The Average Monthly Retirement Budget Is $4,581 — Can Gen Z Live Off That?
Written by
Chris Adam
Edited by
Daria Uhlig
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While retirees often have less income than working individuals, they don’t necessarily live on less money after retirement.
As of 2022, the most recent year for which data is available, the average income for Americans ages 65 and older is $60,350, and the average expenditure per retiree (regardless of age) is $54,975, or about $4,581 a month, according to the Bureau of Labor Statistics.
The average income for those 25 years of age and younger is $48,233 before taxes. It’s $89,514 for those ages 25 to 34. Spending for these groups is $46,359 and $67,883, respectively.
While younger members of Gen Z — which includes young adults up to age 27 — would find themselves with cash to spare on a retiree’s budget, living on $4,581 per month would get increasingly difficult as the years pass.
With that in mind, here’s a look at how Gen Z would fare on a retiree’s budget for some of both generations’ largest expenses.
Shelter
Shelter is the biggest annual expense for retirees. On average, they spend $11,186 for shelter.
Those under 25 years of age spend an average of $11,737 annually on shelter. For those 25 to 34, the amount is higher, at $15,429. Looking at these figures, it appears that retirees’ housing budget is realistic for Gen Z.
Transportation
Transportation is another big expense for retirees. They spend $8,065 on transportation.
The average annual transportation expenses for Gen Z are a bit higher, per the BLS. Those under 25 spend an annual average of $9,583. For people ages 25 to 34, it’s $12,089. While public transportation costs are similar for both Gen Z and retirees, Gen Z spends significantly more on vehicle purchases, fuel and other expenses.
Gen Z’s work commutes would make it difficult to stick within a retiree’s transportation budget.
Healthcare
It might be no surprise that healthcare costs are high for retirees. According to the BLS, retirees spend $7,505, making it their third-largest expense.
Those under 25, on the other hand, spend an average of $1,353 on annual healthcare expenses. That goes up to $3,560 for those between the ages of 25 and 34. Even at the upper ages for Gen Z, this generation can easily keep their costs within retirees’ healthcare budgets — and have thousands left to put toward other uses.
Food
Retirees also spend a good deal of their annual income on food. In fact, food at home expenses average $4,938 for a retiree’s household, and food away from home — restaurant meals — average $2,412.
At $5,898 per year, food is the third-largest expense for those under age 25. But $2,551 of that goes to restaurant meals. By eating at home more often, Gen Z could match retirees’ food budgets
Apparel
The average annual apparel expenses for people ages 65 and older is $1,130.
The spend is similar for younger members of Gen Z. Those under age 25 spend an average of $1,184 for apparel. That number grows to $2,249 for those between the ages of 25 and 34.
It’s interesting to note from the BLS data that apparel expenses, like total expenditures, increase each year up to ages 45 to 54. Then they slowly start to decrease as individuals head toward retirement.
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