A Breakdown of Housing, Food, and Other Expenses

Comparison is often called the thief of joy, but when it comes to retirement, it can be a valuable tool, helping you understand how much you might need to save and spend in retirement to maintain your preferred lifestyle.

According to the latest available federal data, which is from 2023, the total annual spending for individuals aged 65 and older in the United States averaged $60,087. This comes out to just over $5,000 per month. By far the biggest spending categories were housing, food, transportation, and healthcare. However, those 65 and older—many of whom are retired, but some who may not be—are also spending a significant portion of their income on entertainment.

To develop your own spending plan for retirement, see how your purchasing habits stack up to those of people age 65 or older.

Housing, Food, and Transportation Costs

The largest share of annual expenses goes toward housing, at $21,445 per year, or about 36% of annual spending.

Total monthly housing costs: $1,787.09

This is further broken down into:

• Rent/mortgage/taxes/maintenance: $12,545
• Utilities/fuel: $4,307
• Furnishing/housekeeping/other household expenses: $4,593

Transportation is the next largest category of expenses, totaling even more than food. Transportation costs $9,033 per year, or approximately 15% of the annual budget. This category includes vehicle purchases (both used and new), as well as fuel, maintenance, insurance, and any public transportation costs.

Total monthly transportation: $752.75

Those aged 65 and older averaged a total of $7,714 per year on food, or approximately 12.8% of their annual spending. That included food both at home and away from home. Alcoholic beverages are also included in monthly food costs, but these expenses are minimal, totaling just $41.17 per month.

Total monthly food costs: $642.84

Healthcare Costs in Retirement

Healthcare was also a significant spending category for individuals aged 65 and older.

Older adults generally spend more on healthcare than younger individuals, as they’re more likely to deal with health issues and may be charged higher health insurance premiums.

On average, individuals aged 65 and older spent $8,027 on healthcare in 2023, which is approximately 13.4% of their annual spending.

Total monthly healthcare spending: $668.92

The largest portion of medical expenses was spent on health insurance itself:

Other Spending in Retirement

Outside of those four big categories, retirees spent an additional $13,870.

Entertainment was one of the larger categories, at $2,898 per year.

Total monthly entertainment spending: $241.50

This included movie tickets, pet care, camping, exercise equipment, sporting event costs, and more.

Other spending also included expenses for reading, such as purchasing books or e-book readers, as well as tobacco products and educational expenses.

Other large categories of spending were cash contributions, which include alimony, child support, supporting students away from home, and charitable donations ($3,132 per year).

Total monthly cash contributions: $261

Lastly, the personal insurance or pensions ($3,277 per year) category comprises insurance costs, such as life insurance, but excludes car, health, and home insurance.

Total monthly personal insurance and pension spending: $273.09

The Bottom Line

In 2023, the average person in the U.S. aged 65 or over spent just over $5,000 per month. Of this, the largest portion was spent on housing, including rent, mortgage, utilities, and other related expenses.

The other top spending categories were transportation, healthcare, and food. While not all individuals aged 65 and older are retired, these spending patterns may provide an approximation of what the average American currently spends in retirement, as the average retirement age for both men and women is below 65.