How much do you actually spend in retirement?

Retired households spend an average of $40,938 per year, according to the most recent Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. Below is a little more color on how much it costs for retirees to live in U.S. and on what they spend their savings.


Housing is typically the largest cost retirees face, averaging $14,034 among people age 65 and older. This amount includes $5,194 per year for owned property versus $1,818 for rented apartments. Utilities cost retirees $3,411 annually, with electricity being the largest charge. Mortgage interest and charges ($1,475), property taxes ($2,026) maintenance and insurance ($1,693) and household furnishings ($1,260) also add to the housing costs of retirees.


Retirees age 65 and older spend an average of $5,126 annually on food. Most of this money is spent on meals at home ($3,301), with meat, poultry, fish and eggs ($687) and fruits and vegetables ($661) being the most expensive categories of food older Americans eat. They spend another $1,825 on food away from home.


Driving costs tend to decline in retirement because retirees no longer need to commute to work. But retirees still need to get around. They spend an average of $6,651 annually on transportation, including the costs for gasoline, insurance, maintenance and repairs. Retirees also spend an average of $500 per year on public transportation.

Health care

Health care costs can increase in retirement, especially if your health care needs change due to illness. Retirees spend an average of $5,094 on health care, including health insurance, medical services, drugs and medical devices.


Retirees have a lot of newfound free time to fill, and often that ends up costing money. Those age 65 and older spend an average of $2,026 on entertainment, such as fees and admissions, audio and visual equipment and hobbies. They also spend an average of $403 on their pets.


Although seniors no longer need work clothes in retirement, they still need to purchase new articles of clothing as they wear out. Retirees spend about $1,029 per year on apparel, including footwear.

Personal care

People age 65 and older purchase an average of $566 worth of personal care products and services, including shampoo and other hair care products, toothpaste and similar oral care tools, cosmetics, shaving and bath products.


Retirees spend an average of $278 annually on education costs and $140 on reading materials, including books, newspapers and magazines. Retirees in the West and Northeast spend the most on continuing education.


Seniors age 65 and older buy tobacco products, including cigarettes, cigars, loose smoking tobacco and smoking accessories that cost an average of $189 each year. Retirees in the Midwest and South spend more on smoking than retirees in the Northeast and West.


Retirees give away an average of $2,515 per year as cash contributions, perhaps as gifts to family members or donations to charitable, religious, educational or political organizations. Retirees in the Midwest are the most charitable, giving away $3,083.