In a Tariff Economy, Here’s How Much the Average Middle-Class Retiree Spends at 65, 75 and 85

BraunS / Getty Images

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Tariffs are increasing the costs of some products and services. However, those same costs become less impactful as retirees cut back on spending. Find out how much the average middle-class retiree spends at age 65, 75 and 85.

Average Spending for Retirees

The U.S. Bureau of Labor Statistics’ (BLS) Consumer Expenditure Surveys found that the average American who is 65 years or older spends $59,008 per year. The $59,008 figure is from 2023, which comes to $64,063 this year — or $5,339 per month.

The Consumer Expenditure Surveys only included the 65 and older group, but we can use research from RAND’s expanded version of the University of Michigan Health and Retirement Study. While the dollar numbers from that study are outdated, it showed that 75-year-olds spend 19% less than 65-year-olds. Furthermore, 85-year-olds tend to spend 34% less than 65-year-olds.

Since the average 65-year-old retiree spends $64,063 per year, we can use this number to calculate how much other age groups spend. The 19% expenditure drop for 75-year-olds comes to $51,891 per year or $4,324 per month.

The 34% spending drop for 85-year-olds means that they only spend $42,282 per year or $3,523 per month. People in their 80s won’t travel as much, if at all, compared to 65-year-olds. People in this group may also have sold their cars and don’t get out of the house as often, reducing their transportation costs in the process. While healthcare costs may go up as people get older, almost all of their other expenses go down.

The drop in annual spending makes older retirees the most equipped to navigate tariffs and rising inflation. A 10% increase in the cost of goods and services doesn’t affect them as much as the young family that is spending $100,000 per year.

Navigating Tariffs as a Retiree

The 85-year-olds might make enough from Social Security to cover their monthly expenses, barring healthcare costs. People who are in their 60s and 70s still spend enough money that they have to be more careful.

The first step is to assess your financial situation and see how much you can afford. People who have millions of dollars saved up in their nest eggs don’t have as much to worry about. Embracing semi-retirement with a part-time remote job in your 60s or early 70s can ensure that cash still comes in and you don’t have to touch your nest egg as long.

Part-time employment can also ensure that you don’t touch your Social Security benefits until you turn 70, which will provide the maximum benefit. Despite the tariffs, the stock market has performed well, so rising asset prices will let retirees withdraw from their retirement plans without impacting the nest egg as much.

Creating a budget and tightening your expenses can also help as prices go up. Unused subscriptions and impulse spending are two of the easiest categories to address if you want to get some quick wins and save more money.

Downsizing specifically because of tariffs may not make sense for most people, but living in a smaller house is usually a good move regardless. You end up with lower housing costs and living in a one-floor house minimizes the risk of tripping and getting a significant injury.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

Share This Article: