The Future of AgeTech: Matching Life Expectancy Gains with Financial Security and Health Span Improvements
At Visible Ventures, we are focused on companies that create superior consumer experiences and the technologies that power them. With Americans living longer and the proportion of older adults in the U.S. population increasing, we see an opportunity to invest in technology serving the needs of older adults (50+) in the second half of their lives. In addition to technology that enhances the experience of older adults, there is growing interest in technology to slow the aging process and reduce biological age. In this piece, we explore how digitally native platforms and products will enable greater financial wellness, productivity, engagement, and independence for older adults over 50.
TLDR: Older adults are an overlooked consumer cohort with enormous spending power and unique needs that necessitate innovative tech solutions.
We believe now is the time to invest in the next frontier of AgeTech
In the United States, the once unattainable milestone of reaching age 100 is becoming more commonplace. In fact, half of today’s 10-year-olds are expected to live to age 104. As a result of life expectancy gains, the number of people aged 65 and older in the U.S. is expected to increase from 56 million in 2020 to 95 million by 2060, representing almost a quarter of the population.
Older adults, defined as individuals aged 50-plus, contribute significantly to the U.S. economy and represent an attractive demographic, accounting for 56% of consumer spending. With a longer life expectancy, older adults have decades to spend and tend to be more loyal customers, making them a naturally attractive market opportunity that many companies have mistakenly neglected. Increasing tech adoption by the older population makes it the right time to design products and services for this group, as they are expected to spend $108 billion annually on tech products by 2030.
Activity and investment in AgeTech, which includes solutions designed around the needs of the 50-plus demographic, have largely been in healthcare so far. At Visible Ventures, we believe new innovations in areas such as social, communication, productivity, and finance may represent the next wave of AgeTech. In this piece, we address three key areas of opportunity within AgeTech: financial wellness, new ways of working & lifelong education, and social engagement & independence.
How do we improve financial wellness?
Two of the greatest worries for older adults are running out of money and paying for their healthcare. Today, they face a growing retirement gap, stemming from rising healthcare costs, social security depletion, student loan debt, and the demise of pensions. As a result, a majority of American workers aren’t on track to retire by age 65 with their pre-retirement standard of living, and one-third of Baby Boomers have nothing saved for retirement.
Equally concerning is that older adults today are largely making decisions without professional guidance. As shown in the chart below, almost 60% of adults over 50 have not consulted with a professional of any type in the last five years. This demonstrates a need for democratized access to financial and retirement planning enabled by digital platforms. Retirable, for example, is an online retirement planning and advisory platform providing a personalized and affordable solution for older adults. Because women face greater inequality in income in the second half of their lives and tend to live longer than men, they are particularly in need of resources for financial management and preparedness.
Financial Advisor Used in the Last Five Years (Consumers 50+)
As adoption of technology continues to increase, older adults will require privacy and data protections to reduce incidences of fraud that impact their financial security. It is estimated that one in five adults over 65 have been victims of financial exploitation, which results in around $36 billion of losses each year. Data privacy is a major concern for older adults, and the AARP found that 34% of adults 50+ cited privacy concerns as a top barrier to adopting new technology. We believe that financial platforms serving the unique needs of older adults should make data protections and privacy a top consideration.
How do we support an aging workforce with new ways of working and lifelong education?
As a result of continued gains in life expectancy and the need to work longer to cover growing retirement gaps, we’ve shifted from a three-stage model to a multi-stage model for our productive lifespan. Rather than having one period of education in childhood, a sustained period of working in the middle decades, and retirement after age 65, we are now filling our lives with multiple careers, periods of retraining and continued education, and social and professional hobbies. The need and desire for older adults to stay in the workforce longer is reflected in the U.S. Bureau of Labor Statistics data showing higher percent increases in the labor force for older age groups since 2000. This trend is expected to continue in the next decade, with a staggering projected growth rate of 97% for the 75+ labor force from 2020 to 2030.
Percent Change in Civilian Labor Force by Age (2000–2030)
Even though many older adults want to stay in the workforce, it can be challenging for them to find work. One study found that more than half of U.S. workers over 50 were pushed out of their longtime jobs before they chose to retire. It is not surprising then that adults over 50 make up a significant portion of the gig economy and are pursuing entrepreneurship at higher rates than ever. Nearly one-third of gig economy workers (1099 contractors) are over 55 years old, and a survey in 2020 found that over 50% of rideshare drivers are over 50. Older adults will continue to seek flexible work options that leverage their existing skillsets to provide supplemental income.
As older workers stay in the workforce for longer, there is a growing demand for re-skilling, re-training, and education that will keep them employable. GetSetUp is an example of a company providing older adults with live classes and online communities, with classes focused on reskilling, upskilling, and re-employment. Career changes and continuously evolving technology demand lifelong education outside of the formal education provided in the first two decades of life. We are interested in new education platforms that serve the needs, interests, schedules, and budgets at evolving life stages.
How can technology drive greater social engagement and independence?
The idea that older adults are reluctant to adopt new technology is outdated, as older populations are exhibiting a strong desire to stay up to date with the latest technology. We are now at an inflection point, as the population over 50 today was the first generation to grow up with consumer electronics, computers, and the internet, and they are more technologically savvy than their predecessors. This is reflected in smartphone ownership and tech spending, as 83% of adults aged 50 to 64 and 61% of adults 65+ own a smartphone, and they spent $821 on tech on average in 2021.
Percent of Adults Owning a Smartphone and Tablet Computer by Age (2010–2021)
The preference of 90% of older adults to “age in place,” necessitates more technological innovation to reduce the burden on caregivers and enable greater independence. Advances in IoT, AI, AR/VR, voice technology, and robotics are generating a new wave of AgeTech to support aging adults in their homes. The introduction of IoT networks and interoperability improves product accessibility, creating an integrated suite of products for senior living. AI generates highly curated, personalized solutions, putting fewer demands on older adults. AR and VR are being used with physical and psychological therapy, improving strength and reducing social isolation. Voice technology, a key component of many smart home devices, provides hands-free options for support with daily activities, reducing the impact of physical limitations and the required time for learning new interfaces. Finally, there are vast opportunities for robotics to provide companionship, care services, and support with daily activities.
As we evaluate innovations in AgeTech, we are excited about technology that will support older adults’ daily living, including platforms for everyday assistance, smart home and remote patient monitoring, wearables, prescription management, mobility, and fitness. In addition to supporting greater independence, many AgeTech startups have found that the most popular services are ones that provide social connection. Considering that almost half of adults over 60 report feeling lonely, which has detrimental health consequences, there is a need for products and services that reduce social isolation and encourage social engagement.
What do we believe can be the potential characteristics of successful AgeTech companies?
Because achieving adoption and scale in the AgeTech space has been challenging historically, we believe certain factors may contribute to success. Having a simple and accessible design, incorporating personalization and segmentation, addressing data and privacy concerns, having a reasonable CAC, and avoiding a “double opt-in” problem with older adults and caregivers may allow companies to effectively meet the needs of the older population. We are excited about companies that are innovating around the needs of the older population with the right strategies to reach this consumer cohort in a way that is integrated within the broader tech landscape and society. If you’re building in this space, we’d love to hear from you.
Are you interested in new technology and platforms serving older adults? Reach out to us — we’d love to connect.
