The Baby Boomer Buildout
It's a fact that the “Baby Boomer” generation helped the United States grow to become the world’s largest economy, as we built hospitals to birth them, schools to educate them, and suburbs to house them. Clearly, this demographic group continues to profoundly impact nearly every aspect of our country.
Today, we're faced with a cresting demographic wave of Americans who will soon need care as they age and in greater numbers than ever before. Those who understand the trend are already addressing this scenario, but if you’re not paying attention, you're missing a building boom underway around the nation to address one simple and easy-to-understand reality…..The Baby Boomers are getting older!!
If you take a short drive in any direction from where you live, you'll find numerous new "senior living" facilities opening or under construction, with even more in the planning stages. Here's a small sampling of the new facilities recently built or being built near me.....
Given their location, these facilities will attract sophisticated residents, with high standards and high expectations. In other words, these facilities will not look like “institutional” settings. How many new senior living centers do you pass every day? How many more are being planned where you live? What does this mean for you and why should it matter?
Pragmatically, it means regardless of your advisory role, it’s time to begin addressing topics you've likely ignored for your (aging) clients and recognize that:
- Boomers are very concerned about Healthcare In Retirement
- The majority will need Long-Term Care during retirement, so these facilities are reminders.
- Dealing with their own parents, they’re beginning to understand how little Medicare covers for Long-Term Care and why Medicaid isn't an option for those with significant assets.
- 20% of those who need care will require it for more than five years.
The information below helps paint an even more detailed picture of the future of Healthcare In Retirement. Let's start with a Kaiser Family Foundation statistic which indicates that 69% of all nursing home facilities in the United States are “For Profit” centers. Then, intertwine that statistic with the occupancy rates in various states (data below) accounting for the growth in the new number of new facilities being built or developed around the country.
This confluence of significant factors – based on simple economic principles – supports only two conclusions:
1) These new, desirable "high-end" facilities will cater to those with the ability to pay for their care by either "self-funding” with their own assets or using a Long-Term Care Plan.
2) There should be no expectation that “Medicaid Beds” will be available at an artificially low government reimbursement rate.
When advisors take an honest look at the future of Healthcare In Retirement, they will see one of two things: a big problem or an even bigger opportunity.
While you don’t necessarily need to be an expert on Healthcare In Retirement or Long-Term Care planning, it's pretty clear that you'll need to have those resources available to address your client’s needs and concerns. In any event, it’s time to consider the ramifications of The Baby Boomer Buildout!!
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