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Retirement lifestyle is different for everyone. Some retirees can barely make ends meet, while others have the money to live out their golden years comfortably.
By age 70, the average person has a 401(k) balance of $250,000, according to fidelity. No two retirees have the same budget, but members of the upper class may have many things in common. Keep reading to get an idea of what a wealthy 76-year-old retiree’s budget might look like.
put a number on money
The definition of wealth is different for everyone and can change during different stages of life, said Kevin C. Feig, certified financial planner (CFP) and founder. Walk you to wealth.
“Personally speaking, I define wealth as choice,” he said. “The more choices you have, the richer you will be.”
At 76 years old, he said this could be anything from buying low-cost Christmas gifts for your grandchildren to opting to fly first class to visit them for the holidays.
“Generally speaking, I’ve found from my older customers that it’s more about human connections and experiences than ‘more stuff,'” he said. “They spend the bulk of their money on leisure activities with family and friends, gift giving, and health care – both preventive and non-preventive.”
Jonathan Vance, CFP, Enrolled Agent (EA) and Financial Planner Vance Financial Planning Agreed that wealth cannot be measured by any fixed number.
“Most of the retired clients I’ve worked with have entered retirement with total financial assets — think IRAs, Roth IRAs, brokerage accounts, cash, etc. — ranging from a few hundred thousand to a few million dollars,” he said. “While the concept of ‘a few million dollars’ sounds like a lot, it’s important to remember that these retirees are relying on the dollars in these accounts to at least partially cover living expenses over 20 to 30 years.”
In this case, he said the term wealth is better defined as the amount of confidence a retiree has in meeting his or her spending needs.
“The irony is that those with larger portfolios often pay more attention to frugality,” he said. “The high savings rate that built their nest egg is a difficult habit to break, which often makes it practically difficult to spend more after retirement.”
Estimating a Wealthy Retiree’s Monthly Budget
In 2024, the average retiree’s living expenses totaled $59,616, according to Federal Reserve Bank of St. Louis. However, retirees with money aren’t necessarily living average lifestyles.
The monthly budget is the most important number in retirement planning, Vance said.
In his area of southwest Missouri — where he said the cost of living is lower — about 80% of his clients fall between $6,000 and $12,000 a month, net after taxes, he said.
“This limit reflects total lifestyle spending or the amount that comes into their checking account from all sources — Social Security, pensions, portfolio distributions, etc.,” he said.
When it comes to what wealthy retirees are spending their money on, it’s probably not housing. By the mid-’70s, Vance said most of his clients had paid off their homes.
In this case, he said his spending generally falls into three broad categories – non-discretionary (about 50%), discretionary (about 35%) and family and/or charitable giving – (about 15%).
For example, clients in early retirement might have a monthly budget of 50% non-discretionary spending, 40% discretionary spending and 10% giving, he said. However, this may shift to 50% non-discretionary spending, 25% discretionary spending, and 10% giving by their 90s.