The Essential Role of Technology in Modern Retirement Planning

Introduction: The Pandemic’s Lasting Impact on Retirement Planning

In March 2020, the Covid-19 pandemic brought unprecedented challenges to every aspect of life, reshaping how we live, work, and interact. As we now mark five years since the shutdown, it’s evident that the temporary solutions we adopted during the crisis—such as virtual doctor’s appointments, online grocery shopping, and video gatherings—have become permanent fixtures in our lives. These technologies, initially seen as stopgap measures, have evolved into essential tools for modern aging. Retirement planning, once focused on housing, healthcare, and bucket lists, must now include a new critical category: technology. As we navigate the post-pandemic world, technology has emerged as a vital cost—and investment—for ensuring a secure, connected, and fulfilling retirement.

The Pandemic Acceleration Effect: How Covid-19 Sped Up Digital Adoption

The Covid-19 pandemic revolutionized the way Americans of all ages interact with technology, but its impact on older adults has been particularly transformative. What began as a gradual shift toward digital adoption became an urgent necessity during the pandemic. Research by MIT AgeLab conducted in May and June 2020 revealed that people across all generations reported higher trust in, comfort with, and interest in new technologies compared to pre-pandemic levels. While younger generations, such as millennials and Gen X, showed the most significant positive changes, older generations, including baby boomers and the Silent Generation, also demonstrated a notable willingness to embrace new technologies.

This shift was not temporary. Data from the Pew Research Center’s October 2024 survey confirms that 48% of Americans say the pandemic changed how they use technology, with 18% reporting "major" changes. While younger adults lead this trend, older adults are also adopting technology at a significant rate, with 36% of those aged 65 and older and 42% of those aged 50-64 reporting pandemic-driven changes in their tech habits. AARP’s 2024 survey of approximately 3,600 adults further highlights this trend, with nearly two-thirds (66%) of older Americans stating that technology enriches their lives by making daily tasks and aging easier. Far from being reluctant adopters, older adults are increasingly embracing digital services to manage their finances, social lives, health, and care.

From Crisis Response to New Normal: Technology’s Permanent Role in Retirement

What began as a crisis response has evolved into a new way of life. Older adults, including the Silent Generation and baby boomers, have continued to build their digital competence and confidence since the pandemic. This rapid integration of technology reflects 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 manage security, utilities, appliances, and lighting, while nearly half (46%) have installed safety devices such as alarms and door or drive cameras. This widespread adoption demonstrates that technology is now an essential infrastructure for independent living.

Technology as a New Pillar of Longevity Preparedness

These trends indicate that technology has become a new pillar of longevity preparedness, standing alongside housing, healthcare, and legacy planning. 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. From connecting with loved ones and accessing healthcare to facilitating home deliveries and handling finances, technology has become indispensable. Essential technology-related costs now include:

• Smart Appliances: Internet-connected devices like refrigerators, ovens, and microwaves enable users to monitor and control their functions remotely.
• Hardware Replacement Cycles: Devices like smartphones, tablets, and smart TVs require regular upgrades and replacements.
• Connectivity Costs: High-speed internet, mobile data plans, and streaming services are no longer optional but essential for staying connected and engaged.
• Digital Security: Password managers, VPNs, and other security services are necessary to protect against cybercrime.
• Subscription Services: Digital news, entertainment platforms, health apps, and productivity tools are now integral to daily life.
• Smart Home Technologies: Devices like security systems and smart speakers offer convenience and peace of mind.
• Digital Health Platforms: Telehealth subscriptions, health-monitoring devices, and medication management systems are critical for managing health and wellness.

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 but also about the cost and ability to maintain and upgrade technological capabilities throughout retirement. Retirement can span 20 to 30 years, and over this time, rapid technological advancements will render existing devices obsolete while introducing new services. The implications are clear: retirees must budget for technology as a core expense, not a discretionary one.

For those approaching retirement, 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 requirements.
• Viewing digital literacy and learning as investments in independence and quality of life.
• Budgeting for paid digital and on-demand sharing economy services that support aging-in-place and caregiver support.

Older Americans recognize the value of technology and are increasingly willing to pay for digital services that improve their quality of life. While the pandemic accelerated this trend, it was already underway. The retirement lifestyle that most Americans now expect depends on continuous access to advancing technologies and technology-enabled services.

The Future of Retirement Planning: Embracing Technology as Essential

As we reimagine retirement planning for the post-pandemic era, technology deserves its own 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 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 this foundational pillar of living a longer, better, and healthier life in older age.