The number of Americans age 90 or older has nearly tripled from approximately 700,000 in 1980 to almost 2 million in 2010. Further, the ranks of America’s oldest old are projected to more than quadruple in coming years, according to the U.S. Census Bureau’s “90+ in the United States: 2006-2008” report.
The growth of the “super seniors” age segment is likely to have far-reaching effects on many aspects of American society over the next 40 years. By 2050 the share of the 65+ population that falls into the 90+ category is projected to more than double from the current 4.7 percent to 10 percent of the older population.
The economic, societal and fundraising implications of this development should not be ignored and may be of particular importance to the current generation of gift planners for the remainder of their careers. Exactly how will the growing ranks of the oldest old affect current and deferred gifts in America?
Learning about the oldest old
Taking a look at some of the key findings about the 90+ population group may provide a better understanding of who they are and what characteristics are common to them.
• Social Security payments represent almost half of their income.
• Women outnumber men nearly three to one.
• More than 84 percent of the women are widowed.
• More than 42 percent of the men are married.
IRS statistics indicate that more than 75 percent of charitable bequests come from estates of decedents age 80 and older. In fact, more than 35 percent of all bequests come from those who were age 90 or older at the time of death.
The growth of the oldest old age group would seem to provide a basis for projecting large increases in bequest income in future years. However, increasing life expectancies can put pressure on a potential donor’s accumulated retirement assets over time.
Those with larger estates may not encounter this problem since, in many cases, their assets may continue to grow at a rate that is faster than the rate of their expenditures.
What to do
While it may be difficult to predict the exact impact of these potential developments, gift planners may wish to begin tracking current and future estate distributions more carefully in order to identify trends that may emerge over time.
In addition, other gift options such as life estates, gift annuities or charitable trusts may prove to be more attractive than a bequest for a growing number of donors in the future as these plans can help provide additional income while protecting assets from erosion in later years. For this reason and others, the aging of the senior population may well lead to a revival of life income gifts in coming years.