What expenses must we anticipate when becoming a senior citizen?
For some of you, it may be too early to think about that. But time flies so it is better to know in advance what to expect once you reach retirement age – currently 65 years old in Luxembourg.
The transition to retirement involves changing the way you spend your money. Even if the seniors of today – and even more so those of tomorrow – are healthier than the previous generations, the majority of their expenses is dedicated to health and other sanitary fees such as beauty care and insurance policies (health insurance in particular). As we age, our tendency to contract diseases increases, our mobility decreases and the risk of falling rises.
Other areas of expenditure, such as accommodation, grow in importance. After the children have left home, a lot of seniors move to smaller and more comfortable housing. Others improve the comfort of their house and furnish it in order to face problems of mobility. The long stairway to the second floor that you climbed easily in the past becomes an instrument of torture when the legs are not as strong as they used to be!
Contrary to preconceived ideas, seniors don’t hesitate to invest in new technologies. They are the most present and the most active users of social networks as well as the biggest online consumers. Thanks to the Net, shopping and social activities have never been so easy. There is no doubt that this trend will increase in the future with generations who grew up with computer technology and Internet access.
On the way to a silver economy!
Leisure expenses decrease with age. At the beginning of their retirement, seniors spend a lot of money on travelling and undertaking cultural and sporting activities. Then, gradually, as moving around becomes ever more difficult, they reduce the amounts spent on clothes, food and leisure.
But this trends could change over the coming years. The consumption behaviour of the seniors has greatly evolved with the arrival of the baby boomers. Studies have shown a significant disruption between seniors born before World War II and those born after World War II. The first tend to stress autonomy and reduce non-essential expenses. The second consume more because they have grown up in a mass-consumption environment.
To cater to this new demographic stratum requesting products that are more adapted to their needs, a lot of companies have invested in the silver economy. Personalised services and technologies related to autonomy, home automation, the Internet of things: many goods and services will soon become indispensable and will develop over the next years.
But still, a substantial problem remains: will the next senior generations be as rich as those of today? Nobody can say for sure, at least not unless they work longer. But this is another debate…
The queen of cards. There are many different types and they offer many possibilities other than cashless payment, from differed repayment to additional guarantees on purchases.
3D Secure is an internationally recognised security standard for online payments. The service is limited in Luxembourg to credit cards.
If it’s true that when we shop in a store and handover physical cash, the pain of paying finds the act prompts more awareness about spending, and parting with cash may even hurt a bit more than swiping a bank card.