Public Policy Institute of California
“Graying in the Golden State”
Demographic and Economic Trends of Older Californians
By Sonya M. Tafoya and Hans P. Johnson
California’s population is aging rapidly. By 2030, one of
every three Californians will be over the age of 50, and the proportion
of the population that will be over 65 will have almost doubled
from 11 percent in 1998 to 17 percent. This tremendous increase
in the older population of the state will be driven primarily
by the large cohort of baby boomers who will be entering retirement
ages over the next few decades. Lower mortality rates will also
contribute to the aging of the state’s population.
Today’s older Californians are relatively well off. Poverty
rates are substantially lower for older residents than for other
age groups in the state, with only about one in ten living in
poverty. The primary reason poverty rates for older Californians
are so low is Social Security, which provides sufficient income
to lift many older Californians above the poverty threshold. The
majority of older Californians derive more than 70 percent of
their income from Social Security.
However, tomorrow’s older Californians are less sanguine
about the promise of Social Security. Only 35 percent of the baby
boomers in California believe that the Social Security system
will provide the benefits they should receive when they retire.
Changes in the marital status and labor force participation of
boomers compared to earlier generations also raise questions about
the ability of the current system to provide future benefits.
Surprisingly, despite their skepticism about Social Security,
boomers do not appear to be saving at higher rates than past generations.
Only about half of all jobs in California offer pension plans
or retirement benefits, a figure that has changed little over
the past 20 years and that is substantially lower than in the
rest of the nation.
Although the aging of the nation’s population has led to
widespread concern over the viability of Medicare and the Social
Security system, less attention has been focused on the state’s
ability to continue to provide services to a population that is
increasing at both ends of the age spectrum. Already, for example,
24 percent of the state’s Medi-Cal1 payments and about one-third
of the state’s Supplemental Security Income (SSI) payments
are directed toward older Californians, a figure that is likely
to rise as the state’s population ages. The primary demographic
challenge for California in the early 21st century will be to
find ways to satisfy the demands of an increasingly older population
while maintaining the financial stability of the government and
a desirable quality of life for all Californians.
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