Yet, even if older adults' mobile phone usage increases, it will not necessarily mean that they are willing to use M-payment, as most older adult individuals prefer to use cash for transactions [8].
Cashless Consumer Demographics
35- to 44-year-olds are 1.71% less likely to use cash than consumers aged 18 to 24. Consumers aged 18 to 24 years will use cash to make 9.97% of their purchases in 2024.
The average household led by someone age 65 and older spent 2.7% more last year than in 2021, adjusted for inflation, according to the Labor Department, compared with 0.7% for under-65 households. Spending by older households is up 34.5% from 1982, compared with 16.5% for younger households.
Cash Is Simply More Convenient
For many seniors, opening a wallet and grabbing a few bills is easier and more preferable to going online to transfer funds or check their balance. They also don't want to worry about finding the right bank branch to withdraw cash without incurring extra fees.
Baby boomers (24%) and Gen Xers (23%) are twice as likely to “rarely” carry cash than Gen Zers (12%). 18% of Gen Zers carry it because they frequent cash-only businesses—more than any other generation.
According to Fortune magazine, the average baby boomer's net worth falls between $970,000 and $1.2 million. When this population group retires or passes, their collected wealth will most likely be transferred to their children or grandchildren.
Oftentimes, members of older generations perceive keeping cash, gold or other valuables at home as safer than keeping them in a bank, experts say. “I think this is more common for the baby boomer generation and older,” said Mark Criner III, senior trust strategist for Baird Trust in Scottsdale, Ariz.
In 2023, housing expenses—mortgage payments, rent, property taxes, insurance, maintenance, and repair costs—averaged $21,445 (approximately $1,787 per month) for retiree households, accounting for over 36% of annual expenditures.
To measure poverty under the official measure, the Census Bureau uses specific dollar thresholds, which vary by family size and age of family members but do not vary geographically. In 2022, the poverty threshold was $14,040 for a single person age 65 or older and $17,710 for a household of two people 65 or older.
While cash isn't disappearing entirely, data from Marqeta shows that both consumer attitudes and habits are shifting towards a less cash-dependent economy. According to Marqeta's 2024 State of Payments Report, nearly three-quarters of U.S. consumers aren't concerned about moving towards a cashless society.
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.
Cash makes it easier to budget and stick to it
When you pay with the cash you've budgeted for purchases, it's easier to track exactly how you're spending your money. It's also an eye-opener and keeps you in reality as to how much cash is going out vs. coming in from week to week or month to month.
With those time ranges in mind, it may be reasonable to hold cash to cover one to two years of living expenses (beyond predictable Social Security and pension income) in addition to your daily use account. The exact amount you want to have also depends on your risk tolerance and the amount you have saved.
It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend. A locked, waterproof and fireproof safe can help protect your cash and other valuables from fire, flood or theft.
Baby Boomers (ages 55-75 years old) spend a total of $548.1 billion annually. Gen X (ages 36-54 years old) follow Boomers with $357 billion annual spend. Millennials (25-35) are next with $322.5 billion in annual spend. The Silent generation (ages 76 years and older) spend $162.9 billion annually.
Understanding the Average Retirement Cost. Overall, the Bureau of Labor Statistics reported that people 65 years old and older spent $52,141 in 2021 (the most recent year of data available). That's $4,345 in average retirement costs per month.
“Some common places for hiding valuables are behind wallpaper, inside couch and chair cushions, or behind loose bricks around fireplaces. People also like to hide valuables under steps, siding, and shingles.”
This begs the question, how much cash should retirees have on hand? The broad answer can range from six months to two years or more. But, the right answer for you depends on your monthly retirement expenses, sources of income, and what level of cash allows you to sleep at night.
Just 22% of baby boomers expect to leave an inheritance. Millennial and Gen Z heirs are eagerly anticipating a $90 trillion “great wealth transfer” as they inherit their parents' wealth—however, many are set to be disappointed as just one-fifth of baby boomers expect to leave anything behind.
When the first Boomers were born, the average life expectancy was 63 years old. Today, Boomers can expect to live to almost 79 years.
The median retirement savings of baby boomers is $202,000. Forty-three percent of 55- to 64-year-olds had no retirement savings at all in 2022, according to the Federal Reserve Board.