There’s a catch for America’s lowest unemployment rate in 50 years: It turns out to be a trillion-dollar industry. Is he Baby Boomer Retirement Wave.
On Friday, May 3, the Bureau of Labor Statistics reported that the unemployment rate fell to 3.6%. That’s the lowest since it hit 3.4% in 1959.
While it’s great news and a sign that the economy is doing as well as ever, some economists were quick to point out that it was too good to be true.
According to Market ClockUnemployment fell simply because the workforce fell by half a million people, and it has fallen more each month since January. Fewer Americans participate in the workforce, so they are not included in the unemployment calculation.
The unemployment rate was 3.8% in March, and it turns out that the 0.2% difference represents Americans who were looking for work but then chose to retire. Here’s a look at the workforce in recent months, the percentage of people between the ages of 16 and 64 who are employed or looking for work. You can see that the participation rate has been dropping steadily.
But there is a more important reason behind this, and it could make you rich.
The US Census Bureau projects that by 2030, all Americans born between 1946 and 1964 will be age 65 or older. Boomers will have reached everything retirement age.
Kiplinger says it is the first time in human history that those over 65 will outnumber children under the age of five. The total number of boomers stands at 74.9 million. It is about twice the size of the Silent generation before, it was about 28.32 million.
In other words, Baby Boomer Retreat it is the reason for our dwindling workforce and lower unemployment figures. And it will also put a lot of pressure on the different retirement industries.
So, in a way, celebrating lower unemployment was a wrong start – we did nothing but grow old. No radical public policy movement or sudden revitalization of the working class is responsible. Once.
But what if there was a way to take advantage of the mere passage of time?
We’ve discovered one action that makes this more than possible, but first you need to know the scope of opportunity unlocked by this retirement boom. There are actually several profitable investment strategies to take with a catalyst of this size, because it affects so many people in different areas.
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Think about it: 29% of the workforce will disappear in the next two decades. But these people are not just leaving the workforce; they are going to retire. We will see an increase in health care and residential spending attributable to 21% of the US population.
And according Money.com, the average cost to cover a senior’s health care from retirement to death is $ 280,000. When you multiply that by 74.9 million, you are looking at a market that is worth more than $ 20.9 trillion.
But you’ll only get a slice of that if you invest wisely and in a timely manner. There are a variety of investments to consider if you want to get the most out of the retirement boom. And smart investors have already signed up for some of them.
We have three right here.
The first is a mutual fund popular with the aging population; however, it should be popular with anyone looking for a comfortable future retirement. After that, we’ll show you a stock that is seeing a more than 120% increase in revenue year-over-year (YoY).
Baby Boomer Retirement Shares, No. 3: Vanguard Dividend Growth Fund
The Vanguard Dividend Growth Fund (MUTF: VDIGX) is a mutual fund that focuses on high-quality dividend stocks.
The fund is well diversified in many top-tier stocks. These include stocks like McDonald’s Corp. (NYSE: DCM), Coca-Cola Co. (NYSE: KO), Microsoft Corp. (NASDAQ: MSFT) and Johnson & Johnson (NYSE: JNJ). But those are just a few of the top 10 holdings, accounting for 32.4% of the assets in the portfolio for a total of $ 35.85 billion.
Its sector with the highest investment is health, with 17.3%, which is important for constant long-term growth. Health care spending accounted for just 12.2% of gross national product (GNP) in 1990, but could grow as much as 43.7% by 2030, according to HealthAffairs.org.
Investors could turn to the Vanguard Health Care ETF (NYSE Arca: VHT) as an alternative, which invests exclusively in health actions. But the assets there currently add up to just $ 10.7 billion, and the fund is $ 167.58 per share. At $ 28.13, VDIGX is a much more accessible diversified option that maximizes dividends and profit potential.
The Vanguard Dividend Growth stock price has grown 157% in the last 10 years, from $ 8.98 to $ 28.13. Its turnover rate is around 23%, a solid compromise between active and passive investing for a portfolio that aims to maximize its long-term growth.
VDIGX is a fund that many seniors will want to invest in to cushion their retirement, so those hoping to retire on the slopes of the big boys Boom retirement they will do well if they invest now.
Baby Boomer Retirement Stock No. 2: Sales Inc.
A real estate investment trust (REIT) works like a share. A company that owns property can pay part of its income to shareholders, similar to a dividend. What are you doing Sales Inc. (NYSE: VTR) profitable is this REIT owns a total of 787 senior housing communities.
Morning Star projects 40% of people will enter a nursing home in their lifetime. And agree to LongTermCare.gov, the average cost of long-term senior care is around $ 4,000 to $ 7,000 per month.
Forty percent of 74.9 million is 29.9 million. Therefore, long-term care alone adds at least $ 1.4 trillion per year to the Baby Boomer Market. Demand for these properties will increase at an unprecedented rate over the next two decades.
Although Sales has experienced an oversupply of senior housing in recent years, Senior Housing News reports that demand is expected to increase to 3.2 million units by 2040.
Today, VTR sells for about $ 61.29 per share. It will probably be much longer after the next wave of retirements hits. But its growth won’t match this next investment, a healthcare stock that scores near perfect on our Money morning Stock VQScore™ system.
It is 4.15, which means it is an undervalued stock and its finances have it primed for a price breakout.
The best way to invest in baby boomers retirement
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About the Author
Mike Stenger, Associate Editor of Money morning at Money Map Press, he graduated from the Perdue School of Business at the University of Salisbury. He has combined his BA in Economics with an interest in emerging technologies by finding where technology and finance overlap. He is currently studying cybersecurity, AI, streaming, and the cloud.
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