Summary
- The average amount of spending in retirement per month is around $5,119 a month.
- The top retirement expenses are housing, healthcare, food, and insurance.
- The cost of living for retirees by state changes depending on the state in question.
- Knowing how to spend money in retirement can be improved by having a financial advisor.
What is the average cost of spending in retirement?
According to the Bureau of Labor Statistics (BLS), the average income of someone 65 and older in 2026 was $60,580.
The average expenses in this age bracket were between $3,813 and $4,345 per month.
The expenses of younger retirees were greater than those of older retirees: $4,870 for people between the ages of 65 and 74 and $3,813 for those 75 and older.
Studies show that the average retirement spending per year is between 55% and 80% of a person's annual salary. Those with an active lifestyle will see an increase in spending of around 6% over those with a less active lifestyle.
15% of living expenses are related to healthcare expenses after retirement, year in and year out.
As the population approaches retirement age, they will find they need to adjust their spending habits and budgets to accommodate upcoming retirement expenses.
What are the top retirement expenses?
After leaving the workforce, there are a myriad of retirement expenses to consider.
Some of the most prevalent ones include healthcare, medical insurance, housing, transportation, food, and debt repayment.
What is the cost of healthcare in retirement?
Healthcare can be one of the biggest retirement expenses.
A typical couple aged 65 who retired in 2023 faces long-term medical expenses of approximately $315,000.
Individuals should plan for over-the-counter medications, long-term care, and dental care costs.
Medicare may pay for some health care in retirement but does not cover all of it. HSA funds and long-term care insurance can help consumers prepare for healthcare planning costs.
In total, the median retiree spent $4,311 on medical expenses.
In 2026, the monthly premium for Medicare Part B, which is medical insurance, was $202.90.
The cost of retirement is often dominated by healthcare expenses, increasing the need for a solid medical and healthcare insurance plan.
What is the cost of housing in retirement?
Another cost that adds to the average retirement budget is housing. Housing - which includes mortgage, rent, property tax, insurance, maintenance, and repair costs - is the largest cost of retirement.
The average retiree household spends an average of $27,790 per year ($2,315 per month) on housing expenses, which represent almost 35% of annual expenditures.
In 2026, federal housing subsidies only reached 36.5% of eligible older households. Nearly 20% of older adults are putting more than 30% of their income toward housing, with more than 11 million households headed by people over 65.
Many people over 65 move into a retirement community, but the average cost per month varies greatly depending on the location, type of housing, and amenities offered.
Retiring to a senior living community may also entail paying an upfront fee, monthly fees, or both. The upfront fee can range from $100,000 to $1 million, depending on what's covered.
What is the cost of transportation in retirement?
Transportation in retirement can include vehicles, gas, insurance, maintenance and repairs, car rental, leases, payments, and public transportation.
The average retiree household spends $7,492 a year ($624 a month) on transportation compared to $10,742 ($895 a month) for the average U.S. household.
Almost 80% of seniors over age 65 live in car-dependent suburban and rural communities, yet transportation is often one of the most overlooked costs of the average retirement budget.
On average, gasoline and motor oil cost $1,757 per year, vehicle insurance totals $1,063, and maintenance/repairs amount to $798.
What is the cost of utilities in retirement?
The fifth-largest cost of average retirement spending per year is utilities.
This category includes gas, electricity, water, phone, and Internet charges.
Retiree households spend an average of $3,810 annually versus $4,055 usual households spend.
What is the cost of food in retirement?
Senior spending statistics show that older households spend an average of $7,306 per year on food. This includes the food they eat at home ($4,797) and eating out ($2,509).
This figure is lower than the average of $9,343 in total food spending by all households overall, which included $5,703 for food at home and $3,639 for food away from home.
A survey revealed that 26% of respondents 55 and older regularly get senior discounts at stores, restaurants, and other businesses. 22% have done so many times. 21% said they had gotten a senior discount at least once in the past. 31% have never gotten a discount.
McDonald’s, Denny’s, and Golden Corral were the top brands mentioned for senior discounts. Those discounts can certainly have a big impact on buying behaviors. 65% said that they are more likely to patronize businesses that offer senior discounts for which they qualify.
How do you manage debt in retirement?
Besides a mortgage, many retirees will find they still carry debt into retirement, such as auto loans.
Credit card debt is the most common form of debt, with over 40% of adults 65 and over reporting credit card debt, 30% a mortgage, 23% a car loan, 11% medical debt, and 4% student loan debt.
43% of retirees described their debt as “manageable” in 2022, 46% of retirees described their debt as “easily manageable” in 2022, and 11% of retirees reported their debt was “unmanageable” or “crushing.”
How much do you need to retire in each state?
The average retirement spending per year fluctuates from state to state.
The following breakdown explains the cost of living for retirees by state, including an additional cash buffer of 20% of that total, which was added to ensure that retirees would be “comfortable,” according to the GoBankingRates study.:
Alabama
- Total expenditures: $50,980
- 20% comfort buffer: $10,196
- Cost of a comfortable retirement annually: $61,176
Alaska
- Total expenditures: $72,390
- 20% comfort buffer: $14,478
- Cost of a comfortable retirement annually: $86,868
Arizona
- Total expenditures: $63,942
- 20% comfort buffer: $12,788
- Cost of a comfortable retirement annually: $76,730
Arkansas
- Total expenditures: $51,211
- 20% comfort buffer: $10,242
- Cost of a comfortable retirement annually: $61,454
California
- Total expenditures: $83,906
- 20% comfort buffer: $16,781
- Cost of a comfortable retirement annually: $100,687
Colorado
- Total expenditures: $58,908
- 20% comfort buffer: $11,782
- Cost of a comfortable retirement annually: $70,689
Connecticut
- Total expenditures: $65,504
- 20% comfort buffer: $13,101
- Cost of a comfortable retirement annually: $78,605
Delaware
- Total expenditures: $58,387
- 20% comfort buffer: $11,677
- Cost of a comfortable retirement annually: $70,064
District of Columbia
- Total expenditures: $79,984
- 20% comfort buffer: $19,996
- Cost of a comfortable retirement annually: $99,980
Florida
- Total expenditures: $59,660
- 20% comfort buffer: $11,932
- Cost of a comfortable retirement annually: $71,592
Georgia
- Total expenditures: $52,832
- 20% comfort buffer:$10,566
- Cost of a comfortable retirement annually: $63,398
Hawaii
- Total expenditures: $107,746
- 20% comfort buffer: $21,549
- Cost of a comfortable retirement annually: $129,296
Idaho
- Total expenditures: $58,503
- 20% comfort buffer: $11,701
- Cost of a comfortable retirement annually: $70,203
Illinois
- Total expenditures: $53,989
- 20% comfort buffer: $10,798
- Cost of a comfortable retirement annually: $64,787
Indiana
- Total expenditures: $52,253
- 20% comfort buffer: $10,451
- Cost of a comfortable retirement annually: $62,704
Iowa
- Total expenditures: $52,137
- 20% comfort buffer: $10,427
- Cost of a comfortable retirement annually: $62,565
Kansas
- Total expenditures: $50,517
- 20% comfort buffer: $10,103
- Cost of a comfortable retirement annually: $60,620
Kentucky
- Total expenditures: $53,584
- 20% comfort buffer: $10,717
- Cost of a comfortable retirement annually: $64,301
Louisiana
- Total expenditures: $53,295
- 20% comfort buffer: $10,659
- Cost of a comfortable retirement annually: $63,954
Maine
- Total expenditures: $64,405
- 20% comfort buffer: $12,881
- Cost of a comfortable retirement annually: $77,286
Maryland
- Total expenditures: $67,240
- 20% comfort buffer: $13,448
- Cost of a comfortable retirement annually: $80,688
Massachusetts
- Total expenditures: $83,501
- 20% comfort buffer: $16,700
- Cost of a comfortable retirement annually: $100,201
Michigan
- Total expenditures: $53,121
- 20% comfort buffer: $10,624
- Cost of a comfortable retirement annually: $63,745
Minnesota
- Total expenditures: $54,857
- 20% comfort buffer: $10,971
- Cost of a comfortable retirement annually: $65,828
Mississippi
- Total expenditures: $51,096
- 20% comfort buffer: $10,219
- Cost of a comfortable retirement annually: $61,315
Missouri
- Total expenditures: $51,211
- 20% comfort buffer: $10,242
- Cost of a comfortable retirement annually: $61,454
Montana
- Total expenditures: $54,741
- 20% comfort buffer: $10,948
- Cost of a comfortable retirement annually: $65,689
Nebraska
- Total expenditures: $54,047
- 20% comfort buffer: $10,809
- Cost of a comfortable retirement annually: $64,856
Nevada
- Total expenditures: $59,428
- Cost of a comfortable retirement annually: $71,314
New Hampshire
- Total expenditures: $65,736
- 20% comfort buffer: $13,147
- Cost of a comfortable retirement annually: $78,883
New Jersey
- Total expenditures: $65,794
- 20% comfort buffer: $13,159
- Cost of a comfortable retirement annually: $78,952
New Mexico
- Total expenditures: $54,163
- 20% comfort buffer: $10,833
- Cost of a comfortable retirement annually: $64,995
New York
- Total expenditures: $71,233
- 20% comfort buffer: $17,689
- Cost of a comfortable retirement annually: $85,480
North Carolina
- Total expenditures: $56,998
- 20% comfort buffer: $11,400
- Cost of a comfortable retirement annually: $68,398
North Dakota
- Total expenditures: $53,700
- 20% comfort buffer: $10,740
- Cost of a comfortable retirement annually: $64,440
Ohio
- Total expenditures: $54,394
- 20% comfort buffer: $10,879
- Cost of a comfortable retirement annually: $65,273
Oklahoma
- Total expenditures: $49,996
- 20% comfort buffer: $9,999
- Cost of a comfortable retirement annually: $59,995
Oregon
- Total expenditures: $66,025
- 20% comfort buffer: $13,205
- Cost of a comfortable retirement annually: $79,230
Pennsylvania
- Total expenditures: $55,320
- 20% comfort buffer: $11,064
- Cost of a comfortable retirement annually: $66,384
Rhode Island
- Total expenditures: $65,620
- 20% comfort buffer: $13,124
- Cost of a comfortable retirement annually: $78,744
South Carolina
- Total expenditures: $56,477
- 20% comfort buffer: $11,295
- Cost of a comfortable retirement annually: $67,773
South Dakota
- Total expenditures: $54,047
- 20% comfort buffer: $10,809
- Cost of a comfortable retirement annually: $64,856
Tennessee
- Total expenditures: $52,253
- 20% comfort buffer: $10,451
- Cost of a comfortable retirement annually: $62,704
Texas
- Total expenditures: $53,468
- 20% comfort buffer: $10,694
- Cost of a comfortable retirement annually: $64,162
Utah
- Total expenditures: $59,544
- 20% comfort buffer: $11,909
- Cost of a comfortable retirement annually: $71,453
Vermont
- Total expenditures: $66,372
- 20% comfort buffer: $13,274
- Cost of a comfortable retirement annually: $79,647
Virginia
- Total expenditures: $58,618
- 20% comfort buffer: $11,724
- Cost of a comfortable retirement annually: $70,342
Washington
- Total expenditures: $66,604
- 20% comfort buffer: $13,321
- Cost of a comfortable retirement annually: $79,925
West Virginia
- Total expenditures: $48,492
- 20% comfort buffer: $9,698
- Cost of a comfortable retirement annually: $58,190
Wisconsin
- Total expenditures: $56,130
- 20% comfort buffer: $11,226
- Cost of a comfortable retirement annually: $67,356
Wyoming
- Total expenditures: $55,031
- 20% comfort buffer: $11,006
- Cost of a comfortable retirement annually: $66,037
How can you budget for retirement?
One in four Americans has nothing saved for retirement.
According to experts, individuals often go through four designated retirement phases. Within each phase, changing income and expenses require different budgeting approaches.
A four-phase retirement model consists of pre-retirement (age 50 to 62 or so), the early period of retirement (age 62 to 70), middle retirement (age 70 to 80), and late retirement (age 80 and up).
Common considerations for budgeting for seniors include housing, healthcare, entertainment, taxes, debt, travel and hobbies, home modifications, family support, and inflation.
Some expenses change in retirement. While transportation and housing costs often drop, healthcare and entertainment may go up.
To cover the cost of retirement at each stage, creating a retirement budget plan based on the four key phases is advisable. This entails adding up all income streams, carefully planning the distribution of funds, planning for healthcare expenses, and creating a zero-based monthly budget by totaling monthly income and deducting your expenses so that no funds are left over.
Doing so will help you to budget for and manage your average retirement spending over time.
Get expert financial advice
Senior spending statistics can give you key insights into average retirement budgets and how to spend money in retirement wisely.
To learn more about retirement economics and prepare for the financial side of life after the workforce, it’s best to get expert financial advice.
Unbiased can match you with an SEC-regulated financial advisor who will offer professional guidance and support.
Fact checked on 11/04/2026