5 industries set for a baby boomer boom
Retirement can be big business.
And with the youngest of Australia’s baby boomers now turning 50, there is an opportunity to cash in on that generation.
Business information analysts from IBISWorld say younger people will find job opportunities as baby boomers – those people born between 1946 and 1964 – hang up their boots after years of working hard.
But they also believe there are five key sectors that stand to gain the most from retiring baby boomers.
IBISWorld Australia General Manager Karen Dobie says home ownership is higher among baby boomers than any other demographic.
And the family home is not counted in asset tests when it comes to claiming a pension – and upgrading helps drive the real estate sector.
“Currently, a retiree investing all of their superannuation into housing can access the pension, while another retiree opting to rent will have to live off their superannuation,” she says.
“This is encouraging those who do not own houses to purchase property and those that already do to upgrade to more expensive properties to stay under the asset limit.
As baby boomers age, demand will increase on health care and health care spending will rise.
IBISWorld figures show people aged 65 and over make up 35.9% of Medicare-subsidised diagnostic imaging revenue, with CT scans and nuclear medicine procedures especially geared towards older patients.
“This may lead to the government changing the way health care is funded, possibly by means testing,” Dobie says. “This will drive up the Medicare levy and lead to charges for services that are currently free. It could also lead to a refusal to fund expensive procedures and prioritising younger patients.”
IBISWorld analysts believe cruise ships and caravan parks will do particularly well out of baby boomer retirees.
The caravan park industry is tipped to grow 1.9% over the five years through 2013-14 to $1.4 billion, despite the number of camping grounds declining. And while older travellers make up 26.5% of the industry’s visitor nights, that figure is expected to grow in the next 10 years.
It almost goes without saying that residential aged-care facilities and retirement villages will benefit from the ageing population.
“We expect that the accommodation for the aged industry will be worth $6.9 billion in 2013-14 as a result of annualised growth of 6.4% over the past five years,” Dobie says.
Superannuation and changes to various financial services mean increasing numbers of baby boomers will be looking for help navigating their finances.
“Our ageing population will drive demand for financial services as superannuation funds become available. Baby boomers will also seek legal and tax advice to minimise superannuation tax, maximise pension incomes and prepare wills,” Dobie says.