The Average Middle-Class Retirement Budget at Age 65 vs. 75
Written by
Chris Adam
Edited by
Zuri Anderson
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If you rely on retirement calculators, one money expert has a word of advice — make sure you take a careful look at the results.
“Here’s my framework from decades in finance: Plan for higher spending in your 60s, moderate spending in your 70s and lower spending, except healthcare, in your 80s,” said Andrew Lokenauth, founder of the blog Fluent in Finance. “Most retirement calculators miss this. They assume flat spending throughout retirement, which leaves people either overspending early or hoarding money they never enjoy.”
GOBankingRates breaks down how different retirement budgets look at age 65 compared to age 75.
Planning for Retirement Budgets
Most middle-class retirees at 65 spend around $5,400 per month, roughly $65,000 yearly, per Lokenauth. He said at age 75, monthly spending drops to about $4,400.
Lokenauth said the decline surprises most people because they assume healthcare costs will skyrocket. While healthcare does increase slightly to $700 monthly, other categories plummet, he noted.
“That’s a big shift from working years,” Lokenauth added. “During my years on Wall Street, I watched clients struggle with this transition because they underestimated how spending patterns shift.”
Retirement Budgets at Ages 65 and 75
Here’s a look at what Lokenauth said are expected monthly budgets for ages 65 and 75, based on his work on Wall Street and with clients.
A 65-year-old’s monthly budget (total $5,400):
- Housing: $1,850
- Transportation: $900
- Healthcare: $660
- Food: $610
- Entertainment: $290
- Other: $1,090
A 75-year-old’s monthly budget (total $4,400):
- Housing: $1,700
- Healthcare: $700
- Transportation: $680
- Food: $570
- Entertainment: $200
- Other: $550
Keeping Budget Numbers in Perspective
Lokenauth noted the biggest drops happen in transportation (24% decrease) and entertainment (31% decrease). Housing falls by just 8%, showing it remains a major expense but becomes more manageable, according to Lokenauth.
“I work with some clients who moved to the city for retirement to prepare for when they may not be able to drive,” said Marguerita Cheng, certified financial planner (CFP) and CEO of Blue Ocean Global Wealth. “City living may not be for everyone. I also work with other clients who moved to continuing care communities for more stress-free living.”
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