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:
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.
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.
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.