The Reality of Retiree Spending


Recent Bureau of Labor Statistics data show that households run by Baby Boomers spend an average of $45,756 a year, or less than $4,000 a month. This is much less than the monthly average that all U.S. households spend combined. Read on to find out how much retirees spend and what they spend their money on.

Retirement spending varies based on property taxes, transportation, health care, and countless other variables.

With no work-related costs and children supporting themselves, you may have expected retirees to spend even less than the BLS data show.

Retirees spend the least on entertainment, which isn’t surprising – just $197 a month compared to an average of $243 a month for the general population. They spend the most on housing – $1,322 a month. Even though they are close to paying off their mortgage, these costs don’t seem to go away. This unavoidable monthly expenditure includes insurance, property taxes, utilities, household supplies, repairs and maintenance.

With age, health care costs increase – it is an understandable fact. This item accounts for around $500 of the monthly budget. Insurance premiums can exceed $4,000 a year for those over 65.

Retirees spend $567 a month on transport. This comes to $6,814 annually, includes the costs of insurance, gas, and maintenance and repairs. It’s still only two-thirds of the $9,000 average for the general population.

Food is an important budget item for all ages. Retirees spend $483 a year on food, which is 80% of what the average household spends on food.

Finally, cash contributions comprise $202 a month. This includes donations and other unconditional contributions.


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