Hey retirees, you might want to cut back a bit on those expenses a bit unless you want your money to run out before you do.
According to the latest federal data on consumer spending, U.S. households led by someone who is 65 or older spend an average of $50,178 a year, which is only $10,637 less than the average across all households.
An analysis of the data, which spans July 2017-June 2018, from a May 17 post on Money Talks News shows that the over-65 crowd is still spending the biggest percentage of their retirement income on housing. Ideally, of course, you would like to have your house, townhome or condo paid off before you retire, but that just isn’t the case for many Americans these days.
A 2018 “Retirement and Mortgages” survey by American Financing, a national mortgage banker, found 44% of Americans age 60 to 70 have a mortgage when they retire, with 17% saying they may never pay it off. Another 32% predict they will be paying their mortgage for at least eight more years.
Top 5 retiree expenses
Here are the top 5 expenses for the 65-and-older crowd, according to the Money Talks News analysis of federal data:
- Housing: About one-third of spending for those 65 and older is related to housing, translating to an average of $16,723 per year. The average U.S. household spends $20,001 on housing, or about $1667 per month. The figure includes rent or mortgage payments and property taxes, insurance, maintenance and repairs but does not include utilities.
- Transportation: Older households spend an average of $7,472 per year on transportation costs such as vehicles, gas and insurance (compared to $9,735 for all households).
- Health Care: Unsurprisingly, older households spend more on health care annually than the country at large. Older households spend an average of $6,700 on health care compared with $4,924 for all households.
- Food: Members of older households spend an average of $6,513 per year on food, including eating out (compared to $7,869 for all households).
- Utilities and public services: Older households spend an average of $3,714 per year on utilities including natural gas, electricity and services such as phone and water (compared to $3,956 for all households).