This document discusses AARP's interest in mapping and understanding the longevity economy. It notes that 100 million Americans over age 50 represent both challenges related to health care costs and financial insecurity, as well as opportunities for economic growth through new industries and markets that meet the needs of older consumers. The document outlines demographic trends showing massive growth in the older population and examines the 50+ population as consumers who spend over half of total consumer spending. It also discusses various strategies companies are using to engage the longevity market and highlights areas of expected future growth across industries.

1. AARP | THOUGHT LEADERSHIP OVERVIEW
Mapping the
Longevity Economy
Jody Holtzman
SVP Thought Leadership, AARP
@jholtzman
#LongevityEcon
#boomersummit
Prepared for the
2012 What’s Next Boomer Business Summit
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March 28th, 2012

2. AARP | THOUGHT LEADERSHIP
Context

3. Why AARP is interested in the
Longevity Economy
 Because achievement of AARP’s Vision,
Mission and social change goals is
dependent, in part, on the greatly expanded
effort and success of the business
community to meet the needs and wants of
people 50+
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4. Our Goal
 Begin a dialogue that helps establish a
common language and understanding about
the Longevity Economy, so as to stimulate
innovation in the market that contributes to
our mission and benefits the 50+
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5. Orientation is Key
 In Washington, addressing the needs of 100
million people is called an unaffordable cost
 For Entrepreneurs, addressing the needs of
100 million people is called an opportunity
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6. Why?
Because:
Demographic Wave +
Over Half of all Consumer Spending =
Big Markets and Big Investment Opportunities
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7. So What is the Definition of the
Longevity Economy?
• …. We’ll get to that…
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8. AARP | THOUGHT LEADERSHIP
The Longevity Wave

9. An additional 35+ million people over 50,
in just twenty years
US population over 50
140
120
A large number of
100 people living
longer
80
60
40
20
0
1940
1950
1960
1970
1980
1990
2000
2010
2020
2030
Source: US Census

10. Nearly 20% of the US Population will be over
65 by 2030
This growth will largely be driven by the aging of the Baby Boomers
70.0% Projected US Population by Age 20 - 64
59.9% Years
60.0% 57.4% 65+ Years
54.5% 54.2% 54.1%
50.0%
40.0% 72 Million people
65+ in 2030
30.0%
20.0% 20.2%
19.3%
20.0% 16.1%
13.0%
8.7 Million people
10.0% 85+ in 2030
3.5% 4.3%
1.9% 1.9% 2.3%
0.0%
2010 2020 2030 2040 2050
Source: US Census Bureau
10,000 people will turn 65 every day for the next 18 years!!

11. AARP | THOUGHT LEADERSHIP
The 50+ and Longevity

13. The Challenges of Longevity
 Financial insecurity: 30+% of Social Security recipients are totally
dependent on SS check. 65% mostly dependent on SS check
 Doubling of the cost of health care by 2020 – Driven by health care
inflation combined with growing older population (CBO)
 Rise in number of Americans with chronic diseases
 The cost of caring for chronic illness in the United States -- $1.5
trillion yearly, fully three-fourths of annual healthcare spending (Inst
of Medicine)
 Nine chronic health conditions "dominate: arthritis, cancer, chronic
pain, dementia, depression, type 2 diabetes, post-traumatic
disability, schizophrenia, and the loss of hearing and vision
 Growing number of people with Alzheimer’s
 Impending financial insecurity of the Baby Boomers with average
retirement savings of $50K
 Unpaid value of caregiving = over $400 billion and rising (PPI)
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15. The Upside of Longevity – Economic Growth,
Productivity Growth, and Prosperity
 New industries (eg aging in place technology, brain fitness)
 New markets (eg Wii in nursing homes)
 Productivity growth (BMW)
 Entrepreneurship/small business growth (2X that of 20-somethings)
 Market maximization (Design for All, eg iPad, BMW)
 Greater economic value from retaining
older workers and new businesses
 Slower draw-down and extending the life
of the Social Security Trust Fund Leveraging
 Greater opportunity for mentoring young older
workers and institutional knowledge transfer workers and
entrepreneurs
 Strengthening economic security of older
people
 Minimize coming labor shortage
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16. How Boomers See It
 It’s about Living Not Aging
 This is the Opportunity Generation. They see and seek it everywhere
 This generation has the desire to grow, learn, and discover. They have
a positive view about these extra years of life
 For a great future, they see the need to be open-minded, learn new
things, and embrace change
 They see life as a “Progression” and “Continuation” – not Reinvention
 It’s about planning for What’s Next
 Don’t categorize. Don’t label. In other words, don’t box them in

17. AARP | THOUGHT LEADERSHIP
The 50+ as Consumers

18. Baby Boomers (45-64) spent $2.5
Trillion in 2010
Total consumer spending and share of total by age group
Rank Age Range Consumer Spending Share
1. 45 – 54 Years $1,456BN 25.0%
2. 35 – 44 Years $1,217BN 20.9% 43.7%
3. 55 – 64 Years $1,089BN 18.7% 59.2%
4. 25 – 34 Years $938BN 16.1%
5. 65 + Years $903BN 15.5%
6. Under 25 Years $221BN 3.8%
2X the consumption of under 25-34 segment
Source: BLS 2010 Consumer Expenditure Survey
Boomers+ account for almost 60% of all spending

19. Average consumer spend peaks at 45-54, but aging
baby boomers are likely to continue spending past 65
Average Yearly Income and Consumer Spend (2010)
$80,000.00 Average
Baby Boomers Income After
Taxes
$ Per Consumer Unit
$60,000.00 Average
Consumer
Expenditures
$40,000.00
$20,000.00
$-
Under 25 Years- 34 Years - 44 Years - 54 Years - 64 Years -74 Years 75 Years
25 35 45 55 65 Over
Income 5-yr
-0.3% 1.9% 1.3% 1.3% 1.8% 2.0% 2.5%
CAGR
Exp. 5-yr CAGR -0.2% 0.7% 0.3% 0.7% 0.5% 1.4% 3.1%
Source: BLS 2010 Consumer Expenditure Survey
Income and Consumer expenditures are growing fastest among 65+
demographic

20. The dominance of traditional companies serving these product
markets makes them ripe for innovation – now, for the 50+
Percent of Total Category Spend
Baby
Boomers (45-
Under 25 Years
64 Years): 25 - 34 Years
Housing, Housekeeping, Furnishing 41.4%
35 - 44 Years
Transporation 43.6% 45 - 54 Years
55 - 64 Years
Food 42.3%
65+ Years
Personal Insurance and Pensions 50.4%
Healthcare 43.0%
Healthcare spending
Entertainement 44.5% increases significantly
after 65
Apparel 44.5%
Personal Care 42.4%
0% 20% 40% 60% 80% 100%
Source: BLS 2010 Consumer Expenditure Survey
Baby Boomers spend the most across all product categories

21. AARP | THOUGHT LEADERSHIP
Innovation & Strategy in
the Longevity Economy

22. Innovation is occurring across verticals and
company types
Established Institutional/
Industry Start-ups
Companies Non-Profits
Care Innovations ,GloCaps, Independa, Mayo Clinic HALE Center/
Healthcare (JV of Intel & GE Virtual Health, Extend Health Kaiser Permanente
Health), Philips
KB Homes
Housing
CBS RLTV,
Entertainment
BMW,
Transportation Google Autonomous Car
Silver Ride, Tesla, MIT Age Lab
Live Well Collaborative
CPG / Food Live Well Collaborative, Revolution Foods
(Univ of Cincinatti)
General Mills
Prudential, Ameriprise,
Financial Services Schwab, Fidelity
Prosper, Kiva MIT Age Lab
Road Scholar, Air BnB, Tripedia, Tripping
Travel Viking River Cruises
The Hartford, See Change Health
Insurance Genworth
KEY:
Significant Growing Focus Some Focus / Limited Focus
Activity Scattered

23. Companies Are Using Two Over-Arching
Strategies to Address
the Longevity Economy
 Target the 50+ market explicitly, with products and
services specifically designed for a segment or segments
in that market
 Maximize market opportunity by expanding into the 50+
market
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24. 5 Additional Strategies
 Universally designed products & services with universal
messaging
 Age-targeted design with age-targeted messaging
 Age-targeted design with universal messaging
 Universal design with age-targeted messaging
 Existing products modified for older consumers
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25. Applying Alternative Strategies
Approach Example Impact Applicability
• Nintendo Wii was • Sales to 65+ consumers
designed to appeal to a & nursing homes were
wide range of consumers significantly higher
rather than those with than expected due to
console gaming universal accessibility
experience
• Over half of purchases
Universally • Apple’s iPad targeted by Boomers and older
designed products
& services with GenX and GenY
universal • Fastest growth among • Entertainment
messaging • Facebook was designed women 55+ • Consumer Electronics
for college students • Housewares
Or • Over 50% of business • Consumer Goods & e-
incorporations by commerce sites
• Legalzoom has just 1/3 of Boomers • Social Networking
Finding the sales to Boomers • Travel
Longevity
• Discovered growing
Economy by
accident intergenerational play
• Wizard 101, a top 200 web by parents and
site designed for 7-12 year grandparents
olds
• Learned that largest
• Zulily was designed for buyer segment are
young mothers grandmothers

26. Applying Alternative Strategies continued…
Approach Example Impact Applicability
• Cover Girl Advanced
• Drove incremental sales
Radiance was designed to
for the Cover Girl brand
meet needs of older
without damaging
women
Age-targeted success with younger
• Healthcare
design with age- consumers
• Housing & Caregiving
targeted
• Glocaps designed as • Niche Consumer Goods
messaging • Value proposition was
wireless medication
recognized by caregivers
management system for
and pharmacists
seniors
• OXO Good Grips were • Performed well with all
designed for people with consumers and become
arthritic hands a standard design
• Better driving
• BMW cars are designed for experience for young • CPG
Age-targeted Boomer driver ergonomics drivers and maintained • Transportation
design with brand equity with GenX • Consumer electronics
universal • Entertainment
messaging • CBS targeted older viewers • Ended up with the most • Healthcare
and was attacked as the watched TV show (NCIS) • Housing & Caregiving
“old fogie” network with cross-generational
appeal (#1 in every
demographic segment),
and standout financial
results

27. Applying Alternative Strategies continued…
Approach Example Impact Applicability
• Drove sales with older
• General Mills increased consumers who already
marketing spend for had strong existing
cereals to older consumers connection to the
brand
• Financial Services
Universal design • Our Time online dating
• CPG Brands
with age-targeted service for Boomers • New entrant has faster
• Online platforms and e-
messaging growth than
commerce
• Ameriprise launched with incumbents eHarmony
Boomer-focused and Match.com
positioning and evolved to
“what’s next” • Successfully grew its
Boomer client base
• Improved customer
• Ferrari modified interior satisfaction with core • Consumer Goods
design of cars to improve consumer base without • Transportation
accessibility for 50+ alienating other age • Financial Services
Existing products consumers without cohorts • Housing
modified for older focusing marketing • CPG
consumers • Retained older riders • Every Web site, online
• Harley-Davidson designed and created a path to platform, and e-
the Trike for older Harley continued revenue commerce site
riders from loyal customer • Travel
segment

28. Although Healthcare is the largest area of innovation, unmet
needs, and therefore areas for growth and investment, exist
in all industries
Industry Growth Areas and Potential Investment Themes
• Cures for age-related illness and chronic diseases, especially 65+
• Products improving physical and mental vitality among consumers 50+
— E.g., fitness and nutrition, new pharmaceuticals, brain health, vision and hearing
Healthcare • Long-term care and connected living
• Non-FDA-approved consumer needs (eg, Aging in Place technology and
services)
• Innovations that facilitate ‘Aging in Place’
• Homebuilding based on ‘Better Living Design’ principles
Housing • Reimagined retirement communities that facilitate both independent living
and social connections
• Innovations that improve ease of use and accessibility and optimize the
driving-experience for 50+ consumers
Transportation • Transportation alternatives for individuals with limited mobility and for
those who are no longer able to drive
• Innovations creating the appearance of physical vitality
— E.g., Clothing, anti-aging personal care products, etc.
CPG / Food • Nutritionally advantaged foods for physical and mental vitality
• Ease-of-use and accessibility improvements for existing products

29. Areas of Expected Growth (continued)
Industry Growth Areas and Potential Investment Themes
• Universally designed consumer electronics that appeal across age groups
• Online platforms and social networks that appeal across age groups
• New programming for boomers and the 50+, both broadcast and online
Entertainment
• Products that allow individuals to create new experiences rather than
acquire new possessions
– E.g., live entertainment, adult classes, outdoor excursions
• Non-traditional travel packages for 50+ consumers that recognize Baby
Boomer preference for independent travel and more luxurious amenities
Travel • New online competitors to Expedia/Kayak that serve the 50+ who account
for 80% of leisure travel – multigenerational opportunities included
• Flexible financial planning for individuals who either want to or have to
keep working after the traditional retirement age
Financial
• Financial planning for individuals who plan to make big life changes (e.g.,
Services starting a business) after traditional retirement age
• Alternative savings vehicles
• Greater focus on products that allow aging parents to help ameliorate the
Insurance emotional and financial burden of old age care
— E.g., long-term care insurance

30. Areas of Expected Growth (continued)
Industry Growth Areas and Potential Investment Themes
• Alternatives to traditional work arrangements, eg, Mechanical Turk
Work &
• Products, services, platforms that reduce barriers to 50+
Entrepreneurship entrepreneurship

31. So What is the Longevity Economy?
Working definition - The Longevity Economy encompasses:
 Every dollar spent by consumers, companies, and governments, on
products, services and activities that enhance the quality of life as
people age
 The employment, personal income, corporate revenue and
profit, personal and corporate paid taxes, and other macro-economic
multiplier benefits associated with the value-chain and supply-chain of
development, launch, sale/delivery of products and services benefiting
the 50+
 The productivity increases that result from production and service
delivery changes that integrate the physical capabilities and behaviors
of workers 50+
 The value creation by new 50+ entrepreneurs
 The value creation enabled by new and modified products based on
design for all principles
 The tangible and intangible benefits of older skilled workers
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32. What else? A Work in Progress…
• Help us define what should be included in the
Longevity Economy
– What about ‘happiness’ expenditures (e.g.
financing education for grandchildren?)
– What should be excluded (e.g. xyz)
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33. Contribute to the definition…
• What do we have right? What do we
have wrong? Weigh in:
– Twitter: #LongevityEcon
– Wikipedia: Longevity Economy (coming
soon to a screen near you)
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