Elderly Care Industry Trends and Market Statistics

This article was written by our expert who is surveying the industry and constantly updating the business plan for a retirement home.

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The Dojo Business Team

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We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the retirement home and elderly care market.

What is the current global market size of the elderly care industry, and how has it evolved in the last five years?

The global elderly care market reached approximately $1.94 trillion in 2024 and has experienced consistent expansion over the past five years.

The industry has grown at an average annual rate between 6.5% and 8.4% globally from 2020 to 2025. This growth was primarily driven by a surge in the elderly population, rising prevalence of chronic diseases such as diabetes and dementia, increased demand for home-based care services, and significant advancements in medical technology that extend life expectancy.

The market's evolution reflects fundamental demographic shifts, with more people living longer and requiring specialized care services. Retirement home operators entering the market in 2025 are positioned to capitalize on this sustained growth trajectory, particularly as the baby boomer generation continues to age into the primary elderly care demographic.

The consistent growth pattern over the past five years indicates market stability and predictability, making the retirement home sector an attractive opportunity for new business ventures with long-term revenue potential.

What are the projected growth rates and revenue forecasts for the elderly care industry over the next decade?

The elderly care industry is projected to grow at a compound annual growth rate of approximately 6.8% through 2032, reaching $3.29 trillion.

By 2035, the global market is forecasted to expand further to $4.6 trillion, representing more than a doubling of the current market size within just over a decade. This trajectory makes the elderly care sector one of the fastest-growing industries worldwide, offering substantial opportunities for retirement home operators who establish themselves during this expansion phase.

The growth is not uniform across all segments. Technology-enabled care solutions are experiencing the most rapid expansion, with the technology component of elderly care projected to grow from approximately $10.7 billion in 2025 to over $46.7 billion by 2035. This represents a significantly higher growth rate than traditional care models and suggests that retirement homes integrating technological solutions will have competitive advantages.

For entrepreneurs entering the retirement home market, these projections indicate strong revenue potential over the next decade, with demand consistently outpacing supply in many regions and creating favorable conditions for new facility development and service expansion.

Which regions or countries are showing the fastest growth in elderly care demand, and what are their main drivers?

Asia-Pacific is the fastest-growing region for elderly care demand, with China leading at a projected CAGR of 12.4%.

Japan, already having a mature elderly care market with over 20% of its population aged 60 or above, continues to represent substantial market size despite slower growth rates. Thailand is experiencing rapid aging, with the country adding approximately one million new seniors annually and over 20% of its population already in the elderly demographic.

North America maintains the largest market share globally, accounting for over 43% of industry revenues in 2024. This dominance stems from established infrastructure, robust insurance programs including Medicare and Medicaid, comprehensive government support systems, and higher per-capita spending on elderly care services compared to other regions.

The main drivers in Asia-Pacific include rapidly aging populations due to declining birth rates and increased life expectancy, growing middle-class populations with disposable income for care services, government initiatives to expand long-term care insurance (particularly in China), and cultural shifts toward acceptance of institutional care options. In North America, drivers include the aging baby boomer generation, established payment mechanisms through insurance and government programs, and consumer preference for high-quality, amenity-rich retirement communities.

You'll find detailed market insights in our retirement home business plan, updated every quarter.

What percentage of elderly care spending is allocated to home care, nursing homes, assisted living, and technological solutions?

Home care services account for approximately 52% of elderly care revenues in 2024, making it the dominant segment in the retirement home and elderly care industry.

Institutional care, which includes nursing homes and residential care facilities, represents 30-35% of total spending. Assisted living facilities account for 10-15% of the market, serving seniors who need some support but not the intensive medical care provided in nursing homes. Technological solutions, including telemedicine, AI monitoring, and smart home technology, currently represent 2-5% of spending but are experiencing the fastest growth rate in the industry.

For retirement home operators, understanding this spending allocation is essential for positioning your facility within the market and deciding whether to focus on traditional residential care, incorporate significant home care services, or differentiate through technology integration.

What demographic shifts, such as aging population statistics and dependency ratios, are most directly influencing demand?

The global old-age dependency ratio is projected to rise from 17 elderly people per 100 working-age persons in 2021 to 29 per 100 by 2050.

This dramatic shift means that the proportion of elderly individuals requiring support relative to the working-age population is increasing rapidly. In countries like Japan and Thailand, over 20% of the population is already aged 60 or above, creating immediate and intense demand for retirement home services and elderly care across all segments.

The aging acceleration is most pronounced in East Asia, Europe, and North America. Regions like Thailand and China are adding approximately one million new seniors annually, while Japan's super-aged society continues to expand its already substantial elderly population. These demographic pressures are compounded by declining birth rates, which reduce the number of working-age individuals available to provide family-based care and increase reliance on institutional and professional care services.

The dependency ratio increase directly impacts retirement home demand because it indicates both a growing customer base and a shrinking pool of family caregivers. As the ratio climbs, more families are unable to provide adequate care at home due to work obligations and geographic distance, driving demand for professional retirement home services and creating favorable market conditions for new facilities.

This is one of the strategies explained in our retirement home business plan.

What are the main challenges faced by providers in meeting the rising demand for elderly care services?

Workforce shortages represent the most critical challenge facing retirement home operators, with recruiting and retaining skilled care workers proving extremely difficult.

The staffing crisis stems from multiple factors: low wages relative to the demanding nature of the work, high employee turnover rates that disrupt care continuity and increase training costs, physically and emotionally stressful job conditions, and insufficient prestige or career advancement opportunities in the elderly care profession. These workforce issues directly limit the capacity of retirement homes to expand services even when demand and funding are available.

Rising operational costs create significant financial pressure for retirement home operators. Expenses are increasing across multiple categories including labor costs (as facilities compete for scarce workers), regulatory compliance requirements, facility maintenance and upgrades, insurance premiums, and food and supply costs affected by general inflation. These rising costs must be balanced against pricing constraints, as many elderly customers have fixed incomes and limited ability to absorb large cost increases.

Affordability and accessibility challenges affect both providers and residents in the retirement home sector. Providers struggle to maintain financial sustainability while keeping services affordable, particularly for middle-income and low-income seniors who earn too much to qualify for full government assistance but cannot afford high-end private facilities. This creates pressure to optimize operations while maintaining quality standards.

Regulatory complexity continues to increase as governments implement new standards for care quality, safety protocols, resident rights, and reporting requirements. Retirement home operators must navigate evolving expectations from aging baby boomers who demand more amenities and autonomy than previous generations, while maintaining compliance with multiple regulatory agencies and adapting to policy changes that affect reimbursement rates and operational requirements.

Which technological innovations, such as telemedicine, AI monitoring, and robotics, are most widely adopted in elderly care today?

Telemedicine and AI-powered monitoring systems are experiencing the most widespread adoption in retirement homes and elderly care facilities in 2025.

Telemedicine enables remote consultations with physicians and specialists, reducing the need for transportation to medical appointments and providing faster access to care. The AI market in elderly care is growing at over 14% CAGR through 2030, with AI-powered monitoring systems tracking resident vital signs, detecting falls, identifying changes in behavior patterns that may indicate health issues, and alerting staff to emergencies in real-time.

Robotics are increasingly deployed in advanced markets like Japan and China to support multiple care functions. Robots assist with mobility support, helping residents move safely around facilities; medication reminders and dispensing to ensure treatment adherence; social interaction and companionship to reduce isolation; and basic care tasks that alleviate staff workload. While robotics adoption is currently concentrated in high-income markets with severe labor shortages, costs are declining and functionality is improving, making broader adoption likely over the next decade.

Sensor-driven smart home technologies and wearable devices are being integrated into both retirement home facilities and home care settings. These solutions include motion sensors that detect falls or unusual activity patterns, wearable devices monitoring heart rate and other vital signs, smart medication dispensers, emergency call systems with GPS location, and environmental controls that adjust lighting and temperature for comfort and safety. Adoption varies significantly by region and is influenced by regulatory frameworks, reimbursement policies, and consumer acceptance.

We cover this exact topic in the retirement home business plan.

What is the current level of government funding, subsidies, or policy initiatives supporting elderly care, and how are these evolving?

Government funding accounts for approximately 50% of long-term care financing in many markets, making public policy a major driver of the retirement home industry.

Major government programs include Medicare and Medicaid in the United States, which provide substantial funding for skilled nursing care and some assisted living services for eligible seniors. Long-term care insurance (LTCI) programs have been implemented or expanded in Japan, Australia, and China, creating structured financing mechanisms for elderly care services. These programs typically cover a portion of care costs based on assessed need levels, with beneficiaries paying co-payments or purchasing supplemental coverage.

Policy initiatives are shifting toward home and community-based care models, reflecting both consumer preferences and cost considerations. Australia's Support at Home program, launched as a major reform, consolidates previous programs into a single framework emphasizing consumer choice and flexibility in service selection. China is rapidly expanding its LTCI coverage to more cities and populations, creating a growing base of seniors with public insurance for retirement home services.

Government funding is evolving to emphasize several priorities: expanding access to home care as an alternative to institutional placement, implementing personalized care budgets that give seniors more control over service selection, promoting digital inclusion by funding technology adoption in care delivery, and adjusting reimbursement rates to reflect rising labor and operational costs. These policy shifts directly impact retirement home business models, as facilities must adapt to changing payment mechanisms and service expectations driven by government programs.

Retirement home operators should closely monitor policy developments in their target markets, as changes to government funding levels, eligibility criteria, and reimbursement rates can significantly affect revenue streams and profitability for facilities dependent on publicly-funded residents.

What role does private investment and insurance coverage play in shaping the elderly care market?

Private equity investment in the retirement home and elderly care sector continues to increase, driving mergers and acquisitions, operational consolidation, and business model innovation.

Private investment enables facility expansion, technology integration, and quality improvements that individual operators might struggle to finance independently. However, private equity involvement has also triggered regulatory concerns in some markets regarding affordability for residents, workforce conditions and wages, and prioritization of investor returns over care quality. Policymakers in several countries are implementing closer scrutiny of private equity-owned facilities to ensure care standards are maintained.

Long-term care insurance plays a significant but variable role across different markets. Insurance ownership is most prevalent in the United States, Japan, and Western Europe, where established insurance markets and public-private partnership programs have promoted adoption. In the US, long-term care insurance covers services including nursing home care, assisted living, and home care, reducing the financial burden on policyholders and their families.

Insurance coverage affects the retirement home market by expanding the pool of potential residents who can afford services, creating predictable revenue streams for facilities that accept insurance payments, and influencing service standards as insurers often require contracted facilities to meet specific quality benchmarks. Market penetration remains modest overall, with many seniors relying on self-pay or government programs, but ownership has grown steadily due to public awareness campaigns and employer-sponsored partnership programs.

Private payment and insurance increasingly shape premium market segments, with high-end retirement communities targeting affluent seniors with comprehensive insurance coverage or substantial personal assets. These facilities differentiate through luxury amenities, advanced technology integration, and resort-style services that command premium pricing. For retirement home operators, understanding the mix of payment sources in their target market is essential for financial planning and positioning within the competitive landscape.

Who are the leading companies or service providers in the elderly care sector, and how do they differentiate themselves?

Leading companies in the global elderly care and retirement home sector include Brookdale Senior Living, Home Instead, Sunrise Senior Living, Genesis Healthcare, Amedisys, LHC Group, and Extendicare.

These leading retirement home operators differentiate themselves through multiple strategies including technology integration (AI monitoring, telemedicine platforms, electronic health records), wellness and lifestyle programming that goes beyond basic care to include fitness, social activities, and lifelong learning, continuum-of-care communities allowing residents to age in place while accessing increasing care levels, and hospitality-inspired amenities such as restaurant-style dining, concierge services, and upscale accommodations that appeal to affluent seniors.

For new retirement home operators, studying these differentiation strategies provides insights into competitive positioning options and helps identify underserved market segments or innovative approaches that could provide competitive advantages in local markets.

It's a key part of what we outline in the retirement home business plan.

What are the prevailing pricing models for elderly care services, and how affordable are they across different income groups?

Home care costs in the United States average $33 per hour in 2025, with full-time care (typically requiring multiple caregivers due to shift work) costing approximately $80,000 annually.

Nursing home costs average over $10,000 per month, translating to more than $120,000 annually for private room accommodations. Assisted living facilities typically fall between these extremes, with monthly costs ranging from $4,000 to $7,000 depending on location, amenities, and level of care required. These prices reflect the US market; costs vary significantly by country based on labor costs, regulatory requirements, and market competition.

Pricing models in the retirement home industry include several approaches. Flat monthly fees provide predictable costs for residents and stable revenue for facilities, typically covering room, board, and a defined set of services. Tiered service packages offer base fees with additional charges for higher care levels, allowing residents to pay only for services they need. Fee-for-service models charge separately for each service component, providing maximum flexibility but less predictability. Bundled value-based contracts, increasingly used with insurance and government payers, tie payments to quality outcomes rather than service volume.

Affordability varies dramatically across income groups, creating market segmentation in retirement home services. High-income seniors can access premium retirement communities with extensive amenities and comprehensive services. Middle-income seniors often struggle to afford quality care, earning too much to qualify for means-tested government assistance but lacking sufficient resources for private-pay facilities, creating a significant affordability gap. Low-income seniors typically depend on government programs like Medicaid, which limits facility choices to those accepting government reimbursement rates.

The funding mix for elderly care typically combines private payment from residents or families, government subsidies through Medicare, Medicaid, or equivalent programs, insurance reimbursements for those with long-term care policies, and veteran's benefits or other specialized programs. Most retirement home residents rely on multiple funding sources, and facilities must navigate complex billing across these different payment mechanisms.

What workforce and staffing trends, including shortages, wages, and training programs, are shaping the industry's capacity to expand?

Workforce shortages are the most severe constraint on retirement home industry expansion, with demand for care workers surging while recruitment and retention remain extremely challenging.

The staffing crisis in elderly care stems from structural factors. Care work is physically demanding, requiring lifting and assisting residents, extended periods on feet, and exposure to illness and bodily fluids. The work is emotionally taxing, involving responsibility for vulnerable individuals, witnessing decline and death, and managing behavioral challenges from residents with dementia. Compensation often does not reflect these demands, with entry-level positions paying near minimum wage in many markets.

Wages are climbing in response to shortages, but increases are not always sufficient to offset turnover or attract new talent at the scale required. Retirement home operators face pressure to raise wages to remain competitive with other employment sectors, but must balance labor cost increases against pricing constraints and reimbursement rate limitations from government programs. High turnover rates compound the problem by creating continuous training costs and disrupting care continuity for residents.

1. Upskilling and professionalization initiatives: Government-supported training programs in leading markets are working to improve care worker skills, create clearer career pathways with advancement opportunities, and increase professional recognition for elderly care work to improve sector attractiveness.
2. Migrant labor dependency: Many regions rely heavily on migrant workers to fill care positions, with international recruitment addressing domestic labor shortages but sometimes creating precarious employment conditions, visa restrictions, and cultural and language barriers that affect care quality.
3. Technology as workforce supplement: Investment in monitoring systems, robotics, and automated administrative processes aims to reduce staff workload and allow smaller teams to serve more residents safely, though technology cannot fully replace human caregivers for relationship-based care.
4. Competitive pressure from healthcare sector: Retirement homes compete with hospitals, clinics, and home health agencies for nurses and certified nursing assistants, with healthcare facilities often offering better pay and benefits, making recruitment especially difficult for smaller retirement home operators.
5. Regulatory staffing requirements: Government regulations mandate minimum staff-to-resident ratios in many jurisdictions, creating baseline staffing needs that facilities must meet regardless of recruitment challenges, with violations potentially resulting in penalties or facility closure.

For retirement home operators, workforce strategy is as critical as financial and operational planning. Successful facilities are implementing enhanced benefits packages beyond base wages, creating positive workplace cultures that reduce turnover, developing internal training and career advancement pathways, leveraging technology to reduce staff burden, and exploring innovative staffing models such as flexible scheduling and job-sharing arrangements.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Data Bridge Market Research - Global Elderly Care Market
2. Research and Markets - Elderly Care Market Report
3. Zion Market Research - Elderly Care Services Market
4. DataM Intelligence - Elder Care Services Market
5. Data Bridge Market Research - Asia Pacific Elderly Care Market
6. Roots Analysis - Assisted Living Technologies Market
7. United Nations - World Social Report 2023
8. Australian Government Department of Health - Support at Home Program
9. A Place for Mom - In-Home Care Costs
10. World Health Organization - Ageing and Health