After retirement, people typically spend less money, but the latest data shows that today’s elderly in the United States have higher living costs than the previous generation of the same age. In 2024, the average expenditure of households aged 75 and older is still lower than middle-aged households, but it has significantly increased compared to households of the same age 30 years ago.
Investopedia calculated based on data from the U.S. Bureau of Labor Statistics (BLS) that after adjusting for inflation, the average expenditure of households aged 65 and older in 2024 is 38% higher than that of same-age households in 1990; while those aged 75 and older are 50% higher. During the same period, the average actual expenditure of all U.S. households increased by 15%. Housing plays a significant role in this increase.
In 2024, the average annual expenditure of households aged 65 and older in the U.S. is $61,432, equivalent to approximately $5,120 per month. Housing expenditure accounts for about 36% of the total expenditure, totaling $22,193; followed by transportation at $9,538, food at $7,940, and healthcare at $7,799. Housing expenditure for households aged 75 and older accounts for approximately 39%.
In 2024 U.S. dollars, the housing expenditure of households aged 65 and older has increased from $14,465 in 1990 to $22,193, an increase of $7,728 per year. Many Americans reach retirement age still burdened with housing debt; even after paying off the mortgage, costs such as property taxes, insurance, and maintenance do not disappear.
Healthcare is also a significant expense for elderly households. According to BLS microdata, healthcare expenditure for households aged 75 and older in 2024 accounts for about 14% of total expenditure, while for households under 35, it is less than 5%.
However, these averages cannot be directly applied as the bill for a typical retirement household. BLS reports average household expenditure, not the median, so a few high-expenditure households can skew the average, meaning that the actual expenditure for most households may be lower than the averages stated above.
Family size is also a factor to consider. Household sizes for those aged 75 and older are typically smaller, leading to lower total household expenditure compared to middle-aged households. This is partly due to having fewer people in the household, so it cannot be assumed that every expense decreases after retirement.
Based on 2024 data, households aged 75 and older have an average annual expenditure of approximately $55,000; in comparison, the average expenditure for households aged 45 to 54, as reported by BLS, is $100,327.
In other words, while household expenses may decrease after retirement, the retirement lifestyle today is not as cheap as many people might imagine.