New research from the Employee Benefit Research Institute shows that consumer spending declines as people transition from early retirement (often referred to as the go-go years), to middle retirement (the slow-go years), to late retirement (the no-go years).
Average household expenditures totaled $55,000 for people 50-64 in 2017 versus $50,000 for those 65-74, and $39,000 for those 75 and older, says retirement expert Robert Powell, who summarized key findings for an article published in USA Today and offered tips to help consumers adjust.
Other research highlights:
- Housing represents the largest spending category for every age group: 45.9 percent of expenses ($25,000 in 2017) for those 50-64; 44.9 percent ($21,000) for those 65-74, and 45.6 percent ($18,000) for those 75 or older;
- On average, households spent less on food as they grew older, and the average dollar amount spent on work-related expenses, such as transportation and clothing, declined by age;
- The average amount spent on entertainment declined by age, and older households allocated a larger share of their budgets to gifts and contributions; and
Expect to spend a greater percent of your income on health care. In 2017, health care as a percentage of expenses in retirement rose from 7.8 percent for people 50-64 to 9.6 percent for those 65-74 and to 10.6 percent for those 75 or older.