The Aging Population and the Future, with Glen Hiemstra, Futurist.com

Georgia’s Aging Population: Georgia State University and the Andrew Young School Sep. 26, 2007

Listening to the Future

Discontinuous Change
The Georgia Story
Japan Story
Three Challenge Arenas
Livable Communities
Long term Care
Economic & Fiscal
Issues

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I am pleased to have been invited to speak today to this important conference on aging and public policy. I want to express my appreciation
to Georgia State University, the Andrew Young School, and particularly to Tom Wade for his assistance as we prepared for today. The fact
that the population is aging has been well known for years, even decades now, yet insufficient attention has been paid to preparing for that.
It was in 1990 that Ken Dychtwald wrote The Age Wave attempting to alert us to the tidal wave that could be seen over the horizon. In the
1990’s I could and did often ask policy makers, city councils for example, what they were doing to prepare for the age wave, and their
answer in general was, “Nothing. I guess they will all move to Florida or Arizona.” But now the wave is visible, and while there is still time
to get ready, there is not much time, and so the conversations we have today are important.

Today I would like to share a few thoughts with you about why aging is a discontinuous change, review a bit of the story in Georgia, think
about Japan as a bell-weather, and then discuss three challenging areas for public policy: livable communities, long term care, and
economic and fiscal issues, the three broad topics of today’s conference.

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© Glen Hiemstra


What Is Your Image Of Age Wave In Action
The Future?
MALE FEMALE

Millions of People
1190 Days until the first Boomer turns 65
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Let’s begin with this question: What is your image of the future? I mean it literally. When you think of the future, say in 2020 or 2025,
what do you see, what kinds of words and pictures come to mind? On the screen is a popular image that has been around a while,
and I am often asked, “what ever happened to the flying cars?” But let’s focus on the nature of the population with this comparison.

Suppose you were to walk down the streets of a city or town in Georgia today. On average, about how many people over the age of
65 should you see? The answer is around one in ten, as the over 65 population in Georgia is about 10%, a little younger than most of
the country where the average is closer to 12%. Now, time shift to 2025, and walk down the street. About one of every five people
you see will be over 65. In Georgia the forecast is about 17%, which is about what you would see in Florida today. In fact, if you want
to see Georgia in the future go walk around Florida today.

Let’s think about this as we watch the age wave in action. Classically, populations came in a pyramid shape, lots of young people at
the bottom, few old people at the top. This chart begins in 1950 and will play out till 2050 and then repeat. You can see that as we go
through the next decades, the pyramid becomes a rectangle, as more and more people live to be 65 and then much older, 75, 85, and
even older. As of today, we are 1190 days until the first baby boomer turns 65, on January 1, 2011. After that, each year that goes by
will see the day approaching when there as many people who are older as there are younger. When this many people in a population
become aged we know that…well we actually do not know much about what happens, because it has never happened before at this
scale. Internationally, nationally, and locally we are embarking on a grand social experiment and the experimental question is how
shall we organize everything when so many are over 65? Those of us in the room today are both the experimenters, and, largely, the
subject of the experiment. In this sense, the age wave, though we have seen it coming for some time, represents a discontinuous
change with history – we are going to create something new.

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Generations 2025
Life Expectancy at Birth in the United States
-45
25
w
-79 no
90
61 s…
l
nia
w
80
no en
s… ll
70
Mi
r
me
oo
60
B
50
Years 40

ls…
30
na
io
dit
20

ra 80+
T
10
w
no Post
0
Generation X
Millennial
1750 1900 1950 2000 2005 2005
…now 45-60
…now 1-19
Men Women
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Another way of thinking about the age wave is to look at average life expectancy in the United States. Go back to the turn of the last
century. How long, on average, did people live? The answer is age 47. Some people lived to be 65 and much older, but they were
relatively rare. In fact, if you ever visit a cemetery with a section from a century ago, wander around and you will be amazed at how
many people died, sure enough, about the age of 45-50. Those days are gone. Now, due to better sanitation, health care, nutrition,
and so on we live in the opposite world, where is common to live to be over 65. In fact of all the people who ever lived to be 65, two
thirds of them are alive today. We can see on the screen that today a man can expect to live to be nearly 80 and a woman over 80
and our longevity keeps increasing about five years every two decades. If the hoped for advances in genomic medicine occur, we
could see an acceleration of even those dramatic increases in longevity. Notice when comparing generations, by the way, that the
age wave group will still be relatively young in 2025 by today’s standards, aged 61-79, while the elder-aged over 80 will be the fastest
growing group of all.

But the story is not just one of more people living longer. It is that tomorrow’s aged are different. They are baby boomers after all,
which means that by and large they will be better educated than previous generations of elders. Having delayed child rearing they
may have relatively young families, while also having surviving parents. They have been expected to be a healthier generation, but
the obesity epidemic of the past fifteen years raises questions about whether this will be true. They have been a more urban
generation, as the population has moved to cities. They have long been forecast to be the wealthiest aged generation ever, but there
are legitimate doubts about that. Being caught as care givers of two generations ahead and behind, and in an economic time when
fixed benefit pensions and retirement programs have been disappearing and wages flattening, we can ask how many of the coming
elders will really be positioned for long, work-free, leisure-based retirements. The answer may be fewer than we think. The next
elder generation is more adventuresome, interested in and used to global travel. They will be the most tech savvy generation yet,
having worked with information technology at least the back half of their lives.
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Over 65 in Georgia Young & Old in Georgia
1,668,000
30
Percent 19
1800000
and under
25
1600000
#19 in U.S.
1400000
20
852,000
1200000
Percent 65
1000000 15
and over
800000
#42 in U.S.
10
600000
400000
5
200000
0 0
2005 2025 1995 2025
8th fastest growing right now
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Let’s look at Georgia for a bit. Throughout the day we will be hearing and discussing Georgia’s aging issues in much more detail,
but here is a quick scan of some basic facts. While, as I mentioned, Georgia is a younger state than many, at the same time the
attractiveness of the state means that the over 65 population is not moving out, while others are moving in, making you the 8th
fastest growing state in terms of elders. Look at how dramatic the numbers really are. You are going to double your elder
population in the next twenty years, from over 800,000 to over 1.6 million. What will be needed for twice as many elders?

At the same time you will stay relatively young. A common comparison when thinking of public policy is what is known as the
dependency population, that is, the combination of the youth population and the elder population. In many, many states by the
time we get to 2025 elders will actually outnumber the youth. Here in Georgia the forecast of the Census bureau is that in 2025
the youth population 19 years of age and younger will decline from nearly 30% of the population to 26 percent, while elders 65 and
older will increase from as I said, about 10% to 17%. On the surface this looks like a good thing – lots of young people to balance
the elders. But, consider as we will later today the economic and fiscal implications of having large populations in the two groups
which tend to need the most public investment. When we look at it this way, we can begin to anticipate the struggles we will have
in meeting all our needs. Elder care versus schools. Tax breaks or not. And so on.

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27 Florida’s by 2025
States where at least 20% of
The population will be elderly

Mathews & Turnbull 2007
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Nationally, the 2025 picture is captured by this Census Bureau forecast that in 2025 there will be 27 Florida’s, where more than 20%
of the population is over 65. Notice that Georgia is one of the states with fewer than that, but remember that your elder population will
double or more, none the less.

As for whether the age wave population will be as wealthy as hoped, look at this illustration which I borrowed from the white paper in
your packets by John Matthews and Jeffry Turnbull, on “Housing the Aging Baby-Boomer Generation.” Now, most of your population
is in the urban counties, and this is true for the aging as well. But notice that throughout Georgia’s rural counties the percentage of the
aged in poverty in 2000 ranges as high as 25-40%. I expect that this pattern will not change as much as hoped – it is true that today’s
aged are in general better-off than previous generations, but the picture is uneven, and will be even more uneven in the future,
according to everything I can discern. If a significant proportion of tomorrow’s aged will in fact be economically needy, then many
assumptions we are making about housing, elder care, work, and so on will need to be challenged.

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Traveling…
Working…
Right now, 88% of 55
and older persons
drive their own cars
In 1950 half of 70-
year old men
57 % expect “to be
worked full time. driven” in the future
Today in Atlanta
13% expect to use
region 67% of
transit
people over 55 are
not working at all. 20% of those over 65
not longer drive in
U.S.
ARC 2006 Survey report

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Let’s consider the future of work versus retirement. It is not well known, but retirement as we think of it is actually an invention of the
20th Century, and even more significantly was really a phenomenon of jusy the back half of the 20th Century. Prior to the 20th Century
people slowed down, they worked less, but basically they worked until they dropped, which as we have seen was generally around
age 47. In the early years of the 20th Century this changed, as the final industrial revolution altered the nature of work, a flood of
immigration encouraged the movement of older workers out of the way, and people began living longer. People just like us, sitting
around tables just like these invented retirement. They made it up. It was defined carefully. You will work and earn income until you
reach a certain age. At that age you will cease income generating work, and live the remainder of your life in leisure, paid for by
accumulated savings and benefits. The benefits industry was invented. When we realized that lots of people did not have savings or
benefits, we invented Social Security. We all know the basic story. The bottom line is this: when retirement was made up, it was
assumed that 5-7 years of leisure as a reward for a lifetime of work made sense. Now, however, we live an average of 20 years after
age 65, and soon that will be 30 years. Now look at this ARC survey result from 2006. Today in Atlanta 67% of those over age 55,
not 65, are not working at all. Early retirement is the vogue. But will this make sense in the future. Do you want to be retired for 30 or
40 years? Can you accumulate sufficient savings and benefits in today’s economy to do that? We are going to re-invent the third
phase of life, just as people like us once invented retirement.
Let’s consider transportation needs. A couple of years ago I worked with the Federal Highway Transportation on long range planning.
We learned that in Boca Rotan, for example, there are something like 14 licensed drivers over the age of 100. The same ARC 2006
survey that I cited previously found that in the Atlanta region today 88% of those over 55 drive, but 57% expect to “be driven” in the
future, and 13% expect to use transit. This makes sense when you know that 20% of those over 65 in the U.S. today no longer drive
(though my mother, age 87, still does). Time shift again to 2025 and the years following that. If we have a purely auto-based society
and infrastructure, how is that going to work for the 20% of the population who is aged? What alternatives do we need? Even the
auto infrastructure needs retro-fitting, with larger signs, better lighting , and so on.

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Age Wave In Japan
Living…

As in rest of country
about 75% of
seniors plan to live
in their current
home “as long as
possible.”


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When we discuss livable communities later in the day, we will focus in part on housing. I consider this perhaps the biggest issue of all.
Where do you want to live, expect to live, as you age. Right now, as in most of the U.S. Georgia residents will tell you that they hope
to live in their current home “as long as possible.” But is this really the only option. We will explore that in just a bit.

So the age wave is a discontinuous change. And Georgia will be no exception. Where can we look for bell weathers, for examples of
what we might be dealing with. One such case is Japan, which we have looked at in some depth in my organization. Consider their
population pyramid, which again will play from 1950 to 2050. Notice that, because their birth rates are very low, they are shifting from
a triangle, to a rectangle, to actually an inverted pyramid, with many more old people than young people. Not only that, they are a
decade or so ahead of us. How are they coping?

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Japan’s Social Expenditures
Japan’s Elder Care
87% cared for in Family In the early 1970s, social expenditures
43% of elders’ primary caretakers were 6% of Japan’s national income. In
are daughters or daughters-in-law 1992 that portion was 18%. It’s
expected that in 2025, the portion will
7% of elders’ primary caretakers are
be 27%.
sons or sons-in-law
70% of the social-welfare budget goes
37% of elders’ primary caretakers
to programs for the aged, such as
are their spouses
pensions and medical services, with
13% have hired caretakers, other only 4% set aside for services for
kinds of help, or no caretaker. children, such as child benefits and
child-care services.
Source: Japanese Women Now
Sources: Statistical Handbook of Japan and AsiaTimes Online
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First, elder care in Japan is done by the family, some 87% cared for by daughters or daughters in law, sons or sons in law, or by
spouses. Only 13% have institutional help. Yet, despite this heavy reliance on family, Japan’s social expenditures have soared from
6% of their national income to 18% and is expected to hit 27% in 2025. Fully 70% of the social welfare budget now goes to programs
for the aged, such as state pensions and medical services.

Now, we are not necessarily going to follow that model, but they provide an interested future forecast. The most important point is
that reliance on family care, which I do not believe will approach 87% here, does not mean all that much less in social expenditures, at
least in Japan.

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© Glen Hiemstra


Japan’s Economic Solutions
Employers are keeping the elderly
working longer
Modify jobs to suit the elderly (e.g. more
lighting, fewer physical barriers)
What it Means Here
Utilize their knowledge and skills
Companies are creating products for the
elderly
Accessible cars
Care-bots
Families are expected to provide care

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On the issue of work versus retirement, Japan is also trying to cope and adjust. Employers are looking for ways to keep elder workers
longer, by modifying jobs, and attempting to use their accumulated knowledge and skills.
Companies in Japan are busy creating all kinds of products and services for the elderly, from accessible cars to their famous elder-
care robots.
Yet, at the end of the day, families are expected to be the caregivers, which is placing enormous strain on the Japanese social
systems.
What will the elder wave mean here?

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1950 Average New Home

980 square feet for 3.4 people

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Let’s consider livable communities and where and how we all want to live. We have gotten ourselves into a fix with housing, I believe,
by, in a sense, being so successful. In 1950 3.4 people lived in an average of 980 square feet. Many of us remember those homes.
Then the economy took off, and we looked for something larger, and better.

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5,000 Sq. Ft. Homes
Today’s Average New Home

2600 square feet for 2.6 people

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Today, 2.6 people live in an average of 2600 square feet. But this includes condos and apartments, and the real housing
phenomenon of our time are the really large houses, like these 5000 square foot examples. The Atlanta region specifically and
Georgia more generally is a prime area for these developments of large and very large homes. It looks like success, it feels like
success. But what does it portend for tomorrow?

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Ultimate Age Wave Question… Need to Age the Home
Increasingly, 65-somethings will be 1st Floor Master Rocker switches
facing large homes with dark Dual Suites Lower, even adjustable
counters
Wide hall ways
bedrooms, lots of yard work, and a
Ramps, slopes
Decreasing size
rusting basketball hoop over the Contrasting Steps
& cost by one-
garage. How many graying boomers Multi-family
half going
will actually live in those 5000sf Apartments added
Co-housing
McMansions? Will you? But who forward from
else can afford them? 2007

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Increasingly 65-somethings, that is you and me, are going to face large empty homes, with lots of yard work and a rusting basketball
hoop over the garage. When we answer surveys, we will say we want to stay in these homes as long as possible. But, really now,
how many aging boomers will actually make that choice? Will you? Can you afford it? And if you cannot, who will buy that home?

We are well past, in my opinion, the time to begin thinking seriously about housing options going forward. We say we want to live
where we are, in what aging specialists call “naturally occurring retirement communities,” in part because of memories and friends and
families and mortgages either paid off or not. But we also express that preference because, really, there are very few alternatives.
Are there any alternatives where you live?

We need to begin aging the home, with features such as you see here, dual suites, wide hallways, and so on. We need to think about
the adjustments that will be needed in zoning, for remodeling McMansions into multi-senior homes like we once did with those old
Victorians, and which will probably become some of the great neighborhood battles of the future.

Most of all I like to challenge the building and real estate and community planning people with this: I believe that going forward we
need to invent attractive, livable, modern, even high-tech individual homes that are half the size and half the cost of today’s average
housing. Since we are going to have something like 55 million more seniors in the U.S. in 2025-2030 than today, we might need,
what, 5 million, 10 million such homes, maybe more. And this is not to mention developments like co-housing and assisted living
environments and so on that we will need.

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Long Term Care
Infrastructure Needs
Programs for in-home care
Georgia spends 23% of Medicaid dollars on in-
Sign and document readability
home care, second to least in the nation
Public transportation / walkability Georgia recently received funding to create
Retrofitting homes for better more one-stop counseling centers for help
accessibility navigating in-home care providers
40% of Georgia’s elderly live in rural areas
Complete communities
Re-zoning Compare to 5% in Massachusetts, 12% in
Colorado
Small home options
Most of Georgia’s long-term care services
are in urban areas

Source: Stateline.org, September 14, 2007
Source: Duluth Weekly, September 10, 2007
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There are infrastructure needs beyond housing, including the transportation issue I raised earlier. Critical here will be allowing and
then developing environments where walking is invited and part of daily life. We need complete communities, a favorite of the new
urban movement, but it seems to me perfectly suited for tomorrow’s elders.

Beyond livable communities, you will hear today about long term care. Georgia faces some real catching up to do here. You spend
the second least in the nation on Medicaid for in-home care, but have recently received funding to create some one-stop counseling
centers to help people navigate the complex world of home care and elder health care in general. This is a start. Beyond that you
have a mis-match between where elders live – 40% live in rural areas – while most of your long term care services are in urban areas.

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Caregivers
Aging and Mental Health
4.7 potential care givers (Age 20-64) for
In Georgia, the elderly account for 20% of all
each person over 65 in 2005
suicides, especially among white males
Less than 3% of elderly receive treatment
from mental health professionals
3.0 potential caregivers for each person 65+
Depression may be linked to other chronic
conditions like cancer, Alzheimer’s disease, in 2025
arthritis, obesity, and heart disease.

Source: “Georgia’s Aging Population,” a report to the Healthcare Georgia Foundation.
http://gbpi.org/pubs/specialreport/20051005.pdf

Source: Georgia.gov, DHR
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We are going to hear today about the mental health needs of the age wave. Mental health is a major issue for the elderly, who
account for example for 20% of all suicides. Yet less than 3% of the elderly receive professional mental health care. Since the elderly
are expected, paradoxically, to be both healthier yet to have more chronic conditions like arthritis, obesity and heart disease, very long
term management of these chronic conditions will be a challenge, as well as a strain on budget.

We also confront a coming gap between care givers those needing care. Just as we hear so often about the decline in the number of
workers to support each Social Security recipient, we face a decline in the number of available care givers per person over age 65
from 4.7 in 2005 to 3.0 in 2025. In other words, we will have to develop support systems to provide the volume of care that is going to
be needed, though I should remind you here to recall that boomers will be age 61-79 in 2025, not quite ancient at that point.

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Are we ready for aged workforce?
Manpower, Inc.: 28,000 employers 25 countries:
14% have strategies to recruit older (over 50) workers
21% have strategies to retain older workers

Boston College study U.S. companies:
60% report recruiting competent workforce a significant HR
problem
40% say management skills in short supply
37% have strategies to retain older workers
24% have made some projections about their aging
workforce
9% have made detailed projections about their aging
workforce
20TH Century retirement came to
an end in 1990, as the number of
Most older workers say 9-5, 5-day week does not
older workers began increasing.
work for them
Time Online, 7-29.2002
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Let’s come back now to the subject of work versus retirement. I love this illustration of our retirement dream, and the chart along side
it that suggests that retirement as we think of it actually came to an end in 1990, not some time in the future. It was in 1990 that a long
term trend reversed, and more men age 62, 65, and 70 began to stay in the work force. Now, remember the survey that said 67% of
those over 55 in the Atlanta area had stopped working. The report on the screen, from Time magazine, suggests that beneath the
apparently dominant trend of earlier and earlier retirement there is an emergent trend of more people staying in the workforce longer.
The percentages are not great, barely 10% of those age 70, 30% of those age 65, and 50% of those age 62. But the trend line may
be reversing, following the old adage, “beware the permanent trend.” Why would the trend to early retirement reverse? The possible
answers are plain: people see that, with luck, they can expect to live longer. And, many people can see that they are not financially
set, and thus must continue to work.

But, are our workplaces ready for this? Studies by Manpower Inc, and by Boston College suggest we are not ready. In fact, the
Manpower Inc. global study found that only 21% of companies in 25 countries have strategies to retain older workers. Boston College
found that only 24% of the U.S. companies they surveyed have made some projections about their aging workforce and only 9% have
made detailed projections about their aging workers. Remember Japan. There, companies are looking for ways to keep older
workers longer. What is your organization doing? When you ask today’s and tomorrow’s seniors, they will tell you that a 9-5, 5-day-a-
week job does not work for them, and is not wanted. But are we looking for creative ways to employ people longer, not just because
it would be nice to do so, but because it will be necessary?

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Impact on Tax Receipts
Less income

Beyond the spending wave

Tax exemptions

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The final topic we will explore today will be the fiscal and economic impacts of the age wave.

It is safe to assume that when nearly 20% of the population is either out of the workforce, or as just discussed still in it but working and
earning less, we will have less income over-all, and less taxable income as well. Seniors are well beyond the spending wave that
drives consumer spending and tax receipts. There is a well documented phenomenon in which we spend the most money in our lives
between the ages of about 40 and 50. This is when, if you have a family, the kids are teens. You buy your biggest house, extra cars,
computers, clothes, food, and so on. As we age, spending slows, no mystery there, and it is not simply income related. We just do
not need to spend so much. So, a consumer-driven economy will feel an impact.

At the same time, for the various reasons I have discussed, many of tomorrow’s seniors will not have the savings or benefits needed
for long retirements. They are going to need support. As a political force, both directly and indirectly, and I understand this is
especially true here in Georgia, the pressure tends to be to cut taxes that touch seniors. A policy dilemma to wrestle with is whether
this will make sense into the distant future when 20% are seniors? We are going to hear much more on this subject this afternoon.

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Is Aging Just Beginning?
Medicine of Today and the Future Mid-21st Century Folk Song
Today
Diagnostics—”pauciparameter”
Happy Birthday Dear Granny
Therapy--reactive
Happy Birthday Dear Granny
Prevention--minor role
Happy One Hundred and Twenty
Future
Birthdays, Dear Granny
Diagnostics--multiparameter
Happy Birthday To You
Therapy--diagnostics-driven and personalized
Prevention--dominant role

Extend productive life span by 10-20 years over next 30 years
Dr. Leroy Hood, Inst. Systems Biology

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So we confront issues of livable communities and housing, elder care, and fiscal impacts, as we look to an older future. And,
the age wave may only be beginning.
I am acquainted with Dr. Leroy Hood, who played a key role in the human genome project. He makes the point you see here,
that when we compare the medicine of today to that of tomorrow, great strides are possible. Today medicine focuses on
diagnostics that measure just a few health parameters, but soon will measure thousands. Today therapy is reactive – you are
treated after you have something. Tomorrow therapy will be personalized and will have moved “upstream” based on
forecasts and you will be treated before you get something. Today preventive health plays a minor role, tomorrow it may be
the focus of medicine.
And if Hood is right, then our productive life span may suddenly jump by 10 or 20 years in the next 30, well beyond the routine
improvements in longevity. It could even be that by mid-century we will sing happy 120 birthdays dear Granny, happy
birthday to you.
Twenty years ago we could see the age wave coming, but it was over the horizon. Now, it is lapping at our feet. We still
have time to prepare, but not much time. I look forward to our conversations today.

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© Glen Hiemstra

The Aging Population and the Future, with Glen Hiemstra, Futurist.com

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The Aging Population and the Future, with Glen Hiemstra, Futurist.com