Between now and 2050, the United States will see a significant increase in its older population segment. This should come as no surprise, as the baby boomer generation hits retirement age and life expectancy ticks up due to advances in healthcare and quality of life.
According to the U.S. Census Bureau, “The aging of the population will have wide-ranging implications for the country … it will also affect families, businesses and health care providers.”
The Census Bureau projects that the percentage of population over the age of 65 will go from 13.7% in 2012 to 21% in 2050. This represents an estimated increase of 30 million people.
The situation in Europe is similar. The Economic Policy Committee and the European Commission estimated that the elderly population in Europe will increase by 58 million between the years 2005 and 2050. According to the Brookings Institution, the European median age is expected to rise from 37.7 to 52.3 over the same time period.
With expectations of such a meaningful upheaval in the demographics of the developed world, certainly many sectors and individual companies would be affected. Not surprising, the majority of companies currently discussing the trend and impact on their business are in the healthcare sector.
Real Estate Investment Trust (REIT)
HTA is a medical office building REIT with 15.4 million square feet in gross leasable area, and $3.6 billion in investments in medical office buildings.
AEL provides fixed indexed annuity products to older individuals who are seeking a guaranteed lifetime income. Their business model is focused upon the needs of an aging population’s retirement savings and income, and that longevity risk (the risk of outliving your savings) favors the lifetime guarantee.
Five Star is one of the largest publicly traded operators of senior housing in the U.S. The company operates 272 senior living communities, with nearly 32,000 units across the country.
I identified these companies and others by conducting a quick search on AlphaSense for “aging population,” and organizing the results by sector and relevance.