7 Ways You Can Profit From the Baby Boomer Retirement Wave

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About 1 in 6 people in the United States is 65 or older, compared with just 1 in 20 back in 1920, according to data from the U.S. Census Bureau. The over-65 demographic is expected to grow to 22% of the population (more than 1 in 5) by 2050.

Learn More: 4 Genius Things All Wealthy People Do With Their Money

This dramatic shift in longevity is not only good news for those planning on living long lives, it’s also an investment theme. As the population skews older, spending patterns in the country shift, and this can translate into significant dollars and cents for companies in the right industries.

Here are some ways that you may be able to profit from the baby boomer retirement wave.

Healthcare

As people continue to live longer, It goes without saying that their needs for healthcare will increase. And with the high cost of healthcare in America, there’s a lot of profit to go around — profit that likely will continue to rise along with the aging population.

There are numerous ways to play the coming expansion in healthcare services. Pharmaceutical stocks are one, as are hospital companies and HMOs. Any type of medical facility, service or product that will cater to an aging population could show growing revenues and earnings over the coming decades. 

Senior Living

According to data from Mordor Intelligence, the senior living market is expected to grow from $112.93 billion in 2024 to $150.42 billion by 2029. That amounts to a 5.86% compound annual growth rate over the next five years. According to MI, rates may grow even faster than that over time, as older Americans are expected to grow faster than any other age group in the country over the next decade.

The easiest way to invest in senior living is via a real estate investment trust, which can pay handsome dividends based on growing cash flow. Other options include either direct or crowdfunded investment into actual real estate properties. 

Right-Sized Housing

If real estate is your investment of choice, you may be able to capitalize on the downsizing movement as boomers get older. One option would be to buy smaller single-family homes and either rent them out to boomers or try to benefit from an upswing in prices due to rising demand.

Another would be to look at condos, as many boomers will shed their larger single-family homes in favor of condos in which an HOA will do all of the maintenance work and upkeep. Again, these could be bought to capture rent from boomers or capital appreciation from rising demand for this type of property.

Leisure

Many, if not most, boomers intend to spend some of their hard-earned savings on leisure activities once they retire. These could range from cruise vacations to resort stays to airline trips and more. According to Mordor Intelligence, the leisure industry in general is expected to grow at a compound annual rate of 5.87% from 2024 to 2029.

Biotechnology

Biotechnology companies can be a bit more speculative than other types of stocks, but they also can offer a higher potential reward. This is particularly true with smaller biotechs, whose fate might rely on the ultimate success of just one or two drugs that are still under development. Larger biotechs, like Amgen, have more staying power, but they trade off the potential for explosive upside gains. Many biotechs stand to gain from an aging population as the need for cutting-edge products to treat diseases like cancer will continue to rise. 

Beauty Products

You may think of beauty products as the domain of the young, but it’s actually the older set that’s funneling money into some of the most popular brands. According to data from Great Britain, France and Spain, women over 55 account for more than half of all beauty sales.

Although in the U.S. it’s still the younger generations that spend the most on beauty products, if American boomers follow the lead of their European counterparts over the next decade, the shift could trigger a boom in spending.

Aging Population ETF

If you’re not in the position to spend the time or effort to research individual stocks or industries that could benefit from the boomer retirement wave, consider the Aging Population ETF, ticker symbol AGNG. This ETF invests in companies positioned to benefit from an aging American population through exposure to some of the industries listed above.

As of May 22, 2024, some of the fund’s top holdings include Amgen, AstraZeneca, Welltower, Alcon and Boston Scientific Group.

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