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Silver Tsunami of aging Alaskans has Economic Benefits

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Published in Anchorage Chamber News
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When we hear phrases like “Alaska has an aging demographic” or “seniors are Alaska’s fastest-growing demographic,” we don’t always translate that into the positive economic impacts that seniors are providing for Anchorage.

The population of seniors in our state is growing faster than the rest of the country. Baby boomers are growing older and joining the already-existing senior population in Alaska; the number of seniors grew by 58 percent in Alaska in 2011 alone. There are now more than 104,000 seniors over age 65 contributing to local economies in Alaska, making seniors one of the state's top economic engines. In 2012, the economic impact of Alaska seniors on the economy was almost $2 billion.

It was just a few decades ago that retirement meant leaving Alaska, and the term “snow bird” was commonly used to describe retirees. That's not the case today as more seniors are staying in Alaska to enjoy their golden years. While the overall out-migration rate is 7 percent, the number of seniors leaving Alaska is 4 percent.

One reason that Alaska is a great place to retire is because there are tax advantages compared with other states. With no state sales tax or state income tax, Kiplinger recently ranked Alaska as the best place to retire in America. In addition, there are more senior support services such as housing, increased health care access and businesses that cater to the senior market with techniques such as wider aisles, larger print and walker-friendly ramps. There are also stronger advocacy groups for seniors, such as the Alaska Commission on Aging, the Older Persons Action Group and, in Anchorage, the Senior Citizen Advisory Commission.

But we have more work to do to help keep seniors strong, healthy and independent.

One of the key economic barriers is the challenge of assisted living and nursing home costs. Alaska continues to have the highest nursing home costs in the country, at $701 per day or $255,891 per year in 2013. For assisted living, the average cost is $72,000 per year compared with the national average of $41,000. While this has spurned growth in the health care industry for personal health aides and nurses, at the end of the day the financial impact on seniors is significant.

One positive trend when it comes to the cost of retirement housing is the number of seniors electing to stay in their own homes. With the Municipality of Anchorage offering a senior citizen tax exemption, the rapid growth of home health care services and more moderate winters, seniors are finding it more beneficial to remain in their own homes. Almost 80 percent of Alaska seniors are living in their own homes, and that number will stay high as more seniors remain in state.

The increasing population of seniors also comes with benefits for the business community. Nationally, 20 percent of retirement income is spent on dining and entertainment, followed by 13 percent on transportation. That percentage is significantly higher in Alaska, as Anchorage ranks second in the country for the highest percentage of income spent on eating outside the home. Local health care providers are also benefiting from Alaska’s aging population. According to U.S. News and World report, seniors aged 65 to 74 spend about 12 percent of their annual income on medical expenses, while that number rises to an average of 18 percent for those over 75.

There are also the employment and volunteer contributions by seniors. In 1990, 12 percent of seniors were in the workforce. In 2010 the number had grown to 22 percent. Seniors also provide formal and informal volunteer work worth an estimated $31 million per year to the economy, providing helping hands and mentorships.

For seniors as well as our local economy, the future is bright. Seniors spend a larger portion of their income locally than not, supporting small business and strengthening Anchorage’s economy. The silver tsunami is here. The growing senior population will continue to create jobs from retail to health care, and their role as an economic engine will only get stronger as Alaska continues to age.

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