The average retiree spends $4,345 on monthly expenses — and burns 75% of that on these 4 things. How does your own spending compare?

moneywise ^ | March 18, 2024

[where's_the_Outrage?]

The average American 65 years of age and up earns an annual pre-tax income of $55,335, and that same group spends $52,141 yearly, or $4,345 a month, according to the Bureau of Labor Statistics (BLS).

That income doesn’t leave a lot of extra cash for unexpected expenses or emergencies. The average American aged 65-69 has about $200,000 in retirement savings, according to an analysis of Federal Reserve data, and might still need to work even when they reach retirement age. High expenses often play a role.

These four categories of spending tend to eat into monthly expenses — here’s how you can shave some zeros off them.

1. Housing

Home costs represent the largest expense for retirees, accounting for 36% of their annual expenses, BLS figures show. Retirees who want to gain a leg up may want to consider downsizing as house prices remain high.

2. Transportation

If you aren’t working as much – or at all – you might want to swap the car for public transit or a bicycle. Transportation is the second-largest spending category, making up $7,160 in annual expenses for retirees, according to BLS figures.

3. Food

At $6,490, food expenditures account for over 12% of annual expenses for those 65 and over. Meal planning is one way to avoid overspending since it involves shopping for food items instead of regularly eating out — which can be an expensive habit.

4. Healthcare

Health spending makes up $7,030 in annual spending for retirees. One way to cut costs when health issues arise is to get easily affordable preventative care. That means staying up to date on screenings and vaccinations.

[NetAddicted]

Bookmark.

[Codeflier]

Yes. In theory it can drop by about 75% when you turn 65 because they drop the school taxes.

[qwerty1234]

>>The bank can not lose.

Banks lose money all the time when they have to foreclose - or maybe you don’t to remember what happened in 2008?

I bet a lot of the bankers who gave out big commercial loans on property that is now worth 25% of what the mortgage balance is are getting pretty nervous.

[Harmless Teddy Bear]

I do remember.

And the market came back because everyone needs a place to live.

The banks have the time.

[KC Burke]

I am confused. If you are on Medicare and also have a supplemental policy plan F, those should be sufficient to cover all your Doctor and hospitalization charges for any illness. If your doctor is charging beyond what they pay he is defrauding you IMHO. I had stage 3 cancer treatment and surgery between 2019 and 2021 for $400,000 and paid $160.00 total for a mistakenly ordered blood test I didn’t want to fight about.

[Trump Girl Kit Cat]

I work part time and have PPO insurance through Home Depot, I also have eye, dental, and life through Home Depot it was much less expensive than Medicare supplemental policies!! Someone on the site brought it to my attention that what I am being charged may be for deductible! I am inclined to think they are correct!!

[powerset]

How do you read and post on FreeRepublic, given that you think that computers, broadband and cell phones are all a waste of money?

(I’ve been doing computer science and software development for over 60 years, and at my age I’d give up my car sooner than my computers.)

[powerset]

How do you read and post on FreeRepublic, given that you think that computers, broadband and cell phones are all a waste of money?

At my age, since I’ve been doing computer science and software development for over 60 years, I’d sooner give up my car than my computers.

[KC Burke]

I referred to both groups as “difficult costs” for fixed income folks and those as wasteful because of their percentage of our recurring costs. I enjoy two TIVO boxes, broadband over my 0.7 acres, big cable choices for sports, two fairly new iPhones, etc. it is just crazy what it all adds up to in a rural area with little competition. Could i reduce it now that i’m past 75 — sure, but i haven’t worked on it yet.

[fatboy]

I’m not retired yet but we paid off our home and all of our other debt. Last year we put half of our retirement savings efforts into creation of an emergency fund. By my calculations we will have 26 months’ income in savings by the time my spouse retires which is end of 2025. If we keep that money in a savings account that pays a minimum of 4%, the interest alone will cover our property taxes. My personal goal is to have 5 years expenses in savings by the time I retire. Full disclosure we are maxing out on my 401, 20% in spouses 401, 15% in a taxable brokerage account and 15% into a HYSA we are quite frugal although we were not always that way.