The National Opinion Research Center (NORC) at the University of Chicago is a respected, nonpartisan research organization that examines social and economic trends. In 2019 NORC released the original “Forgotten Middle” study, which projected how the number, demographics, health status, and financial resources of middle-income seniors would change over the following decade. NORC recently published an update to that study, which highlights worrisome trends for seniors who fall into the so-called “Forgotten Middle.”
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Who are the “Forgotten Middle”?
Medicaid covers long-term care for very low-income individuals, and high-income seniors can often self-fund a wider range of care and housing options. The “Forgotten Middle” refers to middle-income seniors whose annuitized income and assets (not including home equity) fell between $25,000 and $101,000 in 2018 dollars. These seniors typically have too much to qualify for Medicaid but lack sufficient private-pay resources to comfortably afford preferred long-term care or senior housing options.
To update their projections, NORC analyzed 2018 data from the University of Michigan’s Health and Retirement Study (HRS), a longitudinal survey of about 20,000 Americans over age 50. That data allowed NORC researchers to forecast the situation for people who were 60 and older in 2018 and therefore will be 75 or older by 2033.
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The challenge of more middle-income seniors
NORC’s analysis of HRS data reveals several trends that could strain families and senior services in the next decade:
- The number of middle-income seniors is projected to nearly double, reaching about 16 million adults aged 75 and older by 2033. This group will be more racially and ethnically diverse, with roughly 22 percent identifying as people of color.
- Many middle-income seniors will face health challenges that hinder independent living, including mobility limitations and cognitive impairment. A majority are expected to have three or more chronic health conditions.
- Reliance on paid care may increase because a majority of these seniors are projected to be unmarried (divorced or widowed) in 2033, and many will not have adult children living nearby to provide unpaid assistance.
- Without selling their homes, about three out of four middle-income seniors—roughly 11.5 million people—are likely to lack sufficient resources to pay for private, in-home assisted services.
- For most in this group, home equity represents 20 to 40 percent of financial assets. Many middle-income seniors are reluctant to sell their homes because they want to age in place, maintain a spouse’s residence, preserve a nest egg, or leave the home to children.
- Even if they access home equity by selling, more than a third of middle-income seniors (about 39 percent, or 6 million people) would still not have enough funds to cover assisted living costs.
These findings underscore that Baby Boomers entering retirement often have smaller savings than prior generations, are less likely to have pensions, and tend to have fewer children or be living solo. Those demographic and financial changes create both challenges and opportunities for the senior living sector.
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Innovative industry solutions
Despite pandemic-era supply chain issues, staffing shortages, and rising inflation, some senior living providers are developing lower-cost models and efficiencies aimed at serving the growing middle-market segment.
To reduce operating costs and lower resident fees, communities are trimming amenities that add significant expense. For example, some have replaced community-provided transportation with ridesharing that residents pay for as needed. Dining services are being simplified—offering more grab-and-go choices, limiting made-to-order meals, or providing one main meal plus lighter breakfast options similar to a hotel continental breakfast.
Staffing strategies include cross-training employees to perform multiple roles during a shift—such as serving in dining at midday and staffing the front desk at other times—to stretch labor resources without sacrificing core services.
Another emerging tactic is acquiring underused multifamily properties and converting them into affordable senior housing rather than pursuing costly new construction. This approach can reduce capital expenditures and accelerate availability. Other cost-conscious options include “continuing care at home” models and broader adoption of technology solutions that support remote monitoring, telehealth, and more efficient care coordination.
Combined, these measures can lower operating costs and make senior housing and care more affordable for middle-income residents while maintaining quality. However, NORC’s findings make clear that industry innovations alone will not fully resolve the gap. Policymakers, communities, families, and providers must continue to develop scalable financing, housing, and care strategies to meet the needs of the rapidly growing “Forgotten Middle.”