The Average Middle-Class Retirement Budget at Age 70 vs. 80
Written by
Chris Adam
Edited by
Zuri Anderson
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Here’s a heads-up about calculating your budget after your working years: Most retirement plans assume you’ll need the same income at 80 that you needed at 70.
That’s according to Andrew Lokenauth, founder of the blog Fluent in Finance, who said this leads to two problems — overspending in early retirement or hoarding money you never use. He noted both outcomes “stink.”
“The better framework is to view retirement in three phases,” he said. “Age 65 to 74 is high spending. Age 75 to 84 is moderate spending. Age 85 and over is low spending. Adjust your withdrawal strategy accordingly.”
With that said, what’s the difference between a 70-year-old’s middle-class retirement budget and an 80-year-old?
Planning for Retirement Budgets
At 70, middle-class retirees spend about $5,400 monthly or $65,000 yearly, per Lokenauth, who noted that this matches spending at age 65 almost exactly because you’re still in active retirement mode. The major expenses remain consistent.
At 80, according to Lokenauth, monthly spending drops to around $3,500 to$4,300. That’s a 19% to 34% decrease from age 70. He added the decline accelerates after 75 as mobility decreases and lifestyle simplifies.
“Here’s what most financial advisors won’t tell you: The spending drop from 70 to 80 is more dramatic than any other decade in retirement,” Lokenauth said. “People assume healthcare will drive costs up. Wrong. Everything else falls so much faster that total spending plummets.”
Retirement Budgets at Ages 70 and 80
Here’s a look at what Lokenauth said are expected monthly budgets for ages 70 and 80, based on his work on Wall Street and with clients.
70-year-old middle-class retiree’s monthly budget (total $5,400):
- Housing: $1,850
- Transportation: $900
- Healthcare: $660
- Food: $610
- Entertainment: $290
- Other: $1,090
80-year-old middle-class retiree’s monthly budget (total $3,900):
- Housing: $1,500
- Healthcare: $700
- Transportation: $550
- Food: $520
- Entertainment: $180
- Other: $450
According to Lokenauth, the math reveals a 28% total spending decrease. Transportation drops 39%, entertainment falls 38%, housing decreases 19%, and food declines 15%. He noted that only healthcare increases slightly by 6%.
Keeping Long-Term Care in Mind
Lokenauth issued a warning that the spending decline assumes you avoid senior living homes or assisted living.
“Those facilities cost more than $5,500 monthly and blow up these budgets,” he added. “If you enter long-term care, expect spending to jump 40% to 100%. That’s why I tell clients to plan for this scenario separately.”
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