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MARKETING TO OLDER AMERICANS

December 8, 2014

As many of you know, I have done a ton of consulting in the retirement community industry. I am also one of the owners of several national and regional websites aimed at seniors looking for a place to retire in America. That’s why I found this research, shared by the American Consumers Newsletter, important for 2015 senior marketing.

There are six types of households headed by Americans 65 or older, based on their spending patterns, according to the Bureau of Labor Statistics.

(1) BASIC NEED-MEETERS (26.9%) The largest and poorest cluster, this segment had an average income of $33,124 in 2010-11 and spent just $23,679. Because of their limited resources, Basic Need-Meeters must devote the largest share of their spending to essentials (43 percent).

(2) HOUSING BURDENED (25.9%) Fully 78 percent of households in this cluster are still making mortgage payments compared with only 23 to 34 percent of households in the other clusters. Consequently, the Housing Burdened devote the largest share of their budget to mortgage (or rent)–fully 42 percent of their spending versus only 5 to 17 percent in the other clusters.

(3) HEALTH CARE BURDENED (21.1%) The second-poorest cluster, this group is defined by its outsized out-of-pocket health care spending–or 27 percent of its $29,818 overall spending. Other groups devote only 10 to 12 percent to health care.

(4) TRANSPORTATION BURDENED (12.1%) Although this group spent a relatively large $44,245 in 2010-11, it had to devote a hefty 33 percent of that to transportation. Fully 60 percent of this group lives in smaller cities of the South and Midwest. I suspect this is the RV and snowbirder crowd.

(5) HAPPY RETIREES (6.3%) This is the richest group, with average annual spending of $54,813. They devote fully 31 percent of their budget to “expendables” (entertainment, travel, and household operations). The average income of Happy Retirees and Balanced Budgeters is about the same, but Happy Retirees are bigger spenders.

(6) BALANCED BUDGETERS (5.4%) This group is almost as affluent as Happy Retirees, but it spends less ($47,920 versus $54,813). They devote about an average amount to various budget items, which is why they are considered “balanced.”

Bottom-line:Happy Retirees and Balanced Budgeters are primarily the seniors that can afford retirement communities and are you top consumers… and they represent less than one out of five; not as large as you would expect.

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