Megatrends: Investing opportunities in the ‘Age of Aging’

Age isn’t just a number: It’s an investment opportunity. As the global population continues to skew older due to declining birth rates and increased life expectancy, the rising tide of older adults is quickly transforming the global economy.

Companies that cater to older consumers, whether helping people age in place or managing the largest wealth transfer in history, are poised for long-term growth. What trends are fueling this demographic shift? And where can investors tap into the long-term growth potential of an aging world? Here’s what to know.

By 2054, about one in six people globally is predicted to be age 65 or older, up from about one in 10 currently, creating a fundamental shift in how the economy functions. At least three long-term forces are driving this transformation.

1. Increasing longevity

Better health care, improved sanitation, and increased access to nutrition have helped increase average global life expectancy to 73 years, up from 32 years in 1900. In the US, average life expectancy is now 79 and is expected to increase to 83 over the next 25 years – and that’s before factoring in the role that artificial intelligence (AI) could likely play in accelerating drug discovery that could further boost longevity.

Average life expectancy is expected to increase in the US

Source: United Nations, Morgan Stanley Wealth Management GIO as of Jan. 13, 2025

2. Declining fertility rates

Globally, fertility rates have been trending down for decades and, in many countries, have dropped below the “replacement level” needed to sustain a stable population of 2.1 births per woman, on average. With fewer babies being born and adults living longer than ever, older adults will represent a larger slice of the overall population. To put it in perspective: Demographically, by 2050E the world could start to look like Florida, where residents ages 65 and older currently account for 21% of the population.

3. Increasing senior wealth accumulation

The longer people live, the longer they will likely hold onto their wealth. In the US, adults ages 55 and older control about three-quarters of all wealth, driven largely by home value appreciation and rising retirement accounts. This 55-plus group also accounts for about 40% of total disposable income and 30% of consumer spending.

Over the next 20 years, their wealth could pass to heirs, spouses and charitable causes, with an estimated $54 trillion first being transferred to widows. Since women, on average, outlive men and make most household spending decisions, their economic influence will likely continue to grow.

In the US, adults ages 55+ control about three-quarters of all wealth

Source: Federal Reserve, Morgan Stanley Wealth Management GIO as of April 16, 2025

The impact of an aging population will have ripple effects on how people live, how they work, what they buy, and how they manage their money. Investors can seek to get ahead of this shift by focusing on the sectors well positioned to help older adults live independently, extend their careers and manage the complexities of retirement and transferring wealth to spouses and heirs.

1. Aging in place

Many older adults want to remain in their homes as long as they can. But being independent doesn’t mean they can’t get a hand. Innovative technologies and services like smart home systems, meal and grocery delivery, telemedicine, and home maintenance services can help older adults stay safe, connected, and comfortable. Businesses that are able to develop and market technology that supports aging in place will likely benefit.

2. Senior housing

Even with better support for aging in place, a growing elderly population will also likely increase the demand for assisted living facilities, independent senior communities, and skilled nursing facilities. Morgan Stanley Research estimates that the number of residents in these facilities will likely grow from approximately 1.7 million currently to 2.1 million by 2030E. In addition, rising life expectancy means more people will reach an advanced age at which additional care is essential, increasing the likelihood of needing senior living support.

3. Working longer

More older adults are continuing to work and pursuing “second acts” during their typical retirement years to earn extra income, stay mentally engaged, foster their social connections, and pursue new career paths. Businesses involved in the gig economy and those investing in retraining are key investment opportunities that can support an aging workforce.

More older adults are continuing to work in their typical retirement years

Source: Bureau of Labor Statistics, Morgan Stanley Wealth Management GIO as of April 16, 2025

4. Wealth transfer

Over the next two decades, control over trillions of dollars will shift from husbands to their longer-living widows, potentially powering spending in female-dominated categories like apparel, personal care, and wellness.

The financials sector also stands to benefit. As women take on larger roles in financial decision-making, there is growing demand for greater representation in – and tailored services from – the financial advice industry. Firms that invest in recruiting and training female advisors, developing customized products, and improving financial literacy among women will likely be better positioned to retain and attract this client base.

More broadly, as people navigate the financial challenges of longer lifespans, firms offering integrated retirement products and planning services are poised to benefit, with additional revenues in the space potentially exceeding $400 billion by 2028E. Investors may want to consider asset managers with innovative products for both retirement saving and spending as well as wealth managers offering private-market access and using technology to deliver personalized advice to a variety of clients.

The source of this article, ‘Investing in the ‘Age of Aging,’ was originally published on Jun 9, 2025 by Morgan Stanley Wealth Management’s Global Investment Office.

CRC# 4536293  06/2025