Retirement is at least 20 years away for me, but I can’t help worrying sometimes that lifestyle creep (when a person’s standard of living improves as their income rises) might be putting my final years at risk. If that happens, I don’t think I’ll be alone.
We’re living longer than ever, but the age of retirement hasn’t changed, which means that theoretically we should be planning for longer retirements.
That sounds nice, but it doesn’t seem like cyclical recessions and economic uncertainty have done anything to turn us into better savers.
Instead, from what I can tell, we’re all living bigger and better as time goes on.
Decades ago, people lived in smaller homes, took vacations close to home, had less of pretty much everything, and used things until they wore out.
Now most North Americans live in pretty big homes, even though they’re having less kids. Maybe that’s because they know the kids will be living with them well past 18.
Instead of piling in the station wagon to go on a family camping trip, we’re flying to far flung places and staying in nice hotels.
If you stay in a hostel, chances are most of the people you meet will be younger than 30. I’ve occasionally seen families staying in some European hostels, but it seems like the older people get, the more likely they’re going to want to stay in more comfortable quarters. There’s nothing wrong with that, but when does lifestyle creep go too far?
I think maybe the trouble starts when the idea of what’s desirable gradually becomes what’s essential and we don’t even notice it happening.
Spending money on a daily coffee, replacing working electronics such as a cell phone because you’re “eligible for an upgrade” (ie: a contract renewal) and paying someone for clothing repairs and alterations instead of learning to do it yourself are now considered part of the basics by many people (guilty on at least one count!).
None of this is a problem if it doesn’t impact your budget and how much you’re saving.
My worry is no one knows for certain how long they’re going to live and if our quality of life keeps improving, some of us will run out of money before we reach the end.
By Joanne Layh