By Karla Bowsher, Money Talks News
How much does it cost to get by in retirement? Pretty close to what it costs to live before retirement, according to federal data.
U.S. households led by someone who is 65 or older spend a whopping $50,178 a year, according to the latest federal data on consumer spending, which covers the 12 months from July 2017 through June 2018. By comparison, the average across all households is $60,815.
So, where is all that money going every golden year? The biggest expenses for older households are many of the same as those for younger Americans. They include:
1. Housing
A whopping one-third of older-household spending is related to housing. That translates to an average of $16,723 per year, which compares with $20,001 for the average U.S. household.
That spending includes rent and mortgage costs as well as hidden homeowner costs such as property taxes, insurance, maintenance and repairs. It does not include utilities — which are detailed in section No. 5.
2. Transportation
Commuting expenses might vanish during retirement, but that doesn’t mean all transportation costs will.
Older households spend an average of $7,472 on transportation costs such as vehicles, gas and insurance each year. That compares with an average of $9,735 for all households.
3. Health care
Now, here’s an example of an expense that increases in retirement. Older households spend an average of $6,700 on health care annually — compared with $4,924 for all households.
The bulk of consumers’ health care spending — for both older households and the average household across all ages — is on insurance. The rest is on medical services, medical supplies and drugs.
4. Food
Members of older households spend an average of $6,513 per year on food, including both the food they eat at home and eating out. That’s lower than the $7,869 spent by the average household.
5. Utilities and public services
Older households spend an average of $3,714 per year on utilities like natural gas and electricity and services such as phone and water. By comparison, the average spent across all households is $3,956.
