Retirement Read Time: 2 min

How Retirement Spending Changes With Time

New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern may be legitimate. Some households "live it up" and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much.

By The Numbers

The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of $70,570 per year for households headed by pre-retirees, Americans age 55-64. That figure drops to $52,141 for households headed by people age 65 and older. For people age 75 and older, that number drops even further to $45,820.1

Spending Pattern

Some suggest that retirement spending is best depicted by a U-shaped graph -- It rises, then falls, then increases quickly due to medical expenses.

But a study by the investment firm BlackRock found that retiree spending declined very slightly over time. Also, medical expenses only spiked for a small percentage of retirees in the last two years of their lives.2

What's the best course for you? Your spending pattern will depend on your personal choices as you enter retirement. A carefully designed strategy can help you be prepared and enjoy your retirement years.

1. Bureau of Labor Statistics, 2023
2. BlackRock.com, 2023. (Based on a 2017 landmark study that looked at retirement spending.)

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Is a SEP-IRA Right for Your Business?

Is a SEP-IRA Right for Your Business?

For some, the idea of establishing a retirement strategy evokes worries about complicated reporting and administration.

Ways to Supplement Your Medicare Coverage

Ways to Supplement Your Medicare Coverage

There are numerous ways to supplement your Medicare insurance coverage. This article helps you explore your options.

Replacing Your Medicare Card

Replacing Your Medicare Card

Learn how to replace your lost, stolen, or damaged Medicare card in this helpful article.

 

Have A Question About This Topic?







Thank you! Oops!

The Cost of Medical Care

Learn about the risks of not having health insurance in this informative article.

Estate Management Checklist

Is your estate in order? This short quiz may help you assess your overall strategy.

Pickleball in Retirement

Learn about the latest sport to sweep the nation with this informative article.

View all articles

Paying Off a Credit Card

Enter various payment options and determine how long it may take to pay off a credit card.

What Is My Risk Tolerance?

This questionnaire will help determine your tolerance for investment risk.

How Much Home Can I Afford?

With a few simple inputs you can estimate how much of a mortgage you may be able to obtain.

View all calculators

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

View all presentations

Questions to Consider When Buying a Vacation Home

Doing your research is key before buying a vacation home.

Bursting the Bubble

Tulips were the first, but they won’t be the last. What forms a “bubble” and what causes them to burst?

Stay Safe with a B.O.P. At Your Back

Learn about the advantages of Business Owner Policies with this highly educational and fun animated video.

View all videos