Mining the Wealth of Americans Over Age 50

By shattering the myths of aging, direct marketers are putting together profitable new strategies for success. For example, age 50 used to evoke the image of someone turning gray and turning off to life. After all, life expectancy at the turn of the 20th century was only 47 years. As we approach 2000, it has soared to 80, according to the National Academy on Aging.

Direct marketers have long coveted the considerable discretionary dollars possessed by teens and 20-somethings. We've also targeted the family-oriented needs of adults in their 30s and 40s. But the industry's new opportunities will follow the path of an aging America. The demographics, psychographics and economics are far too powerful to ignore. Consider these key factors:

Fifty and older is the dominant demographic. Between 1995 and 2010, the 50-plus population will grow by an astonishing 41 percent. Between 1990 and 1998 alone, Americans age 50 to 59 grew from 21.8 million to 27.6 million, according to the Census Bureau. Right behind them are 40.3 million of their younger brothers and sisters age 40 to 49, an increase of 27.7 percent over 1990.

Fifty isn't old anymore. Sheer numbers alone are impressive, but direct marketers have even more reasons to value graying Americans. If you saw Mick Jagger perform during the Rolling Stones' last U.S. tour, you know that 50-plus has a whole new image. Direct marketers of everything from health and beauty products to fitness equipment to clothing will find exciting new opportunities in this demographic if they rethink what it means to be 50.

Fifty doesn't mean downscaling life. Improved medicine and more positive attitudes regarding health and health care have provided Americans age 50 to 60 with far better health than previous generations. We'll see a greater demand for golf courses and all the equipment, clothing and teaching aids that accompany them -- as well as senior softball leagues, tennis facilities and educational programs. They'll travel more and in many different ways. Some will go to resorts and take luxury cruises. Many will choose bicycle tours through exotic countries and river rafting -- vacations their parents would never have considered as either appropriate or practical.

Fifty represents unprecedented wealth. While downsizing has wounded many Americans in their 50s and 60s, our robust economy has enhanced the cash flow and estates of millions more. Men and women 50 and older have poured massive amounts of money into mutual funds. And while they often face the problem of supporting aged parents, millions of 50-plus Americans already are beginning to inherit sizable estates from parents who achieved financial success during the post-World War II era. In spite of government and media concerns, much of the current 50-60 market and the cohorts behind them will see Social Security as playing only a secondary role in retirement. Direct marketers of financial services will help a growing population of affluent retirees maximize investment income to support unprecedented levels of consumption.

The myth of homogeneity. It may appear from what I've written that everyone in the 50-plus demographic is the same. But gray hair probably is the only factor that unifies them. Direct marketers must consider the variety of life stages and diverse attitudes that form varied segments in the mature market, including:

Leading-edge boomers (50-60): Americans just preceding the boomers into their 50s and the first boomers reaching the half-century mark -- as has President Clinton -- are at the peak of their careers and earning power. Even with college expenses, they enjoy considerable spending power. Their incomes may dip with retirement, but they'll see children graduate and mortgages get paid off.

Preretirees (50-60): These men and women are shifting their thinking toward life after careers, and are actively planning investment strategies and real-estate purchases for new primary homes and/or vacation homes to pave the way. Their assets will increase impressively between now and retirement.

Early retirees (50-60): While the previous group is planning to leave their careers behind, these folks already did it. Some are financially independent. Others are cashing in on early retirement or employer benefit packages spurred by downsizing and are creating part-time careers to augment their retirement income. At the same time, many people in these two groups are devoting time to community organizations and politics, traveling or combining these activities with work or consulting as they restructure their lives.

Young elders (60-70): True, members in this group are slowing down a bit, but they are increasingly taking advantage of good health to pursue their hobbies and travel. Many continue to work to stay active as well as maintain substantial levels of disposable income. Most enjoy doting on their grandchildren with gifts.

Active elders (70-80): Here's the real demographic surprise. People are not only living longer, they're generally living better. It's amazing how many elders are not only filling cruise ships but traveling at home and abroad with groups like Elderhostel. Understanding their mortality, they're also focused on making their children's and grandchildren's lives easier through cash, gifts and trusts.

Sunset elders (80-95+): Spending wanes as elders face declining health and activity levels, but don't be fooled. In their final years, they'll shift their purchasing patterns to provide for their children and grandchildren. Direct marketers recognize that this segment has needs that can be reached through their 50-plus children who frequently become caretakers/consumers for them.

As you can see, these demographic segments often overlap. And the health, lifestyles and financial positions of people within the same segment may vary greatly. Take cruise travel, for example; direct marketers must create different strategies to reach 60-year-olds who still work and want shorter cruises and those who are retired and have time for longer trips. Marketers of financial services to 70-year-olds will find some young and active elders who are more concerned with maximizing their income while others wish to conserve and grow their estates for their children and grandchildren.

Changing life experiences. Over the years, the behaviors of specific cohorts has changed significantly. Americans who grew to adulthood during the Depression and who turned 50 in 1960 or 1970 generally revered thrift and often passed up major expenditures even with money in the bank. Boomers now 50 grew up when jobs were plentiful, careers were secure and lifestyles reflected a prosperous country. They became an "I-want-it-all" generation. They survived the 1960s and 1970s, became money-conscious in the 1980s, and have seen their investments soar in the 1990s. They spend money with a confidence their parents never had and will continue to do so.

Defining a specific target group's expectations, lifestyles, psychological profiles and hot buttons makes all the difference. Given the diversity of the 50-plus market, that takes effort. But given the sheer numbers of people and dollars, it can pay off handsomely.