Financing in retirement: Understanding shopping habits of older consumers
Life near or after retirement still brings essential, often unexpected expenses, and many older consumers face unique challenges when managing major purchases. Understanding how boomers and seniors shop, budget, and explore payment solutions can help retailers better meet their needs. Learn what matters most to older shoppers and how alternative financing options can support them.
Key takeaways
Older shoppers, including retirees living on fixed incomes, can face limited access to traditional financing.
Boomers and seniors often prioritize value, durability, and reliability when making major purchases.
Many older consumers prefer to evaluate products firsthand and appreciate guidance from knowledgeable staff, particularly when discussing financing.
Snap-branded lease-to-own financing and loan options can give older shoppers a way to get what they need now and pay later – and help retailers support more customers.
Life doesn’t stop when work does. People continue to need and want major purchases in their pre-retirement and retirement years, from a new sofa to a more efficient washing machine or a reliable set of tires.
Managing retirees’ major purchases on a tight budget or a fixed income is challenging for consumers. For retailers, understanding the financial pressures and realties of older customers is key to serving them effectively and earning their loyalty.
Many retailers assume that older shoppers have pristine credit and ample savings. While that may be true for some, it’s not the whole story. A new study from Snap Finance, “Closing the Credit Gap: Major Purchase Study,” found that 19% of consumers with credit scores below 670 are baby boomers or older.
Who are boomers and seniors?
Boomers were born between 1946 and 1964 and came of age in a time of unprecedented economic growth and societal shifts. They are often described as a hardworking, resourceful, and loyal generation. Boomers are currently near retirement age or have already retired.
Seniors typically refer to individuals aged 65 and older, a group that includes older boomers and members of the Silent Generation (born between 1928 and 1945). This demographic is often more conservative in their spending and more reluctant to use technology and digital tools than younger generations.
All of these factors change how they shop and pay for major purchases. Understanding boomers and their older counterparts will help you better serve this significant, often overlooked, segment of the market – a large potential customer base for your business.
How retirees manage major purchases
When a large, necessary expense arises, older consumers have several common strategies for managing the cost. Their approach is shaped by years of financial experience and the reality of a fixed income if they’re retired. Understanding seniors’ consumer behavior is the first step in meeting their needs.
Here are several common ways they handle major purchases.
Tap in to savings
Many older adults have spent a lifetime building a nest egg. When a significant purchase is necessary, they often draw from those savings, but that may not be possible or in their long-term best interest. A major appliance failure, for example, can take a surprisingly large bite out of a carefully planned budget or savings account, especially for those with little savings.
Use credit cards
Credit cards are a common tool for spreading out the cost of a purchase, but not everyone qualifies for a traditional credit card, which leads to a disparity. Among those with lower credit scores, Snap found that only 13% of all consumers used a general-purpose credit card for a major purchase, compared to 40% of those with higher credit scores.
Seek personal loans
For very large expenses, some may turn to a bank or credit union for a personal loan. The challenge is that qualifying for a loan can be difficult for someone who is no longer earning a regular paycheck and/or has a lower credit score. Lenders may be hesitant to approve applications based on retirement income alone.
Use point-of-purchase financing
Many stores and financing providers offer financing for purchases, including buy now, pay later options, store credit cards or financing, lease-to-own financing, and installment loans. Snap-branded lease-to-own financing and loan options can be an option for older shoppers with less-than-perfect credit.1
Delay the purchase
Faced with limited options, many retirees simply put off a major purchase. They might try to repair an old appliance one more time or make do with worn-out furniture. These delays can lead to inconvenience, discomfort, and sometimes even greater expense when a complete failure forces an emergency replacement at a higher price.
Rely on family
In some cases, older consumers with credit challenges and limited savings may turn to their adult children or other relatives for financial assistance. While this can be a solution, it’s not one most people prefer as it often strains relationships.
Key differences from younger cohorts
The shopping and financing habits of older consumers are distinctly different from those of millennials and Gen Z. Younger buyers are digital natives who are comfortable with a wide array of online payment and financing options. They can be more focused on aspirational purchases and trends, and are often more willing to take on debt to achieve a certain lifestyle.
In contrast, senior consumer behavior is typically more cautious and practical. Here are a few key distinctions:
A focus on needs over wants
Among low-income consumers by generation, 55% of Gen Zers said they planned to splurge in the next quarter, compared to just 16% of boomers, according to McKinsey & Company. This is due in part to increasing responsibilities as people age, leading to purchases driven by replacement needs – a broken refrigerator, a worn-out mattress, or essential car repairs.
Value and longevity are paramount
Older shoppers have a lifetime of purchasing experience and have likely seen the value in purchasing products and brands that will last. If they’re able, senior shoppers may be more willing to spend more to purchase a better brand.
Risk tolerance
Only 37% of retirees are debt-free, which leaves many older people struggling. The goal may be to reduce financing after retirement, but financial realities may not align. Among consumers ages 65-74, 42% carry month-to-month credit card debt, according to AARP. Boomers’ average credit card balance is $6,795.
Preference for in-person interaction
While digital adoption is growing among seniors, many still prefer the experience of shopping in a physical store. Despite the growth of e-commerce, Snap Finance’s recent survey found 60% of consumers completed a recent major purchase in-store. Shoppers often want to examine products firsthand and get questions answered by knowledgeable staff. For credit-challenged consumers, especially older shoppers, these in-person interactions can be particularly valuable when financing options need to be discussed and arranged.
The marketing and financing strategies that work for younger customers may not resonate with an older audience. Retailers need a tailored approach that speaks to their priorities and preferences.
Financing as a bridge for fixed-income households
Like all consumers, boomers and seniors often need to pay over time for what they need. But for the nearly one in five older consumers with lower credit scores, traditional financing is often out of reach. Alternative financing solutions, such as Snap-branded lease-to-own financing and loan options, can help bridge the credit gap.
Financing after retirement isn’t always an easy decision, especially for those with credit challenges. But consider the common scenario of a retired couple whose refrigerator suddenly stops working. They are on a fixed monthly income from Social Security and a pension. They have some savings, but they are reluctant to use a large portion of it on a single purchase. Their credit score, impacted by years of living on a tight budget, isn't high enough to qualify for traditional financing.
Here’s how Snap Finance could help. They could shop at a Snap retail partner and get a quality, reliable refrigerator immediately with Snap-branded lease-to-own financing or loan solutions. And you can close the sale.
By promoting transparent financing options such as Snap Finance, businesses can meet consumers of all ages where they are, helping them get what they need now and pay later. When financing works for everyone, everyone wins.
Read our full study, “Closing the Credit Gap: Major Purchase Study” to learn more about how businesses like yours can help bridge the credit gap for more customers.
Interested in learning more? Check out these resources from Snap Finance:
Closing the credit gap: How credit-challenged consumers shop in 2025
Why customers don’t ask for financing – and why you should still talk about it
Not a Snap Partner? Learn more about partnering with Snap Finance.
Snap-branded product offering includes retail installment contracts, bank installment loans, and lease-to-own financing. For more detailed information, please visit snapfinance.com/legal/products
1 Not all applicants are approved. Approvals subject to underwriting qualification criteria.