BoA Report: Older Americans Now Central to US Economy
Forget niche markets: a new Bank of America report reveals the significant **older Americans economic role** as a central force in the U.S. economy. Explore their unique spending habits, wealth concentration, and the challenges faced by this powerful demographic.
A new report from the Bank of America Institute highlights a fundamental shift in the U.S. economy: older Americans are no longer a niche group but a central economic force. Driven by major demographic changes, the spending habits and financial health of this growing population are shaping the country's financial landscape in ways that affect everyone, from retirees managing their budgets to younger generations planning for the future.
The Demographic Shift: An Aging America
The United States is steadily getting older, and the economic impact is becoming impossible to ignore. According to the Bank of America report, the share of the U.S. population aged 60 and older reached 25% in 2025, a significant jump of nearly 10 percentage points since 1995. This trend is set to continue, with the U.S. Census Bureau projecting this group will make up nearly 30% of the population by 2055.
This demographic shift brings a major change in how people spend their time. Data shows that Americans ages 65 and older spend about 2.5 fewer hours per day working. They reallocate that time toward leisure, dedicating roughly two additional hours daily to activities like watching television. This fundamental lifestyle change directly influences where their money goes.
Senior Consumer Spending Habits
With more time for personal activities and different life priorities, older Americans have distinct spending patterns. Households led by individuals 61 and older tend to allocate a larger portion of their card spending to essentials like groceries.
However, it’s not all about necessities. The 61-to-75 age group also directs a greater share of their budget toward travel, including airlines and lodging. Conversely, older households generally spend a smaller share of their income on categories like restaurants and bars, gasoline, and clothing. These spending habits reflect a population with more time for home life and travel but less need for work-related expenses. As inflation and rising housing costs continue to pressure household budgets, these spending priorities become even more pronounced.
Wealth Concentration vs. Financial Challenges
The financial picture for older Americans is one of sharp contrasts. On one hand, this demographic holds an immense amount of wealth. In the second quarter of 2026, households headed by those 55 and older held nearly $140 trillion in net worth, which represents about 75% of the national total. Thanks to strong equity markets, this group’s net worth has surged by over 20% in the last two years alone.
On the other hand, this wealth is far from evenly distributed. Many seniors face significant financial pressure from high healthcare costs and the constraints of a fixed income.
- Census data reveals that about 14% of seniors who receive Social Security rely on it for more than 90% of their income.
- Debt is also a growing concern. In the second quarter of 2026, serious credit card delinquencies for Americans 70 and older reached 6.3%, the highest rate recorded since 2011.
- During the same period, homeowners continued to tap into their home's value, with HELOC balances rising for the 17th consecutive quarter.
Nuanced Post-Pandemic Trends
Consumer behavior since the COVID-19 pandemic reveals more about the priorities of different age groups. When it comes to dining out, households in the 61-75 age bracket are closing the spending gap compared to the general population. However, those 75 and older have not returned to restaurants at the same rate, suggesting the pandemic may have had a more lasting impact on their habits.
Travel spending tells a similar story. While both older age groups have increased their relative share of airline spending since the pandemic, their spending in this category remains below 2019 levels, indicating a cautious but growing return to travel.
Conclusion & Takeaways
As the population ages, the older Americans economic role becomes increasingly critical to the health of the U.S. economy. The data shows a powerful demographic that is both a major driver of wealth and, for many, a group facing significant financial strain.
For consumers, these trends are a reminder of the importance of long-term financial planning. Whether you are approaching retirement or helping manage an older relative's finances, it's essential to account for shifting spending needs, rising healthcare costs, and the potential for debt. Understanding the powerful Baby Boomer economic influence can help you prepare for a secure financial future in an aging America.
