Your Retirement Budget After 75: What Drops and What Doesn’t
Written by
Jordan Rosenfeld
Edited by
Angela Corry
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Retirement spending isn’t static and spending in early retirement can look different than later. Some expenses fade naturally as lifestyles slow down, while others quietly grow into major budget items. Understanding what tends to drop — and what doesn’t — can help retirees and those nearing retirement plan for a phase of life that often comes with fewer surprises but higher stakes.
What Drops After 75: Travel, Transportation and Lifestyle Spending
Spending patterns often peak in early retirement due to travel and leisure then taper off in later years due to lifestyle changes, according to Adam Spiegelman, CFP, founder and wealth advisor at Spiegelman Wealth Management.
“Travel is by far the most significant expense that decreases for most retirees after 75,” Spiegelman said. “People slow down for a variety of reasons — physical frailty, loss of interest or simply feeling they’ve seen everything they wanted to see.”
Jason Dall’Acqua, a CFP, founder and financial advisor at Crest Wealth Advisors also finds that transportation expenses such as gas and maintenance, entertainment and shopping expenditures tend to see the biggest declines the older retirees get.
What Stays the Same: Core Housing And Everyday Costs
While some expenses fall, others remain steady. Dall’Acqua said, “Certain housing expenses are always going to occur regardless of where one lives, such as property tax and insurance for homeowners or rent for non-homeowners.”
Though downsizing can reduce some housing costs, savings are not guaranteed, Spiegelman said. “The math doesn’t always work out … purchasing a new property at today’s prices with today’s interest rates and new property tax assessments can actually cost more than staying put.”
And of course daily living expenses like food, utilities and basic services will persist.
What Increases After 75: Healthcare, Taxes And Caregiving
The most significant budget pressure in later retirement comes from healthcare costs, Spiegelman said, noting that Medicare doesn’t shield retirees from higher costs.
“A couple could easily be paying $1,500 to $2,000 or more per month just for healthcare coverage.”
Those costs can climb too; as required minimum distributions grow, they push income higher, which triggers IRMAA surcharges that increase Medicare costs substantially, he pointed out.
Long-term care is an even bigger wildcard, Spiegelman explained, as it can range from as little as $35 to $45 per hour for informal in-home help, or tens of thousands in costly round-the-clock care.
“With over 50% of people requiring some level of care during their lifetime, it is important to plan for,” Dall’Acqua said.
Other rising costs may be less obvious, Spiegelman noted. “Dining out tends to increase as people lose the desire or ability to cook. And caretaker costs can become a major line item as well.”
He also pointed out that charitable giving often increases later in life.
How To Plan for These Shifts Before You Reach 75
Waiting too long to adjust your plan can limit your options, both experts warn.
“Honestly, if you’re waiting until 75 to adjust your budget, it’s largely too late,” Spiegelman said. “These conversations and plans should have been happening twenty, thirty, even forty years earlier.”
He recommended trying to save up to 20% of your gross income, running the numbers on what care might actually cost and building that into your long-term financial plan.
Dall’Acqua added that planning for declining expenses can actually be freeing: “Doing so may allow you to feel comfortable spending more in the early years of retirement if you have the financial means to do so.”
The key is planning well before you get there.
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