Advertising Disclosure

Here’s what the average middle-class retiree spends each month

Just as for working people, housing is the biggest expense

Updated:

Avatar photo
By:
Avatar photo

Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.

Photo by Anthony Fomin on Unsplash

Key Insights

  • The average retiree between ages 65–74 spent $65,149 in 2023 — about $5,429 per month.
  • Housing was by far the largest expense category, consuming $1,851/month or 34% of total spending.
  • Healthcare and transportation combined outpaced food costs, emphasizing the rising cost of living for older Americans.

Middle-class retirees in the United States are spending more than ever, with 2023 data from the Federal Reserve’s Consumer Expenditure Survey showing an average annual expenditure of $65,149 for those aged 65 to 74. 

That equates to approximately $5,429 per month, up from $5,070 the previous year — a 7% increase year-over-year.

This growing budget reflects the continued impact of inflation, especially in essential areas such as housing, healthcare, and transportation.

Housing remains the largest single expense, averaging $22,216 a year, roughly $1,851/month, accounting for 34% of all spending. Even for many older Americans who own their homes outright, ongoing costs like property taxes ($2,891), maintenance ($3,580), and utilities ($4,491) add up quickly.

Among shelter costs, owned dwellings averaged $8,693, while rented dwellings totaled $2,764 for the year.

Healthcare is a bigger expense than food

Healthcare is the second-largest spending category, with an average of $7,942/year or $662/month. This includes:

  • Health insurance premiums: $5,495
  • Medical services: $1,296
  • Prescription and over-the-counter drugs: $815

In contrast, total food spending stood at $8,566/year or $714/month, divided nearly evenly between food at home ($5,432) and dining out ($3,134). Retirees spent more on nonalcoholic beverages than on fruits and vegetables, indicating shifts in dietary habits.

Transportation consumed an average of $10,899/year — $908/month — led by vehicle purchases and insurance:

  • New and used vehicles: $4,379
  • Gasoline and other fuels: $2,382
  • Insurance and maintenance: Over $2,600

Entertainment, often considered a discretionary category, still accounted for $3,447/year, or $287/month, with pet expenses making up nearly a third of that.

Other expenses

  • Apparel and services: $1,520/year
  • Personal insurance: $4,286/year
  • Cash contributions and gifts: $2,756/year
  • Tobacco and alcohol: $951 combined

These figures underline the financial complexity of retirement, where even without a mortgage, retirees face rising costs across essential services.