Older residents of the state of California, meaning those aged 65 or older, made up roughly 14% of the state’s population in 2020. That figure is poised to rise to 22% by 2040, marking a 59% increase, while the number of residents between the ages of 20-64 is projected to remain largely unchanged during that period.
However, the range of people between the ages of 0 and 17 will also drop by 24% during that time, resulting “in an old-age dependency ratio of 38 older adults per 100 working-age adults, up from 24 in 2020” according to a recent report by the Public Policy Institute of California. The findings were first reported by McKnight’s Senior Living.
This has a raft of wide-ranging implications for the economy of the richest, most populous state in the Union, the report said, corroborating the “silver tsunami” — or a coming increase in the aging population — and its potential impacts on the state’s labor and housing posture.
Given the projected increases in the number of older adults living there, workforce participation by the cohort is expected to increase commensurately. The increase will be particularly striking for low-income older adults, made up by nearly one-quarter (22%) of older adults with incomes less than twice the poverty level.
“Labor force participation is projected to increase for adults aged 65 to 74, especially those who are less-educated—possibly out of financial necessity,” the report’s accompanying policy brief said.
There are also strong, ongoing preferences for older adults who seek to age in place in their own homes. While institutional care and living facilities are on the rise in California, they pale in comparison to the number of adults seeking to remain in their existing homes.
“Despite a 51% increase in older adults in institutional settings, only 3% of the total older population is expected to live in such facilities,” the brief explained. “The vast majority are expected to remain in their own homes. About six in ten older adults will be living with spouses, and the share living alone will decrease from 22% to 18%.”
But one in three adults over the age of 80 “will have difficulties staying in their homes without assistance, and one in five will experience self-care limitations,” the report projects. This will also contribute to increased demand for long-term care services, but much of the state’s older population is likely to experience challenges in covering the financial costs for such care.
But the report was not without its bright spots, particularly in terms of strides the state has made with longevity of its older residents.
“The good news is that by some measures — such as living longer and living in their own homes — older Californians in the future will be better off than today’s seniors,” the report said. “However, the rapid increase in the older population — especially the oldest old — means that the number of older adults needing help of some sort will grow dramatically.”
This will lead to an “economic bifurcation” of the state’s growing older population, signified by those who own their homes and have “adequate” retirement savings versus those who rent, and are more vulnerable to challenges including affording a place to live.
These evolving realities will necessitate “policymakers, health care providers, and community organizations to prepare for a future where older adults represent a larger and increasingly diverse segment of California’s population,” the report said.
“Moreover, the significant growth in the older population, particularly the oldest old, will necessitate careful planning to meet the increased demand for age-related services and support, since older ages are highly correlated with illness and disability.”
California is far from the only state that will need to have such conversations.
Policymakers in South Florida late last year convened to determine the full impact of the “silver tsunami” on its social and economic future, while local officials in South Carolina recently described a need for the state to prepare for an influx of older residents as the area becomes an increasingly attractive retirement destination.
