June 17, 2011
Marcus Shapiro, 39, was a personal trainer and frequent adventure traveler when he decided to launch FitForTrips.com in 2009. Aimed at aging boomers, FitForTrips provides online workouts tailored to each customer’s travel plans, whether it's summiting Kilimanjaro or biking through Italy. Depending on the length of the program, Shapiro charges from $169 to $339. Why target retirees? "Boomers have more disposable income,” Shapiro says. “Many are empty nesters and are therefore able to afford and make time for adventure travel.”
Shapiro is one of many entrepreneurs aiming to serve — and profit from — the vast wave of baby boomers heading into retirement. Starting this year, more than 7,000 boomers will turn 65 every day, and they’re still spending in spite of the economy. Americans age 47 and older spent $3.5 trillion on consumer goods and services in 2009, while Generation X and the Millennials combined spent $2.3 trillion, according to the Bureau of Labor Statistics Consumer Expenditure Survey. "As boomers grow older, they will transform practically every industry in America," said Matt Thornhill, president of Boomer Project, which focuses on helping organizations capitalize on the boomer generation.
Unlike previous generations, boomers aren’t likely to grow old quietly. Just as they've remade every other life stage, from college to careers and marriage, they’ll put their stamp on retirement. This generation scoffs at being referred to as "senior" and rejects the notion of spending their golden years in traditional retirement communities, sitting by the pool and playing golf. They're in better health and will live longer than their parents: many boomers with good health habits and good genes can expect to live past 90. Businesses large and small are trying to figure out what they'll want next, whether it's exotic travel experiences, career coaching or better ways to connect with their grandchildren.
One thing Boomers definitely seem to want in retirement is … to keep working. Nearly 70 percent say they plan to work past the traditional retirement age, according to a December 2010 study by the AARP. Forty percent of those surveyed said they planned to “work until they drop.” To be sure, in the wake of the Great Recession, many Americans are delaying retirement for financial reasons. But even many affluent Boomers want to stay connected to the workforce. Staying mentally and physically active outranked money worries as the most important reason for continuing to work for people in their 60s and 70s, according to a Merrill Lynch study.
This doesn’t necessarily mean they plan to stay at their old jobs, however. A series of organizations has sprung up around idea that retiring boomers will want a meaningful second act, according to Judy Goggin, a vice president of Civic Ventures. Her group oversees Encore Careers a think tank dedicated to helping boomers make retirement-age career transitions. Encore aims to help those in fields like accounting, health care, and technology become activists, teachers in low-income neighborhoods and directors of nonprofits.
More than 40 percent of boomers say they plan to take classes or “learn something new” while retired, creating big opportunities for colleges and educational programs. Harold Washington College, one of the City Colleges of Chicago, has adjusted student services like admissions, financial aid, career counseling and job placement to meet the needs of older students. Two years ago, it started classes like “preparing for the work world after 50.” A year ago, it added a program preparing people to become college instructors, which has attracted 45 students. John Hader, dean of career programs and continuing education, said that his program now has 665 students over age 50, up from 460 two years ago.
The travel industry also is looking to boomers for growth. Last year, the 36-year-old travel group, Elder Hostel, changed its name to Road Scholar. The word, "elder” was distasteful to boomers, while the new moniker "reflects a deep appreciation for learning," says spokeswoman Despina Gakopoulos. Adults ages 50 plus account for 80 percent of all luxury travel spending, according to Pew Internet and American Life Project. Travel + Leisure editor Mark Orwoll in February told the Today show that affluent boomers are creating their own “bucket lists” of trips they want to take. Among Orwoll’s suggestions for boomer getaways: surfing in Big Sur or drag racing in Baja.
Experts say the demand for educational travel, which combines two boomer loves, is likely to skyrocket. AuthentiCity, a division of Academic Travel Abroad, launched six months ago to tap into boomers' desires for rich, active travel experiences. Travelers to cities like Beijing, Cairo and Siena meet with a variety of locals, allowing boomers to "slow down and get immersed in the culture," said Chase Poffenberger, AuthEntiCity’s executive vice president. "We think this is really resonating with well-traveled, lifelong learners of the boomer age," she says.
Other businesses are betting on boomers’ penchant for sharing their feelings. Creating an online community for women over 50 is the goal of VibrantNation, a business founded by Stephen Reily. The site hosts 150 bloggers who discuss everything from how to end a marriage after 27 years to the best jeans for older women. It currently draws 100,000 visitors a month, but Reily's goal is one-million. He wsays advertisers traditionally have ignored this demographic, but that when they begin to pay attention, his business will benefit.
Boomers' desires to stay close to their grandchildren will also fuel certain industries. "We're seeing huge amounts of money being spent on things [boomers] possibly couldn't use themselves, like education, children's clothing and used cars," says John N. Migliaccio, director of research at MetLife Mature Market Institute. Those ages 65 to 74 spent $423 million on clothes for boys, nearly $1 billion on pets, toys and playground equipment, and $2.3 billion on education, according to a 2009 Consumer Expenditure survey.
Coby Neuenschwander founded Readeo in 2009 to help his two-year-old son stay connected to his out-of-town grandparents. The site combines video chat with reading children’s books. Both parties can view the same page of the book on the screen, while watching each other as the grandparent reads. Boomer grandparents “have the money to pay for services like this," says Neuschwander, who says he has thousands of customers and expects that number to grow quickly, as the next generation of grandparents will be more internet-savvy.
Of course, just like their parents, boomers will spend more on health care as they age: The industry is expected to grow by more than 50 percent between 2006 and 2016, while creating 1.15 million jobs, according to the Bureau of Labor Statistics. When Peter Ross, CEO and co-founder of Senior Helpers, which provides in-home care, founded his business in 2002, he focused on boomers hiring help for their parents. His business took off and he began franchising in 2005. Now there are more than 300 Senior Helper locations worldwide and the business had revenues of more than $100 million last year. He expects business to grow even faster when boomers themselves become customers. "Boomers won't settle for being in a home,” says Ross. "They will make this a very thriving industry for a long time."
How Baby Boomers Will Change Retirement Living (FoxBusiness)
7 Pitfalls Retiring Baby Boomers Must Avoid (MSNMoney)
10 Ways Baby Boomers Will Reinvent Retirement (U.S. News)