At Cowboy, as we explore opportunities for innovation, we examine economic, regulatory, and societal shifts for trends that have long term impacts on consumer and enterprise behaviors. The demographic shift in the US is one example currently reverberating across all of these areas.

Unpacking the Demographic Shift

One in six Americans is now 65 or older — and this demographic has grown 38% in the past decade, vs 2% growth of people under 65. Growth of the 65+ population is accelerating — there will be 50% more by 2050. These figures, influenced by declining birth rates, delayed pregnancies, and increased life expectancy, underscore the pressing need for our society to adapt.

As society ages, products and services need to evolve. Stereotypes about older adults being frail and resistant to technology are increasingly outdated as retirees are more active and use tech throughout more of their adult lives. The growing tech-savvy and dynamic aging population is a near greenfield for new solutions in fintech, healthcare, real estate, and longevity sectors..

Fintech Innovation for Now and When

Financial services for the aging population, from retirement planning to end-of-life considerations, are evolving. Despite the traditionally manual approach, changing laws, i.e. the repeal of notary requirements for wills in 49 states during COVID, enable digitization. This allows for more dynamic and personalized processes, moving away from the current clunky and one-size-fits-all offerings.

New opportunities arise due to the financial need changes entering retirement. For example, Boomers (born between 1946 and 1964) make up ~40% of small business owners, meaning their retirement without an exit plan affects not only them but also their employees and the broader economy. They also have a growing preference to age in place, impacting home supply and affordability for younger generations.

The Great Wealth Transfer, involving $78.3tn of the nation’s $140tn held by Boomers, is reshaping wealth management. As younger consumers and more women (who often outlive men) become decision-makers, AI will play a key role in hyper-personalizing wealth management. By leveraging financial and behavioral data, it aims to optimize returns and address the unique financial needs of individuals.

With these trends, there are opportunities for innovation tackling:

• Digitized financial products with better user experiences for the needs of the aging population. These can provide straightforward services to those with more complex or uncertain financial pictures.
• More personalized wealth management that addresses the demands and needs resulting from demographic shifts as money changes hands
• Unlocking the assets and wealth accumulated by Boomers, whether it’s in real estate or businesses or other illiquid but valuable stores of wealth.

Healthcare & Longevity: A Costly Family Affair

The average couple spends over $300,000 on healthcare throughout retirement, with challenges in how we manage, plan for, pay, and think about our health as we age. Medicare costs are rising as a greater portion of the population depend on it while out-of-pocket expenses for chronic conditions, long-term care (LTC), and preventative care continue to increase at unsustainable rates.

LTC is especially challenged with labor shortages, poor quality of care, and high costs, creating a dire need for viable care options (home or nursing facilities). Healthcare often becomes a family burden, leading to exits from the workforce or increased debt to cover care costs. Long-term care recipients are likely to outlive their money, transferring financial stress to their loved ones.

There are opportunities to support both consumers and healthcare providers / business focused on aging, including:

• Better tools and products to support nurses around scheduling, benefits, finances to improve work, communication, care and hopefully minimize shortages
• Improved software for facilities and businesses to operate efficiently and enhance the quality of care as many are run on decades old software (if at all)
• Reinvention of the LTC insurance product or another financial security product to protect the elderly and their children from the costly burdens of aging
• Tools to improve communication and management between caretakers and loved ones

Preventative care is taking center stage as individuals focus on health span over lifespan. Wellness spending per capita in North America, now exceeding $5,000 excluding medical spending, reflects a willingness to invest in health. Rapid demand for drugs like Ozempic, full-body MRIs, and health monitoring wearables highlights a willingness to spend on discretionary healthcare. However, access to such services varies based on wealth, posing a risk of heightened health disparities. This creates an opportunity to create more affordable preventative care options and tools to improve the affordability of out-of-pocket spending.

Silver Spend is Where the Money is

As retirees today are in more control of their health, they are more active than ever. This activity is reflected across sports (i.e. the growth of pickleball), social activities, travel, and spending. Americans aged 65 and older account for the largest and growing share of consumer spending. As they enter retirement, they have less debt, the most home equity, and are the least susceptible to economic shocks, making them a more consistent consumer. Yet, consumer tech innovation has predominantly targeted Millennials and Gen Z, leaving a gap for the aging population.

For example, AARP, a longstanding consumer go-to for financial and health education and products, goods, and services, is long overdue for an overhaul to meet the needs of the modern retiree. However, the brand has a hold on the age group, with limited competition, and generates over $1bn in annual revenue.

There’s demand for aging software that provides:

• A new brand for today and tomorrow’s retiree
• Platforms that address desires and spending habits in digital and more efficient manner
• New consumer social platforms that help combat loneliness — in real life or online
• Software/tools for places that retirees convene or services they use (i.e., a YMCA), many of which still operate manually and in the pen-and-paper era

We see the aging tech (or Silvertech) space as one ripe for change over the coming decade. Demographics, economic and regulatory shifts combined with an increasing appetite for technologies create the perfect storm for technological innovation. Customer acquisition continues to be a significant hurdle in this space. However, as this age group becomes progressively tech-savvy and more focus is placed on this demographic, we believe this problem is something that can be solved.

We believe there’s a tremendous opportunity to revamp the entire aging journey by embracing the digital era with solutions that cater to the unique and dynamic needs of seniors. It’s not just about adapting, but thriving in the age of longevity. If you are building something or thinking about the aging tech space, we would love to chat! Reach out at @Jillian@cowboy.vc — we would love to hear from you!

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