U.S. households between the ages of 65 to 74 spend $15,079 a year (or 45 percent of their total median income) on home and related expenses, such as mortgage payments, property taxes and rents. But this figure can vary depending on location, according to a new study from the Employee Benefit Research Institute, titled “Geographic Variation In Spending Among Older American Households.
Past research on household spending has focused on family size, income, employment status, marital status and health status, whereas a less-explored characteristic is geographic location, according to the study’s author, Sudipto Banerjee, Ph.D. “Two retired households that are very similar in all observables except location might spend very different amounts because the costs of housing, medical care and other items vary widely across the country,” comments Dr. Banerjee.
Midwesterners, for example, spend the most on housing each year, $16,464, followed closely by households living in the West ($15,521) and Northeast ($15,393). In addition to housing, the EBRI study examined costs related to food, health, transportation, clothing, entertainment and other miscellaneous expenses, broken down by various age brackets that included 50 to 64, 65 to 74, 75 to 84 and over 85.