Many major expenses typically shrink once you retire, but healthcare is hardly one of them.
U.S. households led by someone who is 65 or older spend an average of $7,799 a year on healthcare, according to federal data on consumer spending for the latest calendar year available, which is 2024.
That translates to 12.7% of the total spent each year by senior households ($61,432, on average) and makes healthcare the fourth-biggest spending category among those households.
Housing (about 36%) and transportation (15.5%) accounted for bigger shares of seniors’ spending. Seniors spent just slightly more on food at an average of $7,940 (12.9%) for the year.
By comparison, all U.S. households spend an average of $6,197 a year on healthcare, which translates to about 8% of the total spending across all households ($78,535, on average).
Following is a detailed look at how senior households’ medical spending breaks down.
Health insurance
Average spending for a U.S. household led by someone age 65 or older: $5,107 per year
Average spending across all U.S. households: $4,055 per year
Insurance is easily the largest healthcare expenditure for households of any age, but it’s highest for senior households. On average, they spend $5,107 — around $426 a month — on insurance. That’s 8.3% of their total spending.
As defined by the Bureau of Labor Statistics, the expense of health insurance includes various types of insurance — including traditional fee-for-service plans, health maintenance organization (HMO) plans and supplemental Medicare plans, for example.
For more bad news about healthcare costs in retirement, check out “Retirees, Beware: Medicare Will Not Cover These 11 Medical Costs.”
Medical services
Average spending for a U.S. household led by someone age 65 or older: $1,449 per year
Average spending across all U.S. households: $1,252 per year
As defined by the Bureau of Labor Statistics, this type of healthcare expense includes a wide variety of care, such as:
- Hospital room and services
- Services from physicians and other professionals
- Eye and dental care
- Lab tests and X-rays
- Medical care in a retirement community
- Care in a convalescent or nursing home
Drugs
Average spending for a U.S. household led by someone age 65 or older: $898 per year
Average spending across all U.S. households: $658 per year
Drug spending includes spending on prescription and nonprescription medications as well as vitamins.
There are numerous ways anyone can cut their drug costs — including some ways you might not realize exist. Money Talks News has covered the topic extensively.
See, for example, “5 Pharmacies That Offer Prescriptions for $4 a Month — or Less.”
Medical supplies
Average spending for a U.S. household led by someone age 65 or older: $344 per year
Average spending across all U.S. households: $233 per year
This type of spending covers:
- A variety of supplies, including dressings, antiseptics, bandages, first aid kits, syringes, ice bags, thermometers, sun lamps and heating pads
- Medical appliances — such as braces, canes, crutches, walkers, eyeglasses and hearing aids
- Rental and repair of medical equipment
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