Q. I continue to read that our seniors are a drain on the economy with the costs of Social Security, Medicare, Medicaid, and other government age-related programs. I don’t want to feel guilty because I certainly do my part. Can you provide another side of the story? Thanks. B.K.
Thank you for that very important question. Clearly, the programs you mentioned are a significant part of our government’s budget and expenses.
However, there is another side to the story. It’s called the longevity economy. This complex economy refers to the economic contributions of people aged 50 years and older. It includes the goods and services they buy, the jobs they support, and their contributions as workers, volunteers, and caregivers.
(Bear with me, this column has lots of numbers to make a point.)
According to the AARP Longevity Economy Outlook, in 2024 this 50-plus group accounted for $12.5 trillion in annual economic activity. If this population were its own economy, it would rank as the world’s third largest after the U.S. and China. Furthermore, this older cohort is a major source of government revenue, paying yearly 60% of federal income taxes. They support nearly half (46%) of U.S. jobs across all sectors; this includes their spending, work, and tax contributions.
So why is this occurring now? There are several driving forces.
Longer lives. To begin with, adults are living significantly longer lives. In 2024, life expectancy at birth was 79 years. That includes both men and women, with women living roughly five years longer than men. As a dramatic comparison, life expectancy in 1900 was 47 years. Additionally, many adults in their 50s and 60s are often at the peak of their earnings, which gives them a disproportionate spending power.
Working longer. Older adults are working longer. Those age 55 and older make up about one-fourth of the U.S. labor force, with some states having a higher concentration than others. If we just look at the age 50 and older, they make up roughly one-third of all workers.
Technology. The intersection of age and technology is often referred to as AgeTech, another driver of the longevity economy. In addition to helping older adults reach health-related goals, technology helps older adults address financial wellness and lifelong learning. Then there are wearables and using technology for communication and companionship, fall prevention, medication management, and more. On average, older adults are using 14 different digital services and 10 different apps in three months. The financial expenditure in this category is expected to double from $ 1 trillion to $2 trillion.
Unpaid caregiving. In 2024, the economic value in this category is valued at roughly $1 trillion. That dollar value translates to 59 million caregivers contributing almost 50 billion hours at about $20 per hour. That economic value exceeded the total amount of federal, state, and local Medicaid spending in 2024 ($932 billion).
Travel. Older Americans are traveling more than ever. In 2025, about 70% committed to traveling, representing tens of millions of dollars. And they are budgeting roughly $7,000 annually, planning road trips as well as international travel. The top motivators for this travel are visiting family and friends, their bucket list, as well as international travel.
Charitable giving and more. In 2024, almost three-quarters (70%) of households headed by someone 50 years and older gave $111 billion in charitable contributions. They also supported college students to the tune of roughly $13 billion.
Volunteering. About one quarter to one third of older Americans say they regularly volunteer in their communities, with the average volunteer hour valued at $30. Depending on the survey group, adults age 65 and older average 70 hours a year. National programs like AmeriCorps Seniors, which includes the Foster Grandparent Program, RSVP, and the Senior Companion program, mobilize hundreds of thousands of older volunteers each year. One estimate of economic value was close to $2 billion.
There is a big “however. That is, Social Security and Medicare are in trouble for the long term. We know more older folks are withdrawing their Social Security funds than those who are contributing. And more older adults are living longer with health issues, which is a challenge for Medicare with an eligibility age of 65. These are challenges for our public policy makers.
The economic value of older adults as contributors to the American economy is one of the best-kept secrets … at least for the public. I rest my case.
Thank you, B.K., for helping us keep a perspective.
Stay well and spread that gift of kindness.
Helen Dennis is a nationally recognized leader on issues of aging and the new retirement with academic, corporate, and nonprofit experience. Contact Helen with your questions and comments at Helendenn@gmail.com. Visit Helen at HelenMdennis.com and follow her on facebook.com/SuccessfulAgingCommunity.