The True Cost of Living in Retirement Might Surprise You

The True Cost of Living in Retirement Might Surprise You Photo by sebra / Shutterstock.com

How much does it cost to get by in retirement? Pretty close to what it costs to live before retirement, according to federal data.

U.S. households led by someone who is 65 or older spend a whopping $49,542 a year, according to the latest federal data on consumer spending, which covers 2017. By comparison, the average across all households is $60,060.

So, where is all that money going every golden year? The biggest expenses for older households are many of the same as those for younger Americans. They include:

1. Housing

A whopping 33.6 percent of older-household spending is related to housing. That translates to an average of $16,668 per year, which compares with $19,884 spent on average by all U.S. households.

That spending includes rent and mortgage costs as well as hidden homeowner costs such as property taxes, insurance, and maintenance and repairs. It does not include utilities — which are detailed in section No. 5.

2. Transportation

Commuting expenses might vanish during retirement, but that doesn’t mean all transportation costs will.

Older households spend an average of $7,513 on transportation costs like vehicles, gas and insurance each year. That compares with an average of $9,576 for all households.

3. Health care

Now, here’s an example of an expense that increases in retirement. Older households spend an average of $6,620 on health care annually — compared with $4,928 for all households.

The bulk of consumers’ health care spending is on insurance. The rest is on medical services and medical supplies.

4. Food

Members of older households spend an average of $6,326 per year on food, including both food that they eat at home and eat out. That’s lower than the average cost of $7,729 spent by all households.

5. Utilities, fuels and public services

Older households spend an average of $3,572 per year on utilities like natural gas and electricity and services like phone and water. By comparison, the average spent across all households is $3,836.

What’s your take on how much older households spend each year? Sound off below or over on our Facebook page.

Learn everything you need to plan your dream retirement

The Only Retirement Guide You'll Ever Need gives you the knowledge you need to retire on your own terms. Sure, you can pay a financial adviser, but this online course gives you total control to create a custom retirement plan around the things that make you happy.

You're going to get expert, personalized advice. You'll have access to the latest tools. And when it's complete, you'll be able to approach your retirement confidently and with peace of mind.

It's time to plan the best years of your life. Let's get started.

Popular Articles

11 Free Ways to Research Your Family History
11 Free Ways to Research Your Family History

Forget subscription-based genealogy sites. Use these free databases, instead. They are a treasure trove for family history researchers.

18 Things Your Grandchildren Will Never Understand
18 Things Your Grandchildren Will Never Understand

How many of these once-familiar toys, tools and implements of a bygone era do you still have at your house?

8 Things You Should Never Put in the Microwave
8 Things You Should Never Put in the Microwave

A microwave oven can be a busy cook’s best friend. But trying to heat these things inside a microwave can cause disaster.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments