Next week Warren Beatty will turn 70. It is an age when traditionally life should be relaxing, reflective and calm. But it is not panning out that way. Like millions of other elderly Americans, Beatty is not going gentle into that good night. In fact he was recently snapped leaving Los Angeles' notorious nightclub Hyde, a hot spot usually frequented by such youthful tearaways as Lindsay Lohan and Paris Hilton.

Beatty is the famous face of a social phenomenon sweeping America as its population becomes more and more dominated by the elderly. A quiet retirement is not for them. Internet dating website Match.com says its most lucrative demographic is the over-50s. It is clearly no longer about a home in Florida, pottering around the garden and a pension plan. It is now a story of new jobs, increased political power and a devil-may-care attitude to living life however one sees fit. They are redefining what it means to grow old in America.

The country is undergoing a demographic revolution as it ages and braces itself for the retirement of the postwar baby-boomer generation. It is a shift that will change the way America works and lives. The United States is about to become a society that increasingly exists not for the benefit of the young, but for the benefit of the old.

The facts speak for themselves. The boomers were born between 1946 and 1964. There are about 76 million of them and now each day 10,000 boomers hit their 50th birthdays. The leading edge of the generation has just started turning 61. As they grow old they are leaving behind a huge employment gap. Some firms are facing the retirement of up to 40 per cent of their workforce over the next decade. Yet the boomers are also creating new 'silver industries' designed to match their new needs. Advertisers and marketing firms are scrambling to catch up. No one quite knows what it all will mean, only that change is coming.

'It is going to change the way we do everything, absolutely everything,' said Bob Fell, director of strategy and planning at Varsity, a firm that advises companies on how to cope with this brave new Boomer world.

Across every aspect of American society, high-profile elderly people are having the time of their lives. Keeping Beatty company in Hollywood is Jack Nicholson. He, too, turns 70 in the next few weeks but has just starred in an Oscar-winning film and still fills the gossip columns by seducing women young enough to be his granddaughter.

It is not just men. Diane Keaton, 61, recently spoke of her love life in terms that sound as though they come from a teenager. 'I'm attracted to men and I love playing around them. But a life shared together? That's a different world,' she told More magazine. The New York Post called her a 'perennial bachelorette'.

It is not just in entertainment either. In journalism Barbara Walters still rules the roost at her ABC show, The View. She is 76. In politics Democrat Nancy Pelosi has just become the first female Speaker of Congress. She is 66. On the Republican side of the aisle, John McCain is a front-runner for the 2008 presidential election. He could easily win the race for the White House and become the most powerful man in the world. He is 70 years old, and most Americans do not care about his age at all. In the world of business, men like Viacom's Sumner Redstone, 83, run huge corporate empires with the verve of people half their age.

As the elderly grow in numbers and become more powerful, they are changing America in ways that go far beyond just health costs and social security payments. 'The landscape of American society has really changed. It is a whole new world,' said Professor Joseph Quinn, an economist at Boston College and author of Economic Implications of an Ageing Society

The elderly in America are now fuelling a housing boom as they seek to buy second homes in warmer climes. They are increasingly shunning any form of retirement - through need or choice - and taking on second jobs and new careers.

They are flexing their political muscles. The main group lobbying for the elderly, the American Association of Retired People, is one of the most powerful organisations in the country. It has 35 million members and an operating budget of $800m (about £408m) a year. Nor is it shy of using its power. It was instrumental in derailing President George W Bush's plans for social security reform and spent more than $20m on a campaign to do so. The reasons for America's ageing population are simple. First, despite all the headlines over an obesity crisis, Americans are healthier and longer-lived than at any time in their history. The second reason is the baby-boomers. The generational bulge born from the increased birth rate in the two decades after the Second World War is moving through into its twilight years.

That does not just mean an increase in numbers of elderly, however. It also means a different type of elderly person. 'They don't want to recognise the fact that they are getting old. They are going to go down fighting,' said Fell.

That might explain many of the strange things going on in American life. The huge popularity of such impotence drugs as Viagra means elderly people can enjoy reinvigorated sex lives. That in turn might show why plastic surgery for the over-sixties has tripled in recent years. Meals-on-wheels services are adjusting as the elderly shun old-fashioned meals in favour of muesli, other healthy options and vegetarian foods.

Fell's company, Varsity, makes a living from telling executives how to change their advertising to target the new elderly. He recently spoke to casino owners in Las Vegas. His message: out with the cheap bus tours, in with the razzmatazz and dazzle. Effectively, they should market to the elderly as they did to the young. 'The extent that they have to change almost shocks them,' Fell said.

The retirement of the baby boomers could even change something as fundamental as the five-day working week. As more and more elderly people keep working part-time or seasonally, the average American job could become a three days a week affair or just nine months of the year, allowing an aged employee the chance to still spend the summer months somewhere warm. 'Flexibility of employment will be the key,' said Quinn.

It could even change the structure of that most American of institutions: the road system. By 2030 an estimated 70 million US drivers will be over 65, making up a quarter of all drivers. Various government studies have pointed to the needs to change intersections and build more roundabouts to cope with the different driving habits of old people. The age of the boy racer is at an end. He is being replaced by his grandfather.

There is a downside to all this. Generations below the baby-boomers simply do not provide enough people to fill all the jobs being created by the American economy. That ensures that many elderly people will have to keep working whether they choose to or not: society cannot afford to have them retire.

Some experts believe that spiralling social security costs are already completely unsustainable. Social security and healthcare cost the federal government $1.034trn in 2005, more than twice the defence budget. By 2030 the costs could be as much as 75 per cent of the entire federal budget. Yet by 2010 there is expected to be a labour shortage in America of 10 million jobs. That problem could be filled by immigration. 'We have a safety valve in this country in that folks want to come and live here,' said Quinn. But immigration is a hot-button issue and it is far from certain that it is politically feasible to encourage cheap labour to move to the US. America is already building a wall on its border with Mexico to keep illegal immigrants out.

The other massive problem is the increased health costs and rising numbers of elderly diseases. Alzheimer's sufferers alone are rapidly increasing in numbers. There are five million with Alzheimer's in America, a rise of 10 per cent from five years ago. By 2050 that number is expected to triple.

But for the moment many Americans standing on the edge of their elder years are taking a leaf out of Beatty's book and embracing new opportunities. Sometimes they are completely unexpected. Take Jeanie Linders, 58. Inspired by the changes her generation of women baby-boomers was going through she began writing a musical based on them. She called it Menopause: The Musical. It had its debut in a tiny Florida theatre in 2001. Six years later, it is still playing to baby-boomer audiences in their tens of thousands. It has been staged in 18 different US cities and nine different countries.

Next week it has its premiere in London. Linders sees it as an example of continuing Boomer success and is adamant that ageing members of that generation are going to revolutionise America. 'We are blazing a new path. Women and men of my generation are reinventing themselves. We do not feel old. We don't know what old means,' she said.

Golden Oldies

· In 2007, 4.6 Americans turned 65 every minute. By 2025 it will be eight every minute

· In 1980, Americans over 50 years old comprised 25 per cent of the population. By 2050 they will make up around 37 per cent

· There are 76 million 'baby boomers' in America, those who were born between 1946 and 1964. They started turning 61 last year

· As fewer young workers enter the US workforce, there will be a labour shortage of 5 million people by 2010