Most retirement advice starts with what you should save. This article starts somewhere more useful: what households your age actually spend. The government tracks it every year. Look up average retirement expenses by age and the pattern is clear — household spending falls substantially across older age groups, but not evenly. Some costs drop hard. One rises. Knowing which is which changes the number you need.
How much do retirees spend per month?
Here is the short answer. The Bureau of Labor Statistics runs the Consumer Expenditure Survey, which asks tens of thousands of American households what they spent last year. The most recent full year of data is 2024, released in December 2025.
| Household age | Per year | Per month |
| 55 to 64 | $84,946 | $7,079 |
| 65 to 74 | $65,354 | $5,446 |
| 75 and older | $55,834 | $4,653 |
Households in the 55 to 64 group spend about $85,000 a year. Households 75 and older spend about $56,000. That is roughly a third less.
What this data does and does not tell you
One caution before we go further, because it changes how you should read every number here.
The survey groups households by the age of the person who owns or rents the home. It does not sort them by whether anyone is retired. The 55 to 64 group includes many households where both people still work full time. These are age groups, not retirement stages.
The survey is also a snapshot. It shows what different households of different ages spent in the same year. It does not follow one household as it ages. The difference between the 65 to 74 row and the 75-plus row is a comparison between two sets of people. It is not a record of what happened to anyone over ten years.
That still makes the data useful. It just makes it a description of the landscape rather than a forecast of your own path.
Plan Your Retirement With the Best Financial Planning Software I’ve Found
Get a two week FREE trial of Boldin (formerly NewRetirement) personal financial planning software that Geoff uses. if you decide to keep it, then it’s only $12/mo (billed annually) – use our affiliate link: https://Go.Boldin.com/Schmidt to see if it’s for you.
Note Boldin is an affiliate relationship of Holy Schmidt!. This means if you purchase a product or use their service, we earn a small commission. This does not increase your cost.
What the research on actual retirees shows
The gap between those age groups is worth understanding, because most retirement plans assume the opposite. A standard projection holds your spending flat and raises it with inflation every year for thirty years.
Research that follows retirees over time suggests that is not what usually happens. David Blanchett, who has studied this question across several papers, found in his 2014 analysis that inflation-adjusted retiree spending declined by an average of 0.96% a year between ages 60 and 90. The declines were steepest through the middle retirement years and flatter at both ends.
That research, not the BLS age table, is the better evidence for what may happen to your own budget over time. The two point in the same direction, which is reassuring, but only one of them actually followed people.
Where the money goes at each age
Averages are only helpful when you can see inside them. Here are the five largest categories.
| Category | 55–64 | 65–74 | 75+ |
| Housing | $27,019 | $22,329 | $21,999 |
| Transportation | $15,085 | $11,414 | $6,855 |
| Food | $10,214 | $8,483 | $7,168 |
| Health care | $6,711 | $7,715 | $7,918 |
| Entertainment | $3,706 | $3,122 | $2,888 |
Four of the five fall. One climbs. We will come back to that.
Why spending is lower in older age groups
The survey does not explain why these numbers differ. It only reports them. But three explanations fit the categories, and each is worth thinking through for your own situation.
Mortgages may end. Housing is the largest line item at every age, though the shelter portion shrinks as loans get paid off. A household that finishes a mortgage at 68 removes a fixed monthly payment that never returns.
Transportation needs often fall. Transportation runs $15,085 in the 55 to 64 group and $6,855 in the 75-plus group. That is less than half. Commutes end. Two cars become one. A vehicle that used to be replaced every six years gets replaced less often.
Retirement contributions stop. This one gets overlooked. The BLS expenditure total includes contributions to retirement plans and Social Security payroll deductions, grouped under personal insurance and pensions. That category still runs $4,579 a year in the 65 to 74 group and falls further after that. Money you direct into a 401(k) while working counts toward the spending total in this survey. When the paychecks stop, those contributions and the payroll tax attached to them stop with them.
So part of the difference between these age groups is not a change in lifestyle at all. It is a category that empties out.
Health care is the cost that moves the other way
Health care is the exception, and the shape of it matters more than the size.
In dollars, the increase looks modest. Households aged 55 to 64 spend $6,711 a year. Households 75 and older spend $7,918. That is about $1,200 more.
But look at it as a share of the budget:
- Age 55 to 64: 7.9% of spending
- Age 65 to 74: 11.8% of spending
- Age 75 and older: 14.2% of spending
The dollars barely moved. The share nearly doubled, because everything around it shrank. That is why health care feels like it is taking over a retirement budget even when the bill is only somewhat higher.
Now here is the part that surprises people. Of the $7,715 that the average household aged 65 to 74 spends on health care, $5,114 is insurance premiums. That is about two-thirds. Only $1,377 goes to medical services — doctors, hospitals, procedures.
In other words, most of what the average household in this age group spends on health care is not treatment. It is the monthly cost of coverage, paid whether you see a doctor or not.
What Medicare costs in 2026
That $5,114 is not all Medicare. The category covers any health insurance a household pays for, which can include a supplement, retiree coverage from a former employer, or long-term care premiums. But Medicare sits underneath most of it, and the Medicare figures are the ones you can look up exactly. Here is what they are this year.
- Part B premium: $202.90 a month, up from $185.00 in 2025
- Part B deductible: $283 a year, up from $257
- Part A hospital deductible: $1,736 per benefit period
- Part D deductible: no drug plan may charge more than $615
- Part D out-of-pocket cap: $2,100, after which you enter catastrophic coverage and pay $0 out of pocket for covered Part D drugs for the rest of the calendar year
If your income is above $109,000 filing single or $218,000 filing jointly, you pay a surcharge on top of the standard Part B premium. About 8% of people with Part B pay it.
One option worth knowing about: the Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying them at the pharmacy counter as they come. It does not lower what you owe. It changes when you pay it, which helps if your drug costs land early in the year. You have to ask to join.
None of these numbers are enormous on their own. Together they move real money, and they move it every month for the rest of your life. This is the reason so many people find the Medicare decision harder than they expected. The choice between Original Medicare with a supplement and a Medicare Advantage plan, the drug plan underneath it, and the enrollment windows that govern both are not obvious from the outside. Getting unbiased help with that comparison is usually worth more than any other single hour you spend on your retirement budget.
Does spending keep falling? The smile and the smirk
Researchers have a name for the shape of this curve. It is often called the retirement spending smile: higher spending early while people are active, a dip through the middle years, then a rise late in life as health costs arrive.
Newer work complicates that picture in a useful way. Blanchett’s 2026 study in the Financial Planning Review, titled “How Spending Evolves in Retirement: A Smile, a Smirk, or Something Else?”, found that the shape depends on how you measure it.
For the median retiree — the household in the middle — real spending keeps declining. There is no upturn at the end. That shape is a smirk rather than a smile.
The smile appears when you average across everyone. A minority of households face large health care costs late in life, and those costs pull the average upward even though the typical household never experiences them.
That distinction matters for you. The smile describes a population. The smirk is closer to a description of a typical person. Your own late-life spending will most likely drift down, unless you are one of the households that has a major care event, in which case it will not drift at all.
Blanchett also found the decline holds across funding levels. Households with ample resources reduced real spending too, which suggests the decline reflects choice as much as constraint.
The planning implication is concrete. His research indicates a plan built on a declining spending path can support an initial spending rate roughly 20% higher than a plan that holds spending flat in real terms. That is difficult to work out in your head and straightforward to model with a decent planning tool. It is one of the few planning exercises that changes the answer by a meaningful amount.
Three things these averages hide
Before you use any of these numbers, understand what they leave out.
They are household numbers, not per-person numbers
The survey measures households, and households get smaller with age. Some of the difference between the $65,354 figure and the $55,834 figure is fewer people in the house, not one person spending less.
If you are planning for two people, do not read the 75-plus number as your future budget. Read it as an average that includes both couples and people living alone.
The average hides an enormous range
A household in rural Alabama and a household in coastal California are both in this data, averaged together into one number. So are a retiree with a paid-off house and one paying rent. Property taxes, homeowners insurance, and state income taxes vary so much by location that two households with identical habits can be $20,000 apart.
Use the categories to see the shape. Use your own bills for the amounts.
The average hides long-term care risk
This is the important one. Most households are not paying for extended care in any given year, so that cost barely registers in an average. The households that are paying face costs far above any average budget. People living in nursing homes are also generally outside the survey population altogether, which pushes the largest costs further out of view.
According to CareScout’s 2025 Cost of Care Survey, released in March 2026, the national median costs are:
- Assisted living: $74,400 a year, or $6,200 a month
- Nursing home, semi-private room: $114,975 a year
- Nursing home, private room: $129,575 a year
- In-home non-medical caregiver: $80,080 a year, based on 44 hours a week
Medicare does not pay for long-term custodial care. Neither does a Medigap policy. A single year in a nursing home costs more than twice what the average 75-plus household spends on everything combined.
Fidelity’s 2026 estimate says a single 65-year-old retiring this year will need about $185,500 for health care over the course of retirement. That figure is per person, not per couple, and readers mix this up often. It also excludes long-term care. It is a health care estimate, not a care estimate.
A realistic example
Say Linda and Ray are both 66 and both collecting Social Security. Their spending sits near the average for the 65 to 74 group, about $65,354 a year.
The average retired couple where both spouses collect receives $3,208 a month in 2026, or $38,496 a year.
That leaves a gap of about $26,858 a year, or roughly $2,238 a month, that has to come from savings, a pension, or work.
Now look ahead. If their spending follows the broad pattern in the research, their inflation-adjusted spending may ease over the next decade while Social Security continues to receive annual cost-of-living adjustments. The gap could narrow from both directions at once.
That is what a flat-spending projection misses. For many couples the hardest years financially are the first ones rather than the last ones, unless a care event changes the picture.
How to build your own number
Averages are a starting point. Here is how to turn them into something you can use.
Start with twelve months of your own spending. Pull your checking and credit card statements for the past year and sort them into the categories above. This takes an afternoon and it beats any estimate.
Subtract what stops. Retirement contributions, payroll taxes, commuting costs, a second car, work clothes. Add these up from your own statements rather than using a rule of thumb. The total varies enormously from one household to the next.
Add what starts. Medicare premiums for both spouses, a supplement or Advantage plan, a drug plan, dental and vision if you want them. Use the current-year figures, and remember they change every January.
Test the shape, not just the level. Run your plan with spending declining about 1% a year in real terms, which is close to what the research found, then run it flat. If the two answers are far apart, that difference is telling you how much cushion you have.
Plan for care separately. Do not bury long-term care in a monthly budget line. It is a different kind of risk and it needs its own decision — insurance, home equity, family, or accepting the exposure knowingly.
The one thing to take away
Retirement spending is probably not a flat line. Households 75 and older spend about a third less than households in their late 50s, and research that follows retirees over time finds inflation-adjusted spending drifting down as people age.
Health care is the one line that moves the other way, and about two-thirds of it is insurance premiums — which means the coverage you choose matters more than almost anything else in that category.
Build your number from your own twelve months of statements, not from the average. Then check the shape of the curve, not just the size of the pile.
This article is educational and is not personalized financial, tax, or medical advice. Medicare figures change every year. Confirm your own situation with Medicare, the Social Security Administration, or a qualified professional.
Add comment