Here’s the Average Amount Retiree Households Spend in a Year
Written by
Caitlyn Moorhead
Edited by
Nicholas Morine
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Most financial experts recommend you start saving for retirement as soon as possible. Why? Because living on a fixed income can be difficult, and it’s easy to blow through your nest egg.
No matter where you are with your retirement goals, it can always feel like it’s crunch time for financial decisions that affect your bank account. Daily expenses add up, especially when you’re no longer earning a paycheck, and one mishap can cause a financial crisis. According to GOBankingRates’ research based on the Bureau of Labor Statistics (BLS), the average American household headed by a person aged 65+ has average annual expenditures totaling $57,866.
Even if you are years away from retirement, it’s always a good idea to look down the road to see how your Social Security benefits and retirement savings plans will stack up against the cost of living. Here’s a breakdown of where the majority of your income is spent in retirement.
Housing
One of the biggest expenses for Americans is housing, and retirees spend more than one-third of their income on rent or a mortgage. That translates to $20,989 a year. Property taxes, maintenance and some repairs are included in that cost. However, it does not include utilities, per the BLS. An additional $4,330 per year for natural gas and electricity, and services such as phone and water add up.
For older adults who want to save money on housing, downsizing or relocating to a less expensive market are options to consider.
Transportation
After housing, transportation is the next biggest expense for retirees, according to the BLS. Seniors spent an average of $8,663 on gas, insurance and autos. To lower this cost — if you’re not working or don’t need to drive as much — consider ditching your car and taking public transportation.
According to the American Public Transportation Association, “A household can save more than $13,000 by taking public transportation and living with one less car.”
Healthcare
Healthcare is an unavoidable expense that can increase in retirement. Average 65-year-old heads of households spend $7,933 on healthcare annually, compared with an average of $6,159 spent by all households.
The bulk of the expenditures in this category come from insurance, medical services, medical supplies and prescriptions. The averages for healthcare in general tend to spike higher than in previous years as people are continuously expected to live longer.
Food
Older households spend an average of $7,607 per year on food, which includes eating at home ($4,956) and eating out ($2,651), according to the BLS. This is one cost that can decrease in retirement, but there’s no getting around the fact that you’ve got to eat.
Methodology: For this study, GOBankingRates used the most recent data from the BLS, the 2023 Bureau of Labor Statistics Consumer Expenditure Survey for all consumer units and retired consumer units, to find the average amounts spent each year on expenditures, income, the average household size of reference person, housing tenure and educational attainment. The differences in costs for retired consumer units and all consumer units were calculated. All data was collected on and is up to date as of January 28, 2025.
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