According to the 2000 Census, older adults-people aged 55 or older-make up 21% of the U.S. population. Older adults are the best customers for some goods and services. They spend more than other age groups on health care, and on lawn and garden services, for example. Older adults can also be persuaded to boost their spending in some sectors, such as entertainment and dining out, if products and marketing campaigns are tailored to their preferences.

Today's older adults are not a particularly good market for some items, however. Relatively few have decided that they need all of the latest high-tech gadgets, for example. But this is likely to change in coming years as the Baby Boom generation joins the older adult age group and brings its unique outlook and preferences. This effectively gives businesses the opportunity to begin rethinking their approach to marketing to older adults.

This report examines the demographics and lifestyles of people aged 55 or older. It also examines their spending patterns across all of the major spending categories, using data from the Consumer Expenditure Survey conducted by the Bureau of Labor Statistics.

Population numbers for both individuals and households presented in this report come from two separate sources: the 2000 Census and the Current Population Survey, which uses population estimates for 2000 that are based on the 1990 Census. While the 2000 Census data is more up-to-date and accurate, there is a limited amount of data from it currently available.

The Consumer Expenditure Survey calculates average spending based on two-week diaries kept by about 5,000 consumer unit reference persons, and interviews conducted throughout the year of a rotating sample totally approximately 5,000 people. Spending data from other sources, such as point-of-purchase data collection, may differ from that found here because of the methodology differences.

Consumer unit: All related members of a household, or financially independent members of a household. A household may include more than one consumer unit.

Family household: A household maintained by a householder who lives with one or more people related to him or her by blood, marriage, or adoption.