Although she worked for years as office manager at a private company, E., 70, divorced and living in Petah Tikva, was left without a proper pension when she retired two years ago.
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“I received some sort of sum on retiring but, in actuality, from a respectable salary I had a sharp drop in income,” she says, adding that she is now forced to use the money she’s saved up over the years and cash in on property that was intended for her family to inherit in order to survive.
The new financial situation also forces her to curb expenses. “I try to cut back, for instance, on grocery shopping,” she continues. “The main reason is that I want to be left with enough money to help my family. When I was working and earning money I would help them on a monthly basis, but now I need to struggle harder to continue doing so.”
Nevertheless, E. doesn’t want them to think she’s having a hard time and is considering going to work for a few hours a week to improve her financial situation. “All my life I’ve worked and didn’t have time to develop hobbies or concentrate on things that gave me pleasure,” she says. “Nowadays I read more than before with my mind clear, get involved with music, devote time to sports, travel abroad, and spend plenty of time with my grandchildren.”
The seniors’ club that E. belongs to has long changed its character and now it is more accurate to refer to two separate age groups: 65 to 74, and 75 and up, with the groups having different consumer habits.
“The division and segmentation of the golden agers is meant to help marketers direct their efforts, but the definition of ‘golden age’ as perceived in the past is problematic,” says Yaron Timmor, deputy dean of the business school at the Interdisciplinary Center in Herzliya. “People aged 60 behave like those at 50, so it’s not clear what necessarily defines the golden age group: chronological age, leaving the workforce, or health.”
Spare time is the key
Today, he claims, the defining characteristic of the group is its spare time and how it’s spent, rather than age.
In fact, consumer behavior of the elderly between 65 and 74 was found to be different from those who are older in a survey taken by TRI Strategic Research for Bayit Balev, which operates assisted-living facilities, rehabilitation hospitals and medical centers for extended care, in conjunction with TheMarker. The survey was taken from a representative sample of the population aged 65 and older.
For example, 41.1% of those aged 65 to 74 said they spent more money this year on food, compared with just 29.8% of those aged 75 and up. Just over half of the 65-to-74 respondents spent more money this year on their families in the last several months; only 8.2% said the reduced it while 38.9% reported on change. Even among people 75 and older, nearly 41% said they increased help to their families.
Of the 65-to-74 group, 11% increased their spending on eating out in restaurants as against 5.5% for those 75 and up.
The slowing economy is widely felt throughout the elderly population notwithstanding the differences between the two age groups.
In the last few months, 21% of all those surveyed (65 and over) were forced to give up some organized activities, 38% vacations in Israel or abroad, 39% household items, 25% heating, 33% favorite food items and 10% medications.
These figures explain why 40% of the respondents claimed they can’t manage on their earnings or monthly pensions.
“We have a rising standard of living here, which is good in terms of Europe and Western society,” says Timmor. “However, when you can’t consume certain things, you see the standard of living as not being so good but it doesn’t necessarily mean that the situation isn’t good.”
The support given to children also affects the situation. “Children are leaving home at a later age, they enter the workforce later and the standard of living is rising − and the parents provide support to fulfill the claim that ‘I went without so my child won’t have to,’” Timmor explains.
On giving up necessities like heating and medications, Oren Kaplan, a clinical psychologist, economist and dean of the business school at the College of Management Academic Studies, says most people at these ages decide, as part of their reasoning, to trim expenses in the desire to help their children.
“A pensioner thinks about life expectancy. If the money he has will last his lifetime, he budgets himself accordingly,” continues Kaplan. “The constant feeling that the money won’t last is due to the fact that there’s no clear knowledge of what will happen and how many years we’ll survive. But going without because the means really aren’t available is a different and much more serious situation that needs to be addressed.”
Luxury of retirement
P. and her husband, both approaching 70, are familiar with this situation. The couple, residents of Afula who retired two years ago, is generally satisfied with their situation but worry about their children’s financial future.
“Our financial situation was very good before we retired,” they say. “We allowed ourselves to enjoy the money we earned and did much traveling abroad; and we helped our children quite a bit by funding their education, with weddings, and then with the grandchildren too.”
Even now the couple’s standard of living remains much the same and they can still afford everything they could in the past, but are more worried about spending money because they are disturbed by the uncertainty of what lies ahead.
“We can afford traveling abroad and even trading in for a new car every few years, and we even joke with the kids that we’re enjoying life at the expense of their inheritance, but despite all this we’re also worried about if one of the children, for example, loses his livelihood. After all, we can’t go back to work and earn money, and we’d have to cut back to help more.”
The way things are going, people won’t be in such a hurry to retire in the future, according to Timmor, and they’ll feel more obligated to support their children and need to deal with the question of how to accomplish this as savings erode due to rising life expectancies.
“It can lead to a reversal of roles where some of the elderly reach the age where they’ll need economic assistance from their children,” he says.
Kaplan expects the 65 and over population to become much more powerful in the years to come, with more influence on consumer culture.
“In the U.S. this age group is gaining more political and consumer power over government decision making, and in most Western countries there’s a similar development as well, with rising life expectancies and the fact that there are more older people in relation to children,” says Kaplan.