An aging population presents many formidable problems, but also some promising opportunities. As of today, one in three Americans is over the age of 50. By 2030 one in five Americans will be at least 65 years old. As each year passes, four million people in the United States reach the age of 55.
Serious economic problems could arise when you couple this demographic shift with a massive healthcare funding gap, significant reduction in caregivers, and increased debt loads for seniors.
So how is this an opportunity? Enter the sharing economy.
The first problem is that many retirees are not even aware of the sharing economy. As my mother asked me last week, “What is the sharing economy?”
The term sharing economy is a bit misleading because, when boiled down, these online services are not really about sharing—they are about access. A person with assets is simply allowing access to those assets for a pre-determined fee. It is as simple as that.
This is not just a fad, but rather a fundamental shift in the way people consume.
One in every five American adults has earned some form of income in the sharing economy. A study by JP Morgan found that sharing economy workers boosted their income by 15 percent through this flexible work option.
This paradigm shift is global and all-encompassing. There are three major opportunities that the sharing economy presents for retirees.
Opportunity #1: Income Supplementation
In reference to the sharing economy, Forbes Magazine declared that this economic shift is "better for Boomers than Millennials." There are many reasons that this statement is worth noting.
One only needs to look at what seniors are already doing. According to Uber, a quarter of its millions of workers are over the age of 50, and more drivers are over 50 years old than under 30 years old.
The sharing economy is the embodiment of flexible employment, and that is clearly appealing to retirees looking to supplement income. Have a few extra hours today? Turn on your Uber app and take a few riders. Have a spare day next week? Schedule a handful of handyman jobs on TaskRabbit. Have a spare basement apartment or room in your home? Rent it out on Airbnb.
Opportunity #2: Aging In Place
The average monthly cost of an assisted living one-bedroom unit is $3,500. Now consider that the average income for those over the age of 65 is $31,000. So, the yearly cost of an assisted living facility is about $42,000, and the average retiree in the United States has a total income of $31,000. Additionally, more than 40 percent of people will need to stay in some form of assisted living facility at some point in their lives.
To illustrate how the sharing economy can help people live more independently, even in old age, I will share a quick story.
Unfortunately, Robbie’s wife of 43 years passed away last year, leaving him struggling with day-to-day activities. Robbie's grandson, Mike, is a regular at the website that I edit, Casual Capitalist, and began introducing his grandfather to online sharing-economy platforms. Mike believed that the sharing economy could help Robbie with his day-to-day activities instead of having to move him to an assisted living facility.
Today, Robbie lives at home and enjoys the following sharing economy services that help him age in place:
- Grocery delivery via Instacart every Friday
- Uber drives to, and from, medical appointments
- Uber drives every Saturday to Robbie’s favorite coffee shop to meet friends
- A TaskRabbit Tasker, named Jerry, on an irregular basis to help around Robbie’s home
Robbie is now a sharing economy pro, and this illustrates the remarkable opportunity the sharing economy holds for independent living.
Opportunity #3: Staying Social
One of the top three concerns of retirees is the fear of isolation. Certainly, no one wants to be alone in their golden years.
Older baby boomers account for a large portion of sharing economy workers. One of the main reasons that they work in the sharing economy, aside from income supplementation, is because it allows them to interact and socialize on a regular basis.
In addition to earning some extra money, working in the sharing economy exposes workers to both users and other providers. This is a treasure trove of socialization that allows sharing-economy workers to interact with other like-minded people.
Now, this opportunity is not as tangible as the other two, but it certainly will help promote and foster a healthy lifestyle among aging demographics.
The so-called sharing economy holds three significant opportunities for aging Americans. As this group continues to increase, the sharing economy can fill income gaps, independent living requirements, and the social needs of our aging population. Policymakers should welcome the sharing economy’s rise with open arms.
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