California is on the cusp of an unprecedented demographic shift, with projections indicating a dramatic increase in the older adult population by 2040.

The Public Policy Institute of California (PPIC) examined the state’s older population and its impact.

• Dramatic growth. By 2040, 22 percent of Californians will be 65 or older, up from 14 percent in 2020. The older population (aged 65+) will increase by 59 percent, while the working-age population (aged 20–64) will remain largely unchanged and the child population (aged 0–17) will decrease by 24 percent. This shift will result in an old-age dependency ratio of 38 older adults per 100 working-age adults, up from 24 in 2020, and the highest ever recorded.

• Culturally and linguistically competent care. The older adult population will become increasingly diverse, with no single racial or ethnic group constituting a majority. Growth rates will be highest among Latino and Asian older adults. A high proportion of Latino (60%) and Asian (85%) older adults will be foreign born, with about 75 percent speaking a language other than English at home. This increasing diversity will require culturally and linguistically appropriate services and a more diverse health care workforce.

• Support for older homeowners and renters. Seven in ten older adults are projected to be homeowners by 2040, slightly down from 73 percent in 2020. Some will be “housing rich, income poor.” The 27 percent who will be renters face greater financial burdens due to lower incomes and increasing housing costs.

• Workplace adaptations to support older workers remaining in the labor force. The share of older adults with incomes less than twice the federal poverty level is expected to decline but remain substantial at 22 percent in 2040 (down from 24% in 2000)—and given the large increases in the number of older adults, there will be about 600,000 more who are low-income in 2040. Labor force participation is projected to increase for those aged 65 to 74, especially among less-educated workers, possibly out of financial necessity.

• Expanded resources for family caregivers. Family connections will remain crucial, with 59 percent of older adults living with a spouse and the share living alone decreasing from 22 percent to 18 percent. However, challenges in independent living will persist. Among adults over 80, one in three will have difficulties staying in their homes without assistance, and one in five will experience self-care limitations.

• Meeting increased demand for Medi-Cal and home and community-based services. Despite a 51 percent increase in older adults in institutional settings, only 3 percent of the total older population is expected to live in such facilities. The vast majority are expected to remain in their own homes.

Story Date: February 10, 2025