Here’s the Average Amount Retiree Households Spend in a Year
There’s a reason why financial experts recommend saving for retirement as soon as possible — living on a fixed income can be difficult and it’s easy to blow through your nest egg. Daily expenses add up, especially when you’re no longer earning a paycheck and one mishap can cause a financial crisis. According to the Bureau of Labor Statistics (BLS), the average American household headed by a person aged 65+ brings home an annual pre-tax income of $60,359, with average annual expenditures totaling $57,818.
Check Out: $5 Million in Retirement Savings — Here’s How Much You Could Withdraw Per Year
Read Next: How To Get $340 Per Year in Cash Back on Gas and Other Things You Already Buy
Here’s where the majority of the money is spent.
Housing
One of the biggest expenses for Americans is housing, and retirees spend more than one-third of their income on rent or mortgage. That translates to $20,362 a year. Property taxes, maintenance and some repairs are included in that cost — however, it does not include utilities, per the BLS. An additional $4,236 per year for natural gas and electricity, and services such as phones and water, adds up.
For seniors who want to save money on housing, downsizing or relocating to a less expensive housing market are options to consider.
Learn More: I Retired Early — Here’s My Monthly Budget
Transportation
After housing, transportation is the next biggest expense for retirees, according to the BLS. Seniors spent an average of $8,172 on gas, insurance and cars in 2022.
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. In fact, 65-year-old heads of households spend $7,540 on health care annually, on average — as compared with an average of $5,850 spent by all households, per BLS.
The bulk of the expenditures in this category come from insurance, medical services, medical supplies and prescriptions.
Food
Older households spend an average of $7,306 per year on food, which includes eating at home ($4,797) and eating out ($2,509), according to the BLS. This is one cost that can decrease in retirement. Younger American households spend an average of $9,343 in total food — which included $5,703 for food at home and $3,639 for eating out.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Here’s the Average Amount Retiree Households Spend in a Year
