How Much Does a Typical Retiree Household Spend in a Year?

How Much Does a Typical Retiree Household Spend in a Year?
Photo by wavebreakmedia / Shutterstock.com

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

U.S. households led by someone who is 65 or older spend a whopping $50,178 a year, according to the latest federal data on consumer spending, for the 12 months from July 2017 through June 2018. By comparison, the average across all households is $60,815.

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 one-third of older-household spending is related to housing. That translates to an average of $16,723 per year, which compares with $20,001 for the average U.S. household.

That spending includes rent and mortgage costs as well as hidden homeowner costs such as property taxes, insurance, 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 $7,472 on transportation costs such as vehicles, gas and insurance each year. That compares with an average of $9,735 for all households.

3. Health care

Now, here’s an example of an expense that increases in retirement. Older households spend an average of $6,700 on health care annually — compared with $4,924 for all households.

The bulk of consumers’ health care spending — for both older households and the average household across all ages — is on insurance. The rest is on medical services, medical supplies and drugs.

4. Food

Members of older households spend an average of $6,513 per year on food, including both the food they eat at home and eating out. That’s lower than the $7,869 spent by the average household.

5. Utilities and public services

Older households spend an average of $3,714 per year on utilities like natural gas and electricity and services such as phone and water. By comparison, the average spent across all households is $3,956.

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.

Read Next

7 Surprising Things That Damage Your Credit Score
7 Surprising Things That Damage Your Credit Score

A seemingly small stumble can cause your credit score to plummet.

5 States Where Drivers Pay the Most for Car Insurance
5 States Where Drivers Pay the Most for Car Insurance

Auto insurance will cost you more than three times as much in one state compared with another. Here’s how to lower your rates no matter where you live.

Don’t Pay for These 10 Things: They Are Free With a Library Card
Don’t Pay for These 10 Things: They Are Free With a Library Card

Before you spend another dollar on items and services like these, check with your public library.

View this page without ads

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

Get Started

Comments