How Much the Average Middle-Class Retiree Spends Monthly at Age 65 — And What Changes By 75

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For much of life, your spending tends to increase. As you get older and you advance in your career, you often have more money to spend and also more responsibilities, like paying a mortgage, car loans and all the expenses that come with having kids. However, once you reach retirement age, average spending typically decreases.

Part of the change is often due to having less income in retirement compared to your working years. So, you might drop your discretionary spending, like on dining out and clothing. At the same time, your main bills are often lower during retirement, such as if you’ve paid off your mortgage by then. These costs typically continue to decrease as you enter into the later years of retirement.

So, what does this spending typically look like?

Average Spending at Age 65

According to the Consumer Expenditure Surveys (CE) program from the U.S. Bureau of Labor Statistics, the average 55 to 64-year-old spends $83,379 per year per household. Then, from age 65 to 74, average spending is $65,149.

If we average these two numbers to estimate what someone in the middle of these ranges spends at age 65, the result would be $74,264. On a monthly basis, this equates to roughly $6,189 per month for a middle-class household. 

A more conservative estimate would be to simply use that average spend of $65,149 between 65 and 74, as that may account for more retirees, whereas looking at spending from 55 to 64 doesn’t account as much for the spending slowdown in retirement. On that basis, a middle-class retiree would spend around $5,429 per household.

For most people in this age range, about half of their spending comes from housing and transportation. Even if you own your house and car, costs like utilities, fuel, and maintenance can add up to many thousands of dollars per year. That means on a monthly basis, retirees should likely set aside money for these variable expenses.

Also, healthcare expenses tick up as you age. People ages 65 to 74 spend nearly $8,000 per year or around $666 per month per household on healthcare costs, mainly for insurance.

What Changes at Age 75

As you get deeper into retirement, your costs tend to drop further. On average, those ages 75 and up spend 18.6% less per household than those ages 65 to 74. On a monthly basis, someone age 75 or older spends around $4,419 per month per household. 

One of the biggest changes is often a drop in transportation costs. On average, someone age 65 to 74 spends around $908 per month on transportation per household, with the bulk of that coming from the monthly average of the cost of buying cars. By age 75 and above, the monthly costs average just $537, with spending on vehicle purchases falling by more than half. 

Healthcare costs do rise slightly on average at age 75, but that only works out to about $17 more per month. 

Still, much depends on the situation. In the later years of retirement, healthcare costs can rise substantially, especially if you need long-term care, like a home health aide or need to move into an assisted living facility. That type of care can cost thousands per month without long-term care insurance.

Overall, spending tends to decrease in retirement, but that doesn’t mean it’s easy to afford these later years. Planning ahead, such as by building up your retirement savings, purchasing insurance you’re comfortable with, and managing debt leading into retirement can make a big difference between spending less naturally in retirement versus being forced to live frugally. 

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