The Role of Consumers Over 60 in the American Economy

In 2024 in America, the federal government disbursed 1.5 trillion dollars in pensions and benefits. By the end of 2024, the number of pension recipients in America was about 69 million.

Thanks to the retirement cycle, an average of 150,000 new jobs are opened each month in the United States, in addition to the new jobs created by the growth of the U.S. economy.

When talking about the pension system in America, one immediately thinks of the sustainability issue of the model, especially given the demographic trends [which, in any case, are more favorable in America than in other countries]. In this article, we momentarily set aside the financial aspect of pension payments and instead focus on the positive impact of the so-called Boomers on the American economy, and thus the role of American consumers aged 60 and over.

Currently, the labor market in America is showing signs of a [healthy] slowdown, the real estate market is still in a stagnant phase, with young Americans being priced out of the housing market due to unaffordable home prices, and interest rates on mortgages and loans remain high. Yet, economic data continues to paint a picture of resilience for the American economy: Consumer spending continues to rise, inflation in America is slowing, and hiring, though less than before, continues to fuel U.S. job growth.

All this is also thanks to Americans over 60, the so-called Silver Economy, which is helping to sustain the level of consumption in the American economy. Americans over 60 represent about 78 million consumers [out of a total of 334 million inhabitants in the USA], they are the least affected by labor market uncertainty, the least likely to struggle in the real estate market (the average age of homebuyers in America is 56), and they are the ones who will benefit from the increase in federal spending in terms of pensions paid out.
 

Pensions and Job Creation in America

In fact, the group of American consumers over 60 is actively contributing to sustaining the American economy. Let's look at the number of new jobs created over the years and the number of retirements:

• In 2024, every day 11,200 Americans turned 65, a record compared to a daily average of 10,000 in the previous decade. 
• Between 2004 and 2006, the United States created 6.6 million jobs and 1.3 million new retirees, with a ratio of 5 to 1.
• Between 2014 and 2016, the United States created 8 million jobs and 3.5 million new retirees, with a ratio of 2.3 to 1.
• In 2024, finally, the American economy created 1.9 million jobs against the creation of 1.8 million new retirees, with a ratio of about 1 to 1. 

It is true that retirees who start receiving pensions typically earn less than when they were working, but from a macroeconomic perspective, this constitutes additional income, and retirement also creates job vacancies or, given the current labor market situation, prevents layoffs of younger workers.

A labor market with "few hires and few layoffs" is not ideal, but the fact that there are few layoffs is still good news. An economy where most people are employed but where access to credit to buy a home is difficult and where the job market begins to slow is still better than an economy where millions of people are laid off.
 

Consumers 60+ and Household Wealth in America

Moreover, Americans over 60 hold the majority of the country's wealth. In the third quarter of 2024, Americans aged 55 and older held nearly 70% of the entire household wealth in America, up from 65% ten years earlier [Federal Reserve data]. This involves tens of trillions of dollars in financial and real assets that generate income or can be sold to support current expenses and, ultimately, consumption.