With increased longevity, wide-ranging—and surprising—investment opportunities are opening up. Here’s where you can look for them.
THE WORLDWIDE POPULATION of people age 60 and older is set to more than double by 2050, and increasing longevity will transform more than health care. "Baby boomers represent a $15 trillion 'silver economy,'" says Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy. Beyond health care, Bartels and others foresee significant growth in:
1. Leisure. U.S. households headed by people age 50 and older have an average net worth of $765,000. Bartels believes that hospitality industry sectors—especially hotels and cruise lines—could benefit.
2. Wealth management. Members of the generation now reaching retirement age will pass along $30 trillion to their heirs, representing "a potential opportunity for the wealth management industry," says BofA Merrill Lynch Global Research's head of Thematic Investing, Sarbjit Nahal.
3. Senior living facilities. Retirement residences offering medical care, education, shopping and other services should flourish, says Nahal.
4. After-life care. One publicly traded U.S. corporation now runs 1,500 funeral homes and 450 cemeteries, while China and other emerging markets are showing a growing preference for Western-style funerals.
3 Questions to Ask Your Advisor
- Are there ways I can invest in these growth opportunities without risking my retirement security?
- Are there investment opportunities here that are consistent with my social values?
- Is my own financial strategy adequate to cover a longer life?