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Age Power: How the 21st Century Will Be Ruled by the New Old

Age Power: How the 21st Century Will Be Ruled by the New Old

by Ken Dychtwald

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In this breakthrough book, Dychtwald explains how individuals, businesses, and governments can best prepare for a new era in which the priorities of our homes and nation will be set by the needs and desires of the elderly. He surveys how each of us must make individual decisions right now to "age-proof" our lives.


In this breakthrough book, Dychtwald explains how individuals, businesses, and governments can best prepare for a new era in which the priorities of our homes and nation will be set by the needs and desires of the elderly. He surveys how each of us must make individual decisions right now to "age-proof" our lives.

Editorial Reviews

Publishers Weekly - Publisher's Weekly
In a far-sighted and important report, Dychtwald warns that unless we productively integrate the elderly into all levels of our society, the U.S. will rapidly become an "elder wasteland." A psychologist, gerontologist and corporate consultant, Dychtwald's (Age Wave, Bodymind) new book is a wake-up call to debt-laden baby boomers heading toward poverty-stricken old age, to senior citizens and to society as a whole. He succeeds admirably, even though his presentation is weakened by catchy generalizations, facile predictions and lecture-circuit style ("The epicenter of economic and political power will shift from the young to the old" as the nation is transformed into a "gerontocracy"). Instead of a standard retirement at age 65, Dychtwald recommends "phased retirement" programs, long practiced in Europe, as well as more portable pensions. He advocates making self-care and disease prevention national priorities and calls for the creation of a National Elder Corps (loosely modeled on the Peace Corps). Some of his proposals will prove controversial, such as raising the age when Social Security and Medicare benefits begin or privatizing portions of Social Security. In Dychtwald's framework, "middlescence" (a greatly extended middle period of life, from age 40 to 60 and beyond) will afford countless boomers a second chance to fulfill their dreams. His optimism and openness to new ways of making the golden years productive render this book a thought-provoking and worthwhile read. Eight-city author tour. (Sept.) Copyright 1999 Cahners Business Information.
Library Journal
Continuing themes discussed in several of his previous books (Age Wave: The Challenges and Opportunities of an Aging America, LJ 3/15/89), Dychtwald, the founding president of Age Wave, LLC, a business development firm, here considers the personal and societal implications of having tens of millions of people living to the age of 80 and beyond in the coming years. Dychtwald assures us that the glass is half full that is, if we follow his advice in both the public policy arena and in our personal lives. His sweep is broad, if not necessarily deep, as he touches on everything from spare body parts to intergenerational relations, and his prose is punchy and jargon-laden. The book is partially redeemed by a wealth of scholarly references but even these are typographically difficult to follow. There is nothing remarkably new here, but the book is a fairly complete, nicely wrapped package that public libraries will want to consider.--Ellen Gilbert, Rutgers Univ. Lib., New Brunswick, NJ Copyright 1999 Cahners Business Information.

Product Details

Penguin Publishing Group
Publication date:
Edition description:
Product dimensions:
5.90(w) x 9.00(h) x 0.70(d)
Age Range:
18 Years

Read an Excerpt

Chapter One


America is becoming a "gerontocracy," and four outcomes are certain:

1. More of us will live longer than in any previous generation;

2. The epicenter of economic and political power will shift from the young to the old;

3. We will need to change our current mind set about how to spend our extra years of life; and

4. How we decide to behave as elders will, in all likelihood, become the most important challenge we will face in our lives.

    Living in an age when scientific and technological "miracles" are almost a matter of course, it's easy to overlook just how remarkable a thing aging is. But consider one startling fact: Throughout 99 percent of all the years that humans have walked this planet, the average life expectancy at birth was less than 18 years. In the past, most people didn't age—they died. Infectious diseases, accidents, violence, and many other hazards often brought life to an early close. Even though some people lived to 50 or 60 or even 80, they were very few and far between. During the past 1,000 years, our life expectancy has climbed from an average of 25 to 47 at the turn of the 20th century, and skyrocketed to 76 today. Until very recently, people were much more likely to die young than old.

    When the first U.S. census was taken in 1790, half the population was under the age of 16 and less than 2 percent of the 4 million people who responded were 65 andolder. Few adult Americans in that year could expect to live more than 35 to 45 years—about the same as in Europe. As a result, societies rarely concerned themselves with the needs of their aging citizens. The elderly were too few to matter.

    Not surprisingly, our forebears didn't sit around and wonder what they were going to do in retirement, because very few were going to retire. No one contemplated lifelong learning at 75. Businesses didn't care about the "mature market" because there Wasn't one. Arthritis, heart disease, and Alzheimer's weren't major healthcare concerns because most people died of acute, infectious diseases before they got old enough for aging-related conditions to emerge.

    Beginning in the last century, however, something volcanic has begun. Thanks to advances in sanitation, public health, food science, pharmacy, surgery, medicine, and, more recently, wellness-oriented lifestyles, most of us will age. In a manner unprecedented throughout human evolution, people suddenly have begun to routinely remain healthy and vigorous into their seventies and eighties, and tomorrow's elderly will, in all likelihood, live even longer.

    During the 20th century, the number of Americans who are 65+ has increased elevenfold, from 3 million to 33 million. According to the U.S. Census Bureau, by 2035 some 70 million people, of whom 60 million will be elder boomers, will be age 65 and older. This is a number more than twice the current population of Canada.

    This astonishing "age wave" is not unique to the United States. All the modernized nations of the world are evolving from youthful to mature societies—and the developing nations will follow suit in the 21st century. For example, in 1950 the average life expectancy for Japanese women was 61.4 years, and for men 58. Since then, it has vaulted to one of the highest in the world—83 for women and 76 for men. In one generation, the life expectancy of Japanese has increased by more than 30 percent. And the aging of Japan is destined to continue: Although Japanese seniors currently comprise 15 percent of their society, forecasts show that by 2025 that number will grow to 25 percent.

    The United Nations expects that by the year 2050, there will be nearly two billion people in the world 60 years and older—a number equal to the current combined populations of North America, Europe, and India. Today, according to the U.N.'s Population Division, 1 of every 10 persons living is age 60 or older, but by the year 2050, that ratio will double to 1 of 5. And this age shift is reconfiguring the older population segment as well. Right now, those 80 and older constitute 11 percent of the world's 60+ population; by 2050, 16 percent of the older population will be more than 80 years old.

The Birth Dearth

    At the same time that we're living longer, fertility rates in the U.S., Europe, Japan, and other modernized nations are dropping. As noted by Carl Haub, a demographer at the Population Reference Bureau in Washington, DC, "Population decline due to low fertility is a new phenomenon—unlike previous declines due to catastrophic events such as the Thirty Years' War or the Black Death in medieval Europe." In the United States, the fertility rate is hovering around 2.1—poised just on the edge of the minimum replacement level and down from 3.8 during the 1950s and early 1960s. If it weren't for the steady inflow of youthful immigrant families, the American population would be shrinking.

    Currently, there isn't a country in Europe where couples are having enough children to replace themselves. Dr. Jean Bourgeois-Pichat, chairman of the Committee for International Cooperation in National Research in Demography, observes that the European birth dearth was not anticipated: "The fertility decline started around 1965 almost simultaneously in every country and took everybody by surprise." The Italian fertility rate recently plummeted to fewer than 1.2 children per woman—the lowest level ever recorded in any society. Italy also became the first country in history—followed shortly thereafter by Germany, Greece, and Spain—to have more people over the age of 60 than under the age of 20.

    In China, the total fertility rate has dropped from 6.7 children per woman in 1950 to 1.8 today. At the same time, the average Chinese life expectancy has jumped 28 years since 1950. As a result, China's 60+ segment is growing seven times as fast as its total population.

    Demographers are chagrined to observe that the more educated and financially secure a country becomes, and the higher the numbers of women pursuing nondomestic careers, the lower fertility drops. The northern Italian city of Bologna offers a disconcerting glimpse into the future. In this city, the quality of life is good and the women are better educated than in any other region of the country. However, the fertility rate fell to .8 in 1997. During the same year, the fertility rate in Japan, the nation with the world's highest longevity, dropped to 1.39, the lowest it has ever been.

    Even in less-developed nations, fertility rates have dropped by 50 percent during the past several decades. "If these trends continue," says Nicholas Eberstadt, a demographer at the American Enterprise Institute for Public Policy Research, "in a generation or two there may be countries where people's only blood relatives will be their parents."

    Some countries are trying to reverse the trend. Worried about the future economic and workforce implications of such a low birth rate, the Japanese government has started a campaign to encourage young men and women to have more children. A few years ago in the rural town of Yamaguchi, for example, local officials began airing television commercials that portrayed a little boy playing all alone with his puppy. The caption underneath stated: "For the child's sake, one more."

    No country has tried harder to battle declining fertility than Sweden. Several decades ago, when officials noticed the fertility of young families dropping, the government began to provide cash payments for each child to couples in which both parents work, along with generous tax incentives and a highly flexible work-leave program that allows parents to work part-time for up to eight years after each child's birth. These programs seemed to work: Sweden's birth rate rose to 2.1 in 1990—the highest in Europe at the time.

    Then the Swedish baby boom fizzled, and the birth rate fell back to 1.6. Dumbfounded, government leaders attributed the drop to the soft economy during that period. Since 1995, however, the economy has perked up but the fertility rate has not—it has fallen further, to 1.42 children per woman in 1997. "We were a model for the world," says Marten Lagergren, undersecretary in the Ministry of Social Health and Welfare. "They all came to examine us. People thought we had some secret. Unfortunately, it seems that we do not."

    While immigration may help shore up the birth dearth in some countries, it will not be sufficient to offset the swelling numbers of seniors. According to the Organization for Economic Cooperation and Development (OECD), Japan, Germany, and Italy would each need to import 13 to 15 million young people (and no elderly), a number equivalent to the combined current populations of Ireland, Denmark, and Norway, between now and the year 2050—something that is practically impossible. Ben Wattenberg, a senior fellow at the American Enterprise Institute and author of The Birth Dearth is worried about the effects of declining fertility: "In my judgment, the major threat to Western values and the free world concerns the fact that, as the next century progresses, there won't be many free Westerners around to protect and promote those values."

    Despite the demographic changes that are gaining on us, we continue to think of our society as "youth-focused," one in which it is "in" to be young. Can we even conceive of a future in which "age power" will rule and it will be "in" to be old?

    For most of history, in fact, it was maturity that was prized. Until relatively recently, the old, more than any other age group, controlled power, assumed leadership, and set the example for others. In the early centuries of American history, in nearly every aspect of community, family, and work life, old people reigned. Only during the 20th century have they temporarily been knocked to the mat, viewed largely as a social burden. But they are not down for the count: If you look around, you'll notice that during the past several decades the elderly have multiplied, growing stronger, richer, and politically tougher. They are returning to the status and control that once was theirs.

When Old Was In

    Why were old people so highly valued in earlier centuries? Why did the young admire and respect them? How did they attain their position of social dominance—and how did they lose it? To comprehend the up, down, and soon-to-be-up-again saga of America's elderly, it's helpful to understand the factors that contributed to their initial stature.


    During colonial times, it was thought that those few men and women who lived to a great age were the beneficiaries of divine will. As Increase Mather, an early president of Harvard College and pastor of the famous North Church in Boston, preached in 1716, "If a man is favored with long life ... it is God that has lengthened his days."

    The elderly were venerated and treated with great respect. People lived slightly longer, on average, in the American colonies than in Europe, and early Americans pointed with pride to their small but powerful elder population as living proof of an exceptional environment, a superior social system, and, most especially, God's blessing.

    Because medical science had not yet formulated theories of contagious or degenerative disease, it was generally believed that the key to a long life was the practice of temperance, moderation, and religious virtue. The achievement of even modest longevity—50 or 60 years—was admired, and the elderly came to be looked upon as advisers to their less-experienced younger fellows.

    Typical of this attitude is Benjamin Franklin's 1757 essay "The Way to Wealth," in which he used the telltale device of a wise elder—"Father Abraham"—to dispense worldly advice: "... and one of the company called to a plain, clean old man, with white locks, `Pray father Abraham, what think you of these times? Will not those heavy taxes quite ruin the country? How shall we ever be able to pay them? What would you advise us to do?'"

    Commenting on the elderly's moral expertise, the Reverend Cortlandt Van Rensselaer wrote in his influential book Old Age:

What a blessed influence the old exert in cherishing feelings of reverence, affection and subordination in families; in warning the young against the temptations and allurements of the world; in detailing the results of experience, in exposing the fallacies of worldly maxims; in rebuking the recklessness of indiscretion and the experiments of enthusiasm; in imparting judicious counsel in church and State and private life;—in short, how much good of every kind is accomplished by the tranquilizing, wise and conservative influences of age.


    In colonial America, social control lay in the ownership of land, which was almost always retained by elder parents or grandparents. People didn't work for "money" that could be spent as they liked. Instead, they worked to complete chores, which were primarily agriculture-related and family-based. The crops and items produced were then traded for other products and services within the local community; only occasionally was an item such as a new tool or a length of silk ordered from a distant distributor or itinerant peddler and paid for with cash.

    As a result, nearly all of a person's economic worth was linked to the value of the family property. In that society, most young people were totally dependent on the family for security, work, and the hope of one day owning some portion of the estate. It was common for children to be fully grown with families of their own before inheriting part of the family property. Daughters might not marry unless their parents were willing to provide a dowry; sons might not be allowed to take over the family farm unless they conformed to all the conditions set by their elders. As historian David Hackett Fischer has observed, "Land was an instrument of generational politics—a way of preserving both the power and authority of the elderly."

    In his book Four Generations: Population, Land, and Family in Colonial Andover, Massachusetts, Rutgers University historian Philip Greven illustrates the complex generational relationships as played out in that town's Holt family:

Nicholas Holt's second son, Henry, had eight sons. Seven of them married when they were 25. But their land did not come to them until 1717, when Henry Holt was 73 and four of his sons had been long married—from seven to 17 years. Henry's seventh son, William, never married at all. It was he who received the original homestead (at the age of 30) by a deed of gift that required him to "take ye sole care of his father Henry Holt and of his Naturall Mother Sarah Holt" for the rest of their days and to provide them with many things, all carefully spelled out in elaborate detail, even to the candles and hard cider. And if William had failed to supply "any one article aforementioned," he would have forfeited his property.


    So highly valued was old age that both men and women of that time tended to exaggerate their age when asked, and the older they were, the greater was the tendency to exaggerate. Similarly, men and women of all ages actually tried to appear older than they really were. Men hid their natural hair beneath wigs, which were often powdered white to enhance the illusion of age. Men's clothing was cut in a way that emphasized the posture and build of the elderly: narrow and rounded shoulders, broad hips and waist, and coat backs designed to make the spine appear to be bent by the weight of many years.

    As for women's fashions, its foremost purpose was to ensure sexual subordination and chastity; this was accomplished by head-to-toe coverage. Yet the dresses also stressed mature features. Heavy swirling skirts accentuated broad hips, and those who lacked the pear shape of advanced years were encouraged to add hoops and whalebone extenders. The popular empire-line dress, form-fitting until just under the breast, did not discriminate against a spreading torso. Formal wear called for exposed shoulders and decolletage, features that work to the mature woman's advantage. Women, too, wore powdered wigs as well as caps. A young body was not required in order to be fashionable—a far cry from our contemporary standards.

Industrialization Topples the Initial American Gerontocracy

    In the world of the farmer, the experience of old people was perceived as very valuable, helping them in their work and in their role as head of the family. That arrangement, however, was shaken by the abrupt economic shift to industrialization that gained momentum in the second half of the 19th century. In 1800, approximately 80 percent of all male American workers were engaged in agriculture; by 1900, that number had shrunk to less than 30 percent.

    The industrial age introduced a whole new set of priorities; youthful energy and mobility came to be prized over stability, experience, and homespun wisdom. On the farm, older men and women could continue contributing to some aspect of work or family life, but in the factory there was no sympathy for Grandpa's aging hands slowing down the assembly line. And since all of the industrial technology was new, the wisdom of the old offered no useful advantage over the enthusiasm and raw strength of the young.

    The status and privilege old people had enjoyed as property owners and family heads eroded in the emerging industrial era, in which they were coming to be seen as an obstacle to progress—a social burden. Bursting with energy and unencumbered by any prejudices about how to do their work, the young were most suited to the changing times. The new city-based occupations were now considered indispensable to the nation's progress, and the young workers who filled these positions were rewarded with higher pay and higher status. The jobs also allowed young men to break free from economic dependence on their elders. For the first time in our history, knowledge of and commitment to the old ways of doing things could be seen as a distinct disadvantage.

    This view was voiced by many prominent leaders of the time, including Dr. William Osler, one of America and Great Britain's most respected physician-philosophers. In his now infamous 1905 valedictory at Johns Hopkins University, Osler argued that men older than 40 were now useless cogs in modern society: "All the great advances have come from men under 40, so the history of the world shows that a very large proportion of the evils may be traced to the sexagenarians—nearly all of the great mistakes politically and socially, all of the worst poems, most of the bad pictures, a majority of the bad novels, not a few of the bad sermons and speeches. Take the sum of human achievement in action, in science, in art, in literature, subtract the work of men above 40, and ... we would practically be where we are today."

    Britain's Anthony Trollope went even further, proposing that life should have a "fixed period" in order to abolish "the miseries, weaknesses, and imbecility of old age by the prearranged ceasing to live of those who would otherwise become old." His rationale? "Statistics have told us that the unprofitable young and the no less unprofitable old form a third of the population.... How are the people to thrive when so weighted? And for what good? As for the children, they are clearly necessary. They have to be nourished in order that they may do good work as their time shall come. But for whose good are the old and effete to be maintained amidst all their troubles and miseries?"

    Eventually, a perspective emerged arguing that older men and women should actually be removed from the workforce altogether. The following analysis was offered by F. Spencer Baldwin, professor of economics at Boston University, in his 1911 recommendations about the employment of aging municipal workers:

It is well understood nowadays that the practice of retaining on the payroll aged workers who can no longer render a fair equivalent for their wages is wasteful and demoralizing. The loss is twofold. In the first place, payment of full wages to workers who are no longer reasonably efficient, and in the second place, there is the direct loss entailed by the slow pace by the presence of worn-out veterans; and consequent general demoralization of the service.


    With the development of the germ theory of disease in the late 19th century, medicine had a useful and compelling new hypothesis for understanding and combating the ailments that formerly had killed so many people. The new biological explanations for sickness and death cast creeping doubt on the Puritan notions that moderation and temperance led to longevity. Since it wasn't God who determined who was to live the longest, the elderly were no longer considered divinely selected experts on how to achieve a healthy old age.

    Instead, the exaltation of mechanics that empowered the Industrial Revolution was extended to medicine, spurring a view of the body as a system of interdependent working parts. The diseased patient was simply the equivalent of damaged equipment, while the physician came to be viewed as nearly omnipotent in his power to "fix" what had gone wrong. As Dr. Nathan Allen commented in his paper The Physiological Laws of Human Increase presented at the 1870 annual meeting of the American Medical Association: "True education, all genuine civilization, and pure Christianity, in order to have a permanent basis and progress, must have their foundation and support in the laws of the physical system.... And who are to be the interpreters, the expounders of these laws, unless the members of the medical profession?" As physician authority became entrenched, home remedies and elder wisdom were dismissed as "old wives' tales."

    "New scientific theories and economic realities convinced Americans that individuals declined in old age as human existence marched on," reflects historian Andrew Achenbaum in Old Age in the New Land. "Because they perceived the elderly to be afflicted with pathological disorders and no longer able to keep up with the pace, it is not surprising that writers claimed old people had lost their grasp on the meaning and nature of societal development. Presuming it to be a law of nature that an individual's connection with societal progress relaxed with the coming of age, Americans gradually discounted the value of old people's insights and claimed that young people were in the best position to understand the meaning of life."

    Ironically, at the same time medical science was helping to create longevity for these pioneering elder citizens, it inadvertently contributed to their deterioration in status.


    From a rural, family-based lifestyle to an urban, workplace-oriented one; from divine selection to germ theory; from veneration to a growing disregard toward the old—the tipping of the social seesaw sent the status of the elderly plummeting.

    Social customs as well as social commentary reflected the changing fortunes of the elderly. No longer were the best seats in public meetings reserved for them, for instance; instead, they were simply bought by the wealthiest and most powerful community members.

    In their dress also, people strove to turn back the clock where once they had nudged it forward. Instead of wigs, men donned hair-pieces and toupees. The white powder that had lent the dignity of age yielded to hair dyes, tints, and preservatives. The cut of a man's coat—pulled in at the waist and puffed out at the shoulders, the back straight and broad to accentuate the power and vitality of youth—was just the inverse of earlier styles.

    For women, the fashion transformation was even more remarkable. In the first two decades of the 20th century, they went from wearing hoopskirted, mature-oriented drapery to flapper dresses that emphasized an adolescent, thin-hipped build. This transition was too much for many older women, who clung to a more conservative style, with the result that for the first time there was a definite chasm between what a 20-year-old woman and a 50-year-old woman would wear in public.

    Fashions in the language of the time reflect the emerging "modern" opinion of the elderly. "Gaffer" and "fogy," once terms of respect, took on negative connotations, and there were plenty of popular new words and phrases—"geezer," "codger," "old goat"—to make the same point. Young people, meanwhile, got off easily, as condescending terms such as "youngling" and "skipper" faded into obscurity. Given the attitudes that these words betray, it's no wonder that census data would now show a steadily increasing trend toward distorting one's age downward, the opposite of what once held true.


    No longer valued for their experience and insight, their role as arbiters of style and behavior usurped by the young, often seen as a burden on society, the old were beset on all sides. Such unprecedented dynamics had serious consequences. By the 1920s, increasing discrimination against older men and women in employment and in the community at large exposed growing numbers of older people to the threat of poverty and loneliness. At the same time, the extended family was becoming less able to provide for their needs. In response, state and local governments stepped up their building of institutions and asylums, disproportionately populated by growing legions of impoverished elders. Most of these homes were horrible "warehouses" for the aged, the infirm, and the dying.

    By 1930, approximately 30 percent of the nation's elderly were living in poverty. At that time, fewer than 15 percent of American workers were covered by any sort of pension plan. And since very few dependents were covered by these plans, less than 6 percent of the population could expect to receive any benefits if they survived to old age. During this same period, medical advances continued to prolong the lives of more men and women, adding to the ranks of the poor old.

Reversal of Fortune: Elders' Growing Financial Power

    The historic turning point eventually came on August 14, 1935. In the midst of the Great Depression, one in three seniors was sinking ever deeper into poverty, and their social and political status had fallen to its lowest point in American history.

    Franklin D. Roosevelt and his New Deal supporters designed an ingenious plan to solve several problems at once. Roosevelt's dual goal was to create a financial safety net that would protect America's elderly from a "poverty-ridden old age" and simultaneously get young men working again. Roosevelt's "Social Security" program, passed by Congress on that summer day in 1935, initiated a bold movement toward restoring intergenerational financial security that brilliantly matched the unique needs of the era: It provided a basic level of support for America's elderly while removing them from competing for jobs with the young.

    Since that day, America's elders have been rising up from being its underdogs to society's economic and political bulldogs.

    Several critical economic, social, and political factors helped trigger this reversal. In addition to the immediate boost in economic stability that Social Security provided, the future financial status of the old got additional infusions from the growth in pension coverage. Throughout the 1930s, only about 4 million employees were covered by corporate pension plans. The 1940s, however, tell a different story.

    Pension funds became an attractive vehicle for corporations when, in 1942, the government extended an existing ruling that both employer contributions to pensions and the earnings on these contributions were tax deductible. At the time, companies faced "excess profit" taxes approaching 100 percent, created to hinder wartime profiteering. Therefore, pension contributions allowed employers to make appealing arrangements with their employees while avoiding heavy taxation.

    In addition, union officials discovered during the 1940s that while they couldn't negotiate for higher salaries because of war-related wage freezes, they could bargain for higher pensions. Union leader Walter Reuther coined the slogan "Too Old to Work—Too Young to Die," which became the rallying cry for workers demanding retirement benefits. These new pensions were tax deductible and, as future obligations, didn't show up on a company's books. Attractive to both workers and companies, pensions proliferated. At that time, union membership represented 22 percent of labor force participants. As a result, by 1950 pension coverage had expanded to approximately 10 million employees, representing some 25 percent of the private sector labor force.

    Another great boost to the future status of this generation was set in motion at the end of World War II by the GI Bill. This new law gave veterans the opportunity to have their college education or vocational training heavily subsidized by the government. Between 1944 and 1956, more than half of the returning veterans (nearly 8 million people) took advantage of it, receiving some $14.5 billion in educational support. In 1947, fully half of all college students were veterans.

    As I will discuss in greater detail in Chapter 5, in the 1960s the elderly also became the recipients of a windfall of support from Medicare. In 1965, the average senior struggling against an impoverished old age received $1 per year in healthcare-related government support. Thanks to Medicare, that number has vaulted to $7,000 today.

    The average 65+ couple today receives approximately $22,000 each year from Social Security and another $12,000 of yearly value from Medicare—for life. Urban Institute senior fellow C. Eugene Steuerle calculates that, using today's prices, an average-income couple retiring in 1960 could expect at that time to receive about $100,000 in lifetime Social Security benefits. A typical couple retiring in 1999 would receive nearly $500,000 in Social Security and Medicare benefits (about equal amounts of each).

    Today's 50+ men and women now control 80 percent of all the money in U.S. savings-and-loan institutions and represent $66 of every $100 invested in the stock market. A critical part of the growing economic clout of today's older adults comes from the compounding of the investments they made with dollars earned years ago. Many have benefited dramatically from the stock market updraft that they've ridden in their lives: Remember that the Dow has multiplied from 200 in 1950 to 10,000+ today. Because they had their children early, hit their peak earning years after their kids were grown, and were careful with their money, the majority have been able to save and invest far more than any generation before or since.

    In addition, a remarkable 70 to 75 percent of all older men and women own the homes in which they live, about three-quarters of which are completely paid off. Many older homeowners were initially able to buy at a low cost, aided by extremely low interest rates—usually 4 to 5 percent on GI loans. Under the 1944 GI Bill and its successors, some one-fifth of postwar mortgages for single-family homes were subsidized by the Veterans Administration. In the 1950s or '60s, these homes might have cost $10,000 to $15,000. Property values rose steadily during the next decade or so, then went "through the roof" (as can be seen in the chart on the following page) when these couples' children—the boomers—entered the housing market, pushing property values up 500 percent from 1970 to 1995.

    That lift in real estate values, caused by the combination of increasing mobility and a demographic fluke, has given a valuable benefit to today's elder population that boomer elders won't experience. To illustrate these points, I recently asked the audience in one of my presentations if anyone was over 65 and living in a home they'd bought more than 25 years ago. Of the several people who raised their hands, I called on an elderly couple who, I learned, had bought their home 27 years before. They had qualified for a 4 percent GI mortgage loan on their house, which at that time cost $31,000. Their mortgage payments, which they were still paying, were $87 per month. I then asked the audience if anyone had purchased a house in the same neighborhood within the past three years. Several baby-boomer couples raised their hands. The couple I called on said that their home had cost $385,000 and, with the 7.06 percent loan they were able to secure, their payments were about $2,600 per month. Think about that: $1,000 per year versus $31,000 per year to live in the same kind of house in the same neighborhood.

    Robust government entitlements; home ownership; a lifetime of savings and investment; and recent attractive discounts on airfares, hotel stays, rental cars, movies, financial services, and dining have all contributed to drive the official poverty rate for those age 65 and over from about 35 percent early in the 1960s to an all-time low of 10.5 percent today.

What People are Saying About This

Pres. Jimmy Carter
I have been learning from Ken Dychtwald for years and am convinced that he is today's most innovative and original thinker on this important subject. This book, like all that Ken writes and says, offers a true education into the issues Americans face as we age.
Dean Ornish M.D.
Ken Dychtwald offers a powerful vision of a transformed healthcare system and provides individuals and our nation with a much-needed paradigm of old age as a period of health and vitality. The innovative ideas in this book will bring us closer to both a new age in healthcare and a better understanding of ourselves as we age.

Meet the Author

The bestselling author of books such as Age Wave and Bodymind, Dr. Ken Dychtwald is a psychologist, gerontologist, lecturer, and the founding president of Age Wave, LLC. He is widely viewed as the nation's foremost authority on the aging.

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