Here’s Exactly How Much Retiree Households Spend in a Year

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 $57,818 a year, on average. That’s according to federal data on consumer spending for the latest calendar year available, which is 2022.

By comparison, the average across all households is $72,967.

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 is related to housing. That translates to an average of $20,362 per year, which compares with $24,298 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 spent an average of $8,172 on transportation costs such as vehicles, gas and insurance in 2022.

Across all households, the average spending on transportation was $12,295 in 2022.

3. Health care

Now, here’s an example of an expense that increases in retirement. Older households spend an average of $7,540 on health care annually — compared with an average of $5,850 spent by all households.

The bulk of consumers’ health care 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 $7,306 per year on food, including both the food they eat at home ($4,797) and eating out ($2,509).

That’s lower than the average of $9,343 in total food spending by all households overall, which included $5,703 for food at home and $3,639 for food away from home.

5. Utilities and public services

Older households spend an average of $4,236 per year on utilities such as natural gas and electricity, and services such as phones and water.

By comparison, the average spent across all households is $4,549.

6. Entertainment

Older households spend an average of $2,672 per year on entertainment, compared with an average of $3,458 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 $2,070 per year on household furnishings and equipment, including appliances and rugs.

That’s compared with an average of $2,606 across all households.

8. Household operations

Older households spend an average of $1,578 per year on household operations, compared with an average of $1,849 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 $1,130 per year on apparel and related services such as dry cleaning, sewing, and jewelry repair.

That compares with an average of $1,945 across all households.