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How Changes in Spending Impacts Retirement


Online shopping has become the norm in the Western part of the world. Experts say mature economies adopted e-commerce quickly because of its strong infrastructure and a trusting financial landscape.1

In other words, consumers could count on receiving goods ordered, vendors knew they would get paid and any conflicts were protected by a reputable credit and court system. These things weren’t true in many developing countries, thus e-commerce was slower to gain traction there.

However, now that emerging markets have put a secure infrastructure in place, many expect online sales to soar — which could help bolster those waning economies. The global online market offers new prospects for struggling brick-and-mortar retailers in the U.S. Just about any retailer, large or small, that can adapt its sales model to a global e-commerce market could be poised for massive opportunity.2

That’s one of the interesting parallels between life and commerce — where some doors close, others open; we just need to see where opportunity awaits. The same can be true when planning for retirement. Please feel free to contact us to discuss creating retirement strategies through the use of insurance products that can help you work toward your long-term retirement income goals.

Interestingly, one of the biggest economic issues of the day comes from a social phenomenon: As older people are living longer, younger people are having less children. To be exact, the first of the baby boomer generation turned 70 last year while, at the same time, the fertility rate in the United States reached its lowest point since records began in 1909.3

The ramifications of this population shift will likely be widespread and long lasting. For example, retirees tend to contribute less to the consumer economy, with an average reduction of 37.5 percent in household spending. This, in turn, affects company revenues and, subsequently, returns in the investment market.4 At the same time, retirees may be drawing down invested assets for income, further reducing available capital.

The elderly population boom also is expected to cause economic drains in targeted areas of the country. For example, states that have long been popular retirement havens, such as Florida, Arizona, Oregon and South Carolina, are among at least 14 states where the cost of elderly care is rising.5

In Florida alone, 20 percent of the population is over the age of 65; more than 40 percent is over 50. While it’s easy to write this off as the result of Florida being a retirement haven, that is no longer the case. Within about 10 years, the entire country will have a similar demographic composition — we will become “a nation of Floridas.”6

Another problem with the sizable gap between retirees and babies is an anticipated drop in the number of workers. The workforce may not be large enough to support the government programs older people are entitled to after years of contributing into the system. This issue is hardly isolated to America. Between 2025 and 2050, the number of people age 65 and older is projected to nearly double worldwide.7

To help mitigate the drain on resources, many are raising the eligible age for government-sponsored pensions and encouraging people to work well past traditional retirement age. Whether due to lack of retirement savings or the desire to work longer, the share of people working longer has grown during the past decade: a 6 percent increase in Germany, 10 percent in the U.K. and 18 percent in the U.S.8

Content prepared by Kara Stefan Communications.

1 Knowledge@Wharton. Nov. 1, 2017. “Why Emerging Markets Are the Next E-commerce Frontier.” http://knowledge.wharton.upenn.edu/article/why-emerging-markets-are-the-next-e-commerce-frontier/. Accessed Nov. 22, 2017.

2 Ibid.

3 Stephen McBride. World Economic Forum. Sept. 14, 2017. “Retiring baby boomers are going to have a huge impact on the economy.” https://www.weforum.org/agenda/2017/09/retiring-baby-boomers-are-going-to-have-a-huge-impact-on-the-economy. Accessed Nov. 22, 2017.

4 Ibid.

5 Sue Chang. Marketwatch. Nov. 8, 2017. “These maps show just how crazy fast the world is aging.” https://www.marketwatch.com/story/these-maps-show-just-how-crazy-fast-the-world-is-aging-2017-11-08?link=sfmw_tw. Accessed Nov. 22, 2017.

6 Joseph F. Coughlin. Time. Nov. 8, 2017. “There’s No Such Thing As ‘Old Age’ Anymore.” https://www.msn.com/en-us/news/other/theres-no-such-thing-as-old-age-anymore/ar-BBEJG0u. Accessed Nov. 22, 2017.

7 Suzanne Woolley. Bloomberg. Sept. 17, 2017. “Retirement, Delayed.” https://www.bloomberg.com/quicktake/retirement-redesigned?cmpid%253D. Accessed Nov. 22, 2017.

8 Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.




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Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!