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July 2002, Vol. 125, No. 7
Planning ahead: consumer expenditure patterns in retirementGeoffrey D. Paulin and Abby L. Duly
The fastest growing segment of the U. S. population is composed of those aged 65 and older. The Bureau of the Census reported that in 1994, 1 in 8 Americans was in this age group, but projects that the ratio may be as high as 1 in 5 by 2050. Furthermore, with increases in life expectancy, today’s adults will live an average of 17 additional years after reaching age 65.1
As this demographic pattern shifts, an increasing demand for research and data on the older population—specifically, on retired persons and their roles on consumers—is constantly in evidence: "baby boomers," "privatization of Social Security," "Medicare," and tips on financial planning are common topics of the daily print and video media. The sheer growth in numbers suggests that the spending patterns of this older population will also play an increasingly important role in the future economy, an assumption supported by recent trends in expenditure levels. A study of real (that is, inflation-adjusted) expenditures from 1984 to 1997 finds that "spending by older consumers has risen from 12.6 percent to 14.6 percent of all consumer spending." 2
In addition to the concerns these issues may raise for policymakers, especially those involved with providing adequate care and protection for older consumers, the decision to retire has major implications for individuals and families. Understanding differences in spending patterns for preretired and retired consumers can help workers plan for the future.
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1 See 65+ in the United States, Current Population Reports, Special Studies (U.S. Bureau of the Census, 1996), pp 23–190.
2 Geoffrey D. Paulin, "Expenditure patterns of older Americans, 1984–97," Monthly Labor Review, May 2000, pp. 3–28.
Related BLS programs
Consumer Expenditure Surveys
Related Monthly Labor Review articles
Expenditure patterns of older Americans, 1984-97.—May 2000.
Expenditure patterns of retired and nonretired persons.—Apr. 1994.
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