How Retirement Spending Changes With Time

Julia Carlson |

New retirees sometimes worry that they are spending too much, too soon. They will scale back on spending to mitigate the risk of outliving their money. Other households may live it up and spend more than they anticipate as retirement starts to unfold. As you approach retirement, let’s look at some numbers to help you consider how to plan out your retirement spending.

The initial stage of retirement can be expensive. This can include long-awaited trips, investing in new hobbies, extended time with family, or improvements to your home or cars. The Bureau of Labor Statistics figures show average spending of $60,076 per year for households headed by early retirees, Americans age 55-64. That figure drops to $45,221 for households headed by people age 65 and older.1

When retirees are in their mid-70s, spending often decreases. The Government Accountability Office data shows that people age 75-79 spend 41% less on average than people in their peak spending years, which is in your late 40s.

With these numbers, keep in mind that there are often increased costs due to medical expenses and long-term care needs. Some suggest that retirement spending is best depicted by a U-shaped graph where it rises, then falls, then increases quickly.

With all the unknowns that can happen during retirement, a carefully designed strategy can help you be prepared and enjoy your retirement years. Consult with a retirement planning specialist to help create a plan that will adjust with you through the different stages of your retirement.



  1. Bureau of Labor Statistics, 2019

Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision. 


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