintain independence. More importantly for the furniture industry, interior design firms are being born from this remodeling industry to focus on interior design, including furniture, flooring, and lighting. A new interior certification for aging in place is now available. The goal of these firms is to spec furniture for both safety and maintain the consumer’s need for fashionable design. A review of aging in place design trends shows more specific product focus.
Having spent decades watching the evolution of advertising on television, seniors can be a tough crowd when it comes to marketing. They have spent most of a lifetime buying and replacing furniture. For the aging in place consumer, marketing by furniture companies and retailers must obviously be geared to both safety and style. But while these seniors are interested in products that enhance their lives, research shows they are not interested in being singled out in elderly advertising but rather want to be approached as experienced and savvy consumers.