Technology Is the New Essential Cost in Retirement Planning

Technology and tech-enabled services are new costs in retirement planning and longevity preparedness.

Technology is the new line item cost in retirement planning. As we mark the fifth anniversary of the Covid-19 shutdown, it’s clear that what many initially perceived as temporary changes became permanent fixtures in our daily lives. The pandemic propelled the role of technology in our lives at a velocity few would have anticipated. What began as emergency adaptations—virtual doctor’s appointments, online grocery shopping, video family gatherings—have evolved into expectations across the lifespan. Far from being temporary intrusions or stopgap fixes, these technological hacks to cope with life during Covid-19 now represent vital components of modern aging and must be considered essential costs in retirement and longevity planning.

When people consider retirement costs, the conversation typically revolves around housing, healthcare expenses, paying for bucket list dreams, and legacy. However, another critical category deserves its own line item in retirement budgets: technology.

The Pandemic Acceleration Effect

The Covid-19 pandemic radically transformed how Americans of all ages interact with technology, but its impact on older adults and those approaching retirement has been particularly profound. What began as a gradual shift toward digital adoption suddenly became an urgent necessity during the pandemic.

According to MIT AgeLab research conducted in the early months of the pandemic (May-June 2020), people across all generations reported higher trust in, comfort with, and interest in new technologies compared to pre-pandemic levels. While millennials and Gen X showed the most substantial positive changes, even the Silent Generation (then ages 75-92) and baby boomers (ages 56-74) reported increased willingness to adopt new technologies.

MIT AgeLab’s 2020 findings did not reflect a mere temporary adaptation. More recent data from the Pew Research Center confirms the lasting nature of this digital transformation. Pew’s October 2024 survey reveals that 48% of Americans say the pandemic changed how they now use technology, with 18% reporting “major” changes to their tech habits. While younger adults lead this trend (62% of those younger than 30), the impact spans generations—36% of adults 65 and older and 42% of those ages 50-64 report pandemic-driven changes in their technology use.

Even more striking is AARP’s 2024 survey of approximately 3,600 adults, finding that nearly two-thirds (66%) of older Americans say technology enriches their lives by making daily life and aging easier. Far from being reluctant adopters, standing across a digital divide, more and more older adults are increasingly embracing digital services to manage their finances, social lives, health and wellness, and care.

From Crisis Response to New Normal

What began as a crisis response has evolved into a new way of life. The Silent Generation and baby boomers, who initially reported only “slight increases” in technology attitudes in the 2020 MIT study, have continued building digital competence and confidence. This rapid digital integration reflects a necessity and a fundamental shift in lifestyle expectations for living in retirement.

The 2024 AARP data reveals how deeply technology has become embedded in aging-in-place strategies. More than 6 in 10 older adults now use smart devices to help with security, utilities, appliances, and lighting. Nearly half (46%) have installed safety devices such as alarms and door or drive cameras, with another 40% expressing interest in acquiring them. This widespread adoption demonstrates that technology is now an essential infrastructure for independent living.

Technology: A New Pillar of Longevity Preparedness

These trends indicate an emerging reality: technology has become a new pillar of longevity preparedness alongside housing, healthcare, bucket lists, and legacy. The accelerated adoption of technology means that it is no longer a discretionary expense but a fundamental part of how retirees manage their daily lives—connecting with loved ones, accessing healthcare, facilitating home deliveries, transportation, handling finances, and engaging with their communities.

Consider technology-related costs that now represent essential expenses for life in older age:

• Smart appliances: Refrigerators, ovens, dishwashers, washing machines, coffee makers, vacuums, microwaves, and even toilets connected to the internet enable users to connect, control, and monitor their function.
• Hardware replacement cycles: Every consumer knows technology purchases are not one-and-done; smartphones, tablets, computers, smart TVs, and other devices require regular upgrading and outright replacement.
• Connectivity costs: High-speed internet, mobile data plans, and streaming services stealthily creep up on credit card statements. They begin with Wi-Fi access, then a bundled service, then extended services for security and health, and continue to grow. Over time, the expense of providing a wire of connectivity to the home becomes a floodgate of costs.
• Digital security: Older adults are a frequent target of cybercrime. Password managers, VPNs, and other security services to protect digital assets are now a new insurance cost.
• Subscription services: Digital news, entertainment platforms, and an ever-growing number of just one more streaming service to see the game or show, productivity tools, health applications, and digital entertainment like games, books, and hobbies.
• Smart home technologies: Smart speakers, security systems, and other devices that offer connected convenience.
• Digital health platforms: Telehealth subscriptions, health monitoring devices, and medication management systems

The intersection of health and technology at home is just one example of how technology has become a pillar of living in older age. AARP’s 2024 study highlights how older Americans integrate technology extensively into their health management. Among adults 50-plus, the most popular digital health services include health-tracking apps (71%), fitness classes (59%), medical services, telemedicine, and mental health resources.

Technology has become particularly important for 70% of older Americans managing chronic health conditions and the 27% who act as caregivers. Health-specific digital services, such as emergency alert devices and telemedicine, have become essential tools for health monitoring. Family caregivers increasingly depend on GPS devices and motion sensors to keep track of loved ones, as well as on-demand digital services for food delivery, communication, shopping, and medical assistance as they support their loved ones both at home and from a distance. Uber, DoorDash, Taskrabbit, Honor, and other on-demand services in today’s sharing economy are no longer merely conveniences for time-strapped millennials and Gen Xers but are evolving into a platform of virtual assisted living in older age.

Bridging the Digital Divide in Retirement Planning

This shift creates new considerations for retirement planning. The “digital divide” is no longer just about access and usability of technology but encompasses the cost and ability to maintain and upgrade technological capabilities throughout retirement—potentially decades of rapidly evolving digital ecosystems in the home, car, and community.

Retirement can span 20 to 30 years. Just imagine how many new technologies will be developed over those decades, rendering existing appliances and devices obsolete. Additionally, consider how many new services will evolve, not just offering new conveniences and support but making past technology purchases and investments worthless.

Longevity Planning for A Digitally Enabled Retirement

For those approaching retirement, the implications for longevity planning are clear: budget for technology as a core expense rather than a discretionary one. This means:

• Forecasting monthly technology costs alongside utilities and other essential services;
• Planning for major technology upgrades every 3-5 years;
• Considering how technology needs might evolve with changing health and mobility needs;
• Viewing digital literacy and learning not as an unnecessary use of time but as an investment in independence and quality of life;
• Budgeting for paid digital and on-demand sharing economy services that support aging-in-place and caregiver support.

Research shows that older Americans recognize the value of technology and are increasingly willing to pay for digital services that improve their quality of life. The pandemic did not create this trend; it dramatically accelerated an evolution that was already underway. What might have taken another decade to develop happened in just months, and years later there’s no turning back. The retirement lifestyle that most Americans now expect depends on continuous access to continuously advancing technologies and technology-enabled services.

As we reimagine retirement planning for the post-pandemic era, technology deserves its dedicated line item—not as a luxury but as an essential component of a secure, connected, and healthy retirement. With two-thirds of older Americans now acknowledging that technology enriches their lives by making daily activities and aging easier, the question is no longer whether to include technology in retirement planning but how much to allocate to a foundational pillar to living a longer, better, healthier life in older age.

By Joseph Coughlin, Senior Contributor