According to recently released Census Bureau projections, the U.S. population is aging faster than previously expected — and the implications are enormous.

Although the latest census forecast still says the number of Americans 65 and older will double over the next 30 years to 80 million, the government now believes the under-65 crowd will grow more slowly than estimated four years ago.



(MORE: Why We Live Longer — and Can Still Live Better)

A Higher Share of Older Americans

As a result, there will be a slightly higher proportion of older people in the United States than anticipated. This accelerated pace of aging makes it even more urgent that individuals and government officials prepare for the coming population shift.

Some of the most important personal decisions that will be affected include choices about work, living arrangements, caregiving for older relatives and financial matters concerning retirement. Policymakers will need to consider how the faster pace of aging further threatens the financial viability of Social Security and Medicare.

The nation will be affected in significant ways due to an increasing number of retired Americans and relatively fewer young people paying taxes and earning money to support themselves and their families.

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Yet most individuals and communities are ill prepared for the practical aspects of living in a society where more than 1 in 5 people are over 65.

FIGURE 1

U.S. Population Aging Faster Than Previously Expected

% of population age 65 and over

A Small Change That Really Matters

Here are the specifics:

As a result of the relatively slower growth of the under-65 population, the percentage of Americans 65 and older will increase from 13 percent in 2010 to 21 percent by 2040. The projected 2040 share of the older group is up one percentage point from what the Census projected four years ago.

That one-point increase may seem small, but the underlying trend has important implications, since any changes relating to the nation’s working-age population are significant.

Currently there are about five “working-age” Americans (age 18 to 64) for every person 65 or older. According to the new projections, this 5-to-1 support ratio will slip to less than 3-to-1 by 2030. This drop means there will be many fewer people paying taxes for every person receiving Social Security and Medicare. So the financial burden of old-age benefits will fall on fewer and fewer people.

The declining proportion of working-age citizens also raises questions about how economic growth and well-being can be sustained with slower growth in the U.S. labor supply.

According to the new Census Bureau projections, the U.S. population will grow from 309 million in 2010 to 400 million by 2050, 39 million fewer than the level projected four years ago.

(MORE: Surprising Reasons Boomers Are Working Longer)

3 Reasons Why the Projections Changed

Several trends and assumptions account for the lower forecast: the Census Bureau now expects fewer births, fewer deaths and less immigration.

The projection of a smaller number of total births reflects a continued drop in fertility from today's 2.0 births per woman to 1.93 by 2050.

Some of the recent reduction in fertility rates stems from the recession and may be temporary. But the long-term projections of a continued downswing are consistent with global economic and cultural trends. The expectation that there will be fewer immigrants also plays a role, since immigrants tend to have more children than native-born women.

The lower projected death rate stems from new assumptions of a slightly longer life expectancy at birth and at age 65 than in the 2008 forecasts.

Based on already slowing immigration during the end of the last decade, the Census Bureau predicts that net international migration will increase to an annual level of 1 million by 2024, followed by a small, gradual increase to 1.2 million by 2050. (These projections do not take into account any changes in U.S. immigration laws that are now being considered.)

Knowledge of these changing trends should prepare individuals to more effectively question their policymakers about proposals for adapting to an aging population.

Data sources: U.S. Census Bureau, National Population Projections, August 2008 (NP2008) and December 2012 (NP2012)

By Adele Hayutin Adele Hayutin is senior research scholar and director of demographic analysis at the Stanford Center on Longevity . Previously, she was chief economist of the Fremont Group, senior real estate analyst at Salomon Brothers and director of research at RREEF.

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