Older Americans Are Boosting the Economy for All

“People aren’t just living longer,” says Debra Whitman, AARP’s chief public policy officer. “They’re working longer.”

Numbering 54 million, workers age 50 and up account for about a third of the labor force. Notably, the share of 65 and older has nearly tripled over the past 25 years. And the share of adults who are 75 and older in the workforce is expected to double by 2060, according to the report.

“Some people are working longer because they love their job and they want to work longer. They find value in the work they do,” Whitman says. “Yet, others are working longer because they have to. They need to work in order to make ends meet.”  

Although many older adults are working longer by choice or necessity, the report notes that some leave the labor force earlier than intended due to health issues, caregiving responsibilities and age discrimination. “We need to continue to support older workers,” Whitman says. “They are actually helping to grow our labor force and keep our economy strong.”  

An engine of economic growth

Countering the perception that an aging population strains the nation’s finances, the report shows that older adults’ contributions are a major driver of the U.S. economy and are becoming more so.

Older adults’ $12.5 trillion in economic activity accounted for 43 percent of U.S. gross domestic product (GDP) in 2024, up from $8.3 trillion (40 percent of GDP) in 2018. Economic activity generated by this age group in 2024 indirectly supported 98 million jobs, about 46 percent of all U.S. employment.

In particular, older adults have been driving job creation in the health care and financial services sectors. And older adults are a major source of government revenue, paying $1.4 trillion in federal income taxes — nearly 60 percent of the total — in 2024.

However, the report notes that these economic contributions don’t mean financial security is universal among the 50-plus population. About one-third of older adults live in poverty or are at risk of falling into it, according to AARP Foundation, which operates and funds programs to combat poverty and build financial resilience in the older population.

“The [report] findings also make clear that many people are making those contributions while navigating real challenges of their own,” Minter-Jordan says. “Longer lives can bring opportunity and purpose, but they can also expose the pressures and inequities that make it harder for people to remain healthy and financially secure.” 

Longer lives are changing spending habits

Households headed by someone 50 or older account for more than half of all consumer spending in the U.S. — $10.7 trillion in 2024. This share of consumption has been stable since 2018 but is expected to jump sharply as millennials start turning 50 in the early 2030s. By 2060, spending by older households is expected to reach $22 trillion and account for more than 61 percent of total consumption.

The majority of older adults’ budgets go toward health care, housing and leisure. Health care spending by those 50 and older, which was $2.7 trillion in 2024, is expected to more than double by 2060. And as more adults aim to age in place, spending on housing is shifting toward home modifications and safety upgrades that allow them to remain independent. 

Among adults 75 and older, medical costs account for one-third of their spending. And this age group has seen a 12 percent increase in housing expenditures since 2018. “Rising housing costs are pushing some older adults toward cheaper areas with more limited access to health care, transport, fresh food and social infrastructure,” the report says.

The area that has seen the biggest increase in spending among older adults is technology. Since 2018, spending on communications and electronics by the 50-plus population has jumped 62 percent. In particular, demand for technology that helps older adults age in place and supports their health and wellness has been growing. “Venture capital and corporate investment are gradually responding to this signal,” the report states.

Unpaid contributions provide hidden economic benefits

Beyond their contributions as workers, taxpayers and consumers, adults 50 and older are providing vast amounts of unpaid support through caregiving and volunteering. “If we had to pay for all of the time and help that older adults are giving to each other, to their kids and grandkids, to their community, it would be $1.2 trillion,” Whitman says.

Adults 50 and older provided more than 29 billion hours of care to adults and 28 billion hours of care to children in 2024. They also provided more than 6 billion hours of volunteering. “Such efforts often substitute for services that would otherwise fall to overstretched health and long-term care systems, childcare providers or public budgets,” the report states.

Older adults also do the bulk of charitable giving — $111 billion in 2024, accounting for 70 percent of all donations. However, charitable contributions per household have declined slightly since 2018, especially among households with adults ages 55 to 64, who increasingly juggle competing financial demands like saving for retirement, supporting children and caring for aging parents. In fact, households headed by adults 50 or older contributed $13.1 billion in 2024 to family members attending college.

Planning with longevity in mind

The AARP report highlights that businesses, policymakers, nonprofits and communities need to adapt quickly to harness the economic potential of the older population and meet the needs of this growing demographic. 

It recommends that employers treat workers over 50 as a core component of the labor supply through age-friendly hiring practices, flexible schedules, targeted training and improved retention of older adults. The report suggests that policymakers create incentives to make older adults’ caregiving and volunteer activities financially sustainable. 

Broad-based solutions are needed to make housing better suited to allow Americans 50 and older to age in place, according to the report. And companies should explore new technologies that can help older adults while being affordable for all income levels.  

“The decisions we make now will shape not only how we age but the future strength and resilience of our economy and society,” Minter-Jordan says.