Average Retiree Spend

[USGrant1962]

AS a tangent to the "food and grog" thread, I just came across this article summarizing average retire household spending. It is a little more accessible than the BLS Consumer Expenditure Survey (well, a lot more accessible).

https://www.usatoday.com/story/mone...hat-does-an-average-retirement-cost/35455427/

https://www.bls.gov/cex/

An average U.S.A retiree household (run by someone 65+) spends $3,800 per month - which I believe is pretty much in line with the median household income in the U.S.A.

Interesting tidbits:

Food = $483/month, don't know if this includes grog.
Health Care = $499/month, it will be nice when Medicare kicks in!
Entertainment = $197/month, if this includes vacay I'm like 10X this.

I suspect this group is frequently higher than the numbers in the article, and the ones still in pre-65 ER (as opposed to what do we call it? Full R?) might have a different spending profile.

 

[joeea]

Some day I hope to meet an average retiree.

 

[ERD50]

Some day I hope to meet an average retiree.

And their 2.6 children.

-ERD50

 

[aja8888]

AS a tangent to the "food and grog" thread, I just came across this article summarizing average retire household spending. It is a little more accessible than the BLS Consumer Expenditure Survey (well, a lot more accessible).

https://www.usatoday.com/story/mone...hat-does-an-average-retirement-cost/35455427/

https://www.bls.gov/cex/

An average U.S.A retiree household (run by someone 65+) spends $3,800 per month - which I believe is pretty much in line with the median household income in the U.S.A.

Interesting tidbits:

Food = $483/month, don't know if this includes grog.
Health Care = $499/month, it will be nice when Medicare kicks in!
Entertainment = $197/month, if this includes vacay I'm like 10X this.

I suspect this group is frequently higher than the numbers in the article, and the ones still in pre-65 ER (as opposed to what do we call it? Full R?) might have a different spending profile.

DW and I spend a good bit more than $499/month on healthcare on Medicare, Medigap insurance, Part D, etc. DW's OOP drug costs are more than $499/month. But she has a lot going on.

I suppose if you don't get sick or have any real medical issues, $499 will be OK, until, of course, you get real sick. (which of course is in the cards for all of us)

 

[meierlde]

DW and I spend a good bit more than $499/month on healthcare on Medicare, Medigap insurance, Part D, etc. DW's OOP drug costs are more than $499/month. But she has a lot going on.

I suppose if you don't get sick or have any real medical issues, $499 will be OK, until, of course, you get real sick. (which of course is in the cards for all of us)

499 is about right for one person with no IRRMA in medicare, includes a plan f medigap, a part D drug plan, a dental plan and a vision plan. (does not include any out of pocket costs) So I would say that the medical cost number is far off for a couple.

 

[USGrant1962]

499 is about right for one person with no IRRMA in medicare, includes a plan f medigap, a part D drug plan, a dental plan and a vision plan. (does not include any out of pocket costs) So I would say that the medical cost number is far off for a couple.

Well, per the article the numbers are per household so say 1.5 people.

 

[NW-Bound]

An average U.S.A retiree household (run by someone 65+) spends $3,800 per month - which I believe is pretty much in line with the median household income in the U.S.A.

That's $46K/year. My mother, a widow who lives alone in her house, spends less than that. Of course she does not travel much or have expensive pursuits.

So, $46K/average household is a believable number. The typical American retiree household does not travel much, nor blow much dough.

 

[24601NoMore]

Where are Fed and State taxes? And only $567/mo for Transportation? Are these people just taking Uber/Lyft and public transportation?

Here in the relatively LCOL midwest, our car payments alone run > $567 / month. Add gas, insurance, etc and we're at $1K/mo easy.

And HC @ $499 per "household"? No freaking way. Not unless you're fully on Medicare (even then doubtful) or ACA subsidies.

 

[DrRoy]

I'm at 2.5X the average, but medical is much higher, travel is my largest expense and the average had zip, yea, and taxes.

 

[jjflyman]

Probably a lot depends on your location. We are in West Michigan where the cost of living is reasonable. My parents (late 80's) have been retired for 30+ years, and get about 30K per year SS+pension (plus my dad got heath insurance paid thru General Motors until Medicare). They tell me you need far less than the "experts" say you need. They have lived a fine (but modest) retirement.

 

[athena53]

DW and I spend a good bit more than $499/month on healthcare on Medicare, Medigap insurance, Part D, etc. DW's OOP drug costs are more than $499/month. But she has a lot going on.

I suppose if you don't get sick or have any real medical issues, $499 will be OK, until, of course, you get real sick. (which of course is in the cards for all of us)

I agree. I'm paying $360/month for Medicare B, Medicare Supplement and the Prescription Plan. Zero prescriptions at the moment but an emergency root canal in March ran over $1,000. That, plus 4 dental cleanings a year because I have dental implants, puts me over the average- but then I'm guessing people who spend $46K/year don't have dental implants.

And I suppose that if you're retired and have the level of income that drives spending of $46K/year you don't owe taxes. Mine run $1,000/month.

Of course they bring up the old rule that you need to replace 70-80% of your pre-retirement income in retirement. I'm living very well off about 60% because I saved a lot of what I made and my taxes are lower.

 

[jebmke]

Some day I hope to meet an average retiree.

Volunteer for AARP TaxAide. You will meet a lot of them.

 

[rodi]

This doesn't surprise me. My in laws lived on less than $35k. Paid for modest house and habits born from growing up in the depression. MIL clipped coupons and shopped sales like a pro. Not a lot of restaurant meals and no drinking. They had a paid off used car. They spent 2 months at the Jersey shore in a paid for shared family house.

When FIL died MIL was hitting by on under $30k. Until she entered a memory unit. Now her total expenses are about $70k. At almost 92 she is in Medicaid spend down... She has about 2 more years of savings to cover the gap between her pension and the memory Care unit costs.

 

[aja8888]

I agree. I'm paying $360/month for Medicare B, Medicare Supplement and the Prescription Plan. Zero prescriptions at the moment but an emergency root canal in March ran over $1,000. That, plus 4 dental cleanings a year because I have dental implants, puts me over the average- but then I'm guessing people who spend $46K/year don't have dental implants.

In my post I did not include the extensive dental work I had done last year or the two dental implants @ $4500 each. Also, I have asymmetric hearing and will need hearing aids at some point. Medicare does not cover them ($5000?).

The averages could be including costs like these but we don't know that. It would be interesting to know the age range of the Medicare people who they used in the statistic.

 

[athena53]

In my post I did not include the extensive dental work I had done last year or the two dental implants @ $4500 each. Also, I have asymmetric hearing and will need hearing aids at some point. Medicare does not cover them ($5000?).

The averages could be including costs like these but we don't know that. It would be interesting to know the age range of the Medicare people who they used in the statistic.

My guess is that the "average" retiree goes without. You can live without dental implants or hearing aids although both greatly enhance the quality of life. BTW, try Costco for hearing aids if you have one near you; they've been recommended here many times and the last pair DH got there cost $2,600.

My FaceBook feed frequently includes retirement-related "Suggested Posts", including the occasional Yahoo link to "Affordable Dental Care Plans for Seniors" that's nothing but a Yahoo search. The comments are pretty sad. Lots of complaints about how dental ought to be included in Medicare. I'm assuming they want it for no extra premium!

 

[pb4uski]

....Health Care = $499/month, it will be nice when Medicare kicks in! ....

My Mom: Medigap $208, Part B $97, Part D $49: Total $355

$499 for a household sounds like a good deal.

 

[aja8888]

My guess is that the "average" retiree goes without. You can live without dental implants or hearing aids although both greatly enhance the quality of life. BTW, try Costco for hearing aids if you have one near you; they've been recommended here many times and the last pair DH got there cost $2,600.

Costco, who ran my test, said I need to go see a specialist for further testing and remedies. I suppose I could get devices through them when the time comes.

 

[athena53]

Costco, who ran my test, said I need to go see a specialist for further testing and remedies. I suppose I could get devices through them when the time comes.

Yeah, I guess it depends on the test results but they're worth a try. When DH was alive we got MANY mailings from hearing aid places, all offering free tests to get you in the door. I suspect the profit margins are pretty generous. I'm "only" 65 but I figure I'll be getting more of these mailings soon.

My Mom: Medigap $208, Part B $97, Part D $49: Total $355

$499 for a household sounds like a good deal.

The averages probably include some of the Medicare Advantage plans, which cover a lot more for less money (some include dental and some have no additional premium) but have a vary narrow network. There are probably also the usual people who skip signing up for Medicare B, supplements and the prescription plans and then get hit with giant surcharges when they finally do buy coverage when they develop expensive health problems.

 

[aja8888]

Yeah, I guess it depends on the test results but they're worth a try. When DH was alive we got MANY mailings from hearing aid places, all offering free tests to get you in the door. I suspect the profit margins are pretty generous. I'm "only" 65 but I figure I'll be getting more of these mailings soon.

You sure will, along with a wide variety mailings of prepaid funeral expenses and financial "opportunities" (and the free dinner presentations).

 

[CRLLS]

My Mom: Medigap $208, Part B $97, Part D $49: Total $355

$499 for a household sounds like a good deal.

DW and I pay right around $420 per mo. for Medicare Part B, F-HD supplements and Walmart drug plans. This does not include optical or dental which we self-insure. Supplement plan costs vary widely as do drug plans. I suspect that the $499 mentioned does not include Plan F (reportedly the most popular supplement) and high end Plan D's. If it did, I'd be all over that.

 

[VanWinkle]

Volunteer for AARP TaxAide. You will meet a lot of them.

And many below the average. Some are living on less that 15000 per year and feel they are not poor. It really opens your eyes to deal with the near poverty elderly. They don't complain, they just get by every year.

 

[daylatedollarshort]

I have a couple of retired, widowed acquaintances in the Bay Area who said they had trouble spending more than $30 - $35k a year so they end up spending the extra on their grandchildren. They have paid off homes they fixed up before they retired and low property taxes due to Prop 13 in California. They seem to live pretty well. Talking to them was an eye opener for me when we were thinking about retiring.

 

[Sunset]

And many below the average. Some are living on less that 15000 per year and feel they are not poor. It really opens your eyes to deal with the near poverty elderly. They don't complain, they just get by every year.

We know some single 80+ folks living in their paid off home, and they get by on about $20K -> $25K per yr.
Of course one needs hearing aids and doesn't have them, and they never traveled anywhere in the past 20 year.

 

[jkern]

I was never really interested in statistical averages. It rarely reflects one's own reality. Standard of living for two living in SF Bay Area with no debt and paid off house:


Essentials (housing, food, medical and transportation): $45K
Routine spending: (Recreation, entertainment, gifts, travel, etc): $30k
Non-routine spending: (cars, appliances, roof, unexpected stuff, etc): $30k
Taxes: $15k




Total approximately $120k per year to fully sustain standard of living.

 

[scrabbler1]

I wish the article had actually specified the number of people in the household. Or, perhaps, given separate figures for 1-person and 2-person households. How useful is it to show an analysis for an impossible household count of 1.5 people, for example?