How much does it cost to get by in retirement? Not a whole lot less than it does before retirement.
U.S. households led by someone who is 65 or older spend $61,432 a year — $5,119 a month — on average. That’s according to the latest federal data on consumer spending by calendar year, which is for 2024.
By comparison, the average across all households is $78,535.
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.
1. Housing
More than one-third of older-household spending — about 36% — is related to housing. That translates to an average of $22,193 per year, which compares with $26,266 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 we’ll get to in a minute.
2. Transportation
Commuting expenses might shrink when you retire, but that doesn’t mean all of your transportation costs will.
Older households spend an average of $9,538 on transportation costs such as vehicles, gas and insurance. That means these costs collectively account for 15.5% of all their spending, on average.
Across all households, the average spending on transportation is $13,318 per year.
3. Healthcare
Now, here’s an example of an expense that increases in retirement. Older households spend an average of $7,799 on healthcare annually, accounting for about 12.7% of their spending. Compare that with an average of $6,197 spent by all households.
The bulk of consumers’ healthcare spending — for both older households and the average household across all ages — goes for insurance. The rest is on medical services, medical supplies and drugs.
4. Food
Older households spend an average of $7,940 per year on food, accounting for about 12.9% of all their spending. That dollar amount includes both the food they eat at home ($5,251) and eating out ($2,689).
That’s lower than the average of $10,169 in total food spending by households overall, which included $6,224 for food at home and $3,945 for food away from home.
5. Utilities and public services
Older households spend an average of $4,480 per year on utilities such as natural gas and electricity, and services such as phones and water, accounting for 7.3% of all their spending.
By comparison, the average spent on utilities across all households is $4,736 per year.
6. Entertainment
Older households spend an average of $3,025 per year on entertainment, accounting for about 5% of their expenditures. That compares with an average of $3,609 across all households.
This category includes not only things like movie tickets and TV subscriptions, but also pet-related expenses, personal hobbies and recreational vehicles.
7. Household furnishings and equipment
Older households spend an average of $2,153 per year on household furnishings and equipment, including appliances and rugs, accounting for 3.5% of all their expenditures.
That’s compared with an average of $2,414 per year across all households.
8. Household operations
Older households spend an average of $1,706 per year on household operations — accounting for about 3% of all their expenditures — compared with an average of $1,921 across those of all age groups.
Expenses such as pest control, storage, gardening and lawn care services, home security and repairs fall into this category.
9. Apparel and services
Older households spend an average of $1,198 per year on apparel and related services such as dry cleaning, sewing, and jewelry repair, accounting for about 2% of all their expenditures.
That compares with an average of $2,001 across all households.
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