The increasing cost of living has led to many younger Australians tightening their belts at the checkout, but baby boomers are bucking the trend and a new survey has revealed just where their money’s going.
Their freedom to spend money throughout retirement has also turned the tide on the “old age” narrative where saving was more important than spending.
Bronwyn White, an expert in marketing to baby boomers, explained to HelloCare that the baby boomer generation wants to enjoy their retirement and continue participating in exciting activities and adventures.
“Baby boomers are completely different to their parents. Previous generations of older people were reluctant to spend because they have early memories of the Great Depression or because their parents brought them up to not be spenders. They were savers,” Ms White explained.
“Their children are baby boomers, the sex, drugs and rock and roll generation, and travel is the number one thing they will spend on. They love eating out, going to the theatre and they love spending money on their grandchildren.”
Spending has actually increased in the over-55 demographic as many are immune to crucial cost of living pressures like rising interest rates on home mortgages. Now, that’s not to say all people over 55 are not feeling the pinch, but many are at a point where they can spend.
And as Ms White mentioned, they’re spending on travel. A recent survey from Starts at 60 asked its readers ‘If you had spare money in your weekly budget, how would you use it?’ to which they replied:
With the highest number of responses going towards ‘put it in my savings’ it’s clear that plenty of baby boomers are still focused on saving for a rainy day. However, Ms White said travel and experiences are still the preference for a meaningful retirement lifestyle.
“Unlike previous generations, baby boomers are done with acquiring material possessions, they just want to enjoy life, grandchildren, family, holidays, travel and experiences. Some of them are not even really retiring so they’re potentially looking at new businesses and still doing things they have enjoyed for the last 30 or 40 years,” she said.
“This is not a generation that wants to just retire in the traditional sense and sit and watch TV or play golf. Wellness and activity are both big parts of a holiday and a trip. They want to be close to the outdoors, experience local cultures, cuisines and lifestyles and talk to people of different cultures. So they’re really inquisitive as a generation.”
Our emergence from the COVID-19 pandemic has likely played a key role in driving up interest in travel. In 2022, Australian Seniors found that one in five seniors had not experienced a “big” holiday within the last year, while it had been more than three years for two in three seniors. That coincides with the beginning of the pandemic era, and now that it’s eased, travel is at the top of the to-do list.
What’s at the bottom of the list, you ask? Aged care. Ms White stressed that it’s time to stop looking at retirement living as the end of the road as it’s still a continuation of a lifelong journey.
“The moment you mention aged care in the same sentence as retirement living, that invokes a reaction because active baby boomers are not interested in ageing. It’s an outdated principle,” she said.
“We need to redefine retirement because people are not retiring like they did in the traditional sense. Baby boomers want different things as they age, they want to continue enjoying life experiences.”
How different are your spending habits compared to your parents? Tell us in the comments below!
