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Retirement expenses typically look different depending on how much income you have. While some people focus on affording basic amenities and keeping costs affordable, others spend more freely on housing upgrades, travel and lifestyle luxuries.
Using the latest spending data released in 2024 from the Bureau of Labor Statistics (BLS) and retirement spending details from the Social Security Administration (SSA), here’s how much the average 65-year-old retiree spends in a year. Also, how do the retirement budgets of the middle class and upper class compare?
Defining middle-class and upper-class retirees
The comparison between these two income groups comes from bls consumer expenditure survey For households where the reference person is 65 years of age or older. These income categories are widely used in retirement research and align with prior GOBankingRates coverage:
- Middle-class retirees: Annual household income $50,000 to $99,999
- Upper-class retirees: Annual household income $100,000 or more
How much does the average middle-class retiree spend per year
Middle-class retirees spend carefully. But, they still face rising costs in several key categories like housing and health care.
According to the BLS, retirees age 65 and older whose retirement income ranges from $50,000 to $69,999 spend an average of $59,599 per year. And those who make less than $100,000 above that spend about $71,506 a year.
These figures mean that middle-class retirees spend about $5,000 to $6,000 per month.
How much does the average upper-class retiree spend per year
Upper-class retirees spend significantly more overall. This is most likely because they have more discretionary income and make different housing choices.
Households in this income bracket spend an average of $106,150 per year, or about $8,850 per month. That’s about $35,000 more than the median retiree.
An earlier GOBankingRates analysis also found that upper-class retirees often spend well into six figures annually, depending on location and lifestyle.
Housing is the biggest spending gap
Housing is the biggest expense for both groups. However, upper-class retirees spend far more in real dollars bls: :
- Middle class: About $21,000 to $24,600 per year on housing
- Upper class: about $33,600 per year
Higher property taxes, larger homes and second residences also contribute to the spending gap.
Health care costs rise with income
Healthcare remains a major retirement expense regardless of income. Upper-class retirees spend slightly more on premiums, supplemental coverage and out-of-pocket care:
- Middle class: About $8,200 to $9,200 per year
- Upper class: more than $11,000 per year
The above data from the Social Security Administration expense of aged chartbook Shows that while healthcare takes up a smaller percentage of income for wealthy retirees, it’s still a big dollar figure overall.
The difference between spending on transport, travel and lifestyle
The largest differences in spending between middle- and upper-class retirees are in transportation and discretionary spending:
- Middle class: About $9,600 to $10,500 per year on transportation
- Upper class: about $13,800 per year
Retirees with higher income sources are also more likely to spend on travel, entertainment and personal services.
Food spending reflects lifestyle choices
The cost of food increases with a retiree’s income, especially when dining out. The differences can be staggering:
- Middle class: About $7,700 to $9,000 per year
- Upper class: about $12,100 or more per year
The increase in eating out may be due to travel by upper-class retirees or based on personal preference.
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