As consumer sentiment remains low, is the ‘silver tsunami’ keeping the economy humming?

“That’s thanks to older Americans, who are helping to keep the economy from falling into recession,” columnist Conor Sen wrote Tuesday in a Bloomberg editorial. “They are less affected by labor market uncertainty, less likely to be struggling in the housing market (the average age of homebuyers is a record 56), and they will be recipients of the growth in federal spending.”

Older Americans and the “silver tsunami” at their backs are serving to provide “fuel to the economy at a weak point in the economic cycle, something we didn’t see as much in the mid-2000s or mid-2010s,” Sen added.

One metric he uses to measure this is the number of Social Security program beneficiaries. Last year, a record 11,200 people were turning 65 every day, according to data from the Texas Hospital Association. The daily average during the prior decade — and a frequently cited statistic by the reverse mortgage industry to illustrate market potential — was closer to 10,000 people.

“The number of Social Security recipients grew by about 500,000 back in 2005, before the baby boomer generation began turning 65,” Sen wrote. “In 2015, as the boomer retirement wave got underway, that had grown to 1.2 million. Over the past 12 months, we’ve seen the count expand by 1.8 million.”

While retirees who have started to take Social Security benefits often see a drop in income, the payments are additional income for some beneficiaries. Their retirements also fuel job openings, and even if hiring and firing activity is generally low, fewer firings are usually good news for workers, Sen added.

“Over the past year, we have added 1.9 million jobs and 1.8 million social security beneficiaries, for essentially a 1-to-1 ratio,” Sen wrote. “Thanks to Social Security, the U.S. is adding 150,000 new incomes every month on top of whatever new jobs are created.”

This, in turn, is helping to sustain consumption and economic activity even in a period of slower growth. And it’s bolstered by the common reality that many Social Security beneficiaries have income sources beyond their benefit payments.

“As of the third quarter of 2024, Americans 55 and older held nearly 70% of all household wealth, up from 65% a decade prior, according to Federal Reserve data,” Sen wrote. “As long as the housing and financial markets don’t plunge, that’s tens of trillions of dollars of assets either still earning income or available to be sold to support consumption.”