How much money will I spend in retirement?

1 min read by Rachel Carey Last updated December 22, 2023

From your day-to-day expenses to making big purchases, this article takes you through everything you need to know about how to spend in retirement.


  • Your spending patterns change as you age and leave the working world behind. 

  • It’s important to be prepared for how your expenses will change.   

  • When you reach a certain age, ranging from 50 to 65, you can start taking advantage of several senior discounts. 

  • A financial advisor can help you create a retirement plan that takes your income and expenses into account.  

How to be a savvy spender in retirement  

As with most things in retirement, it all comes back to having a plan - and a budget.   

When you enter retirement, you should know how much money you’re taking with you. From here, you can plan how much you will set aside each year.   

After you’ve mapped this out, it’s time to turn your attention to your expenses.   

What will my expenses be in retirement? 

Your spending patterns change as you age and leave the working world behind. Work-related expenses go down, but health-related expenses go up.  

Your utility bills may also increase as you now make that morning coffee at home rather than the communal kitchen, or you’re bumping up your heating instead of the one in the office.   

Small things add up, and it’s important to be prepared for how your expenses will change.   

Based on data from the Employee Benefit Research Institute, the chart below offers an idea of how retirees’ spending patterns change over time:  

ExpensesAges 50-64Ages 65-74Ages 75+
Housing 45.90% 44.90% 45.60%
Food 11% 11.20% 11.20%
Health 7.80% 9.60% 10.60%
Clothing 2.90% 2.90% 2.70%
Transport 13.90% 12% 9.70%
Entertainment 10.20% 10.50% 8.30%
Other 4.70% 5.40% 6.30%

As detailed by J.P. Morgan, your retirement spending remains similar to how you spent pre-retirement. 

Between the ages of 65 and 75, your spending is 100% of your pre-retirement expenditure. Between the ages of 75 and 85, this drops to between 80% and 70%.   

Your money also stops being replenished. Once you spend money, it’s gone. It will not be replaced, which can be a shock to the system.   

One way to reduce this shock is to spend some time living on your retirement budget while you still have some money coming in. 

In the six months before retirement, spend how you plan to in retirement or even more frugally. Use 50% or 70% of your wages to live off and put the remainder into an emergency fund or your retirement savings.   

While it is only six months, it will help you identify gaps and show you where you need to improve.   

Running out of money in retirement is a huge concern for retirees across America, so it pays to monitor your expenses and create a budget you will stick to.   

How can I make the most of retirement benefits? 

When you reach a certain age, ranging from 50 to 65, you can start taking advantage of several senior discounts. 

 From transport and leisure activities to grocery and restaurant deals, these discounts can help you maintain your budget and enjoy the benefits of being older. 

Some perks include:  

  • Amtrak travelers 65 years and over can get a 10% discount on most rail fares on most Amtrak trains.  

  • Passengers 65 and older can avail of American Airlines discounts.  

  • You can enjoy 15% off your check or dine from the 55+ menu at Denny’s.  

  • AMC Theatres offers discounted movie tickets at select locations.   

  • AT&T has senior plans aimed at reducing cell phone plans for retirees.   

How do I make big purchases in retirement? 

Milestone purchases don’t end just because you retire. The world keeps turning, and unfortunately, it’s an expensive world we live in.   

Your child’s wedding, graduation, or your grandchildren's birth can be exciting but expensive events. 

 Living out your dream retirement also doesn’t come cheap. 

That European holiday or the new car to get you from A to B comes at a cost. With your retirement savings not being regularly replenished, you need to be savvy when making big purchases.   

This is where your financial plan kicks in.   

As mentioned earlier, you should have mapped out your retirement budget ahead of retirement – how much you will live on each year and where you will spend your money. 

Alongside the usual utility bills, grocery costs, and other day-to-day expenses, you also need to factor in big spending.   

For example, if you plan on taking a long trip once you retire, set aside the money for it. 

Once you do that, how are the rest of your finances shaping up? Have you left yourself short elsewhere? Or can your savings withstand a sizeable dent?   

While it’s important to enjoy your retirement and make the most of it, you still need to be sensible about what you can and cannot afford.    

Keeping an emergency fund covering three to six months of expenses is also wise. 

Financial emergencies can come in many forms – an unexpected healthcare emergency can leave you with a high hospital bill, perhaps.   

As much as possible, it’s important to plan ahead for the times when life decides to take a considerable bite out of your savings. 

This will not only lessen the impact but also ensure you still have money left to live out the rest of your retirement.   

What happens if my savings run out?  

Unfortunately, we can’t plan for every eventuality.   

According to the Center for Retirement Research at Boston College, half of US households are at risk of not having enough income to maintain their standard of living in retirement.   

Inflation also plays a huge role here. 

According to the Unbiased Financial Confidence Survey, inflation and its impact are the top concerns for Americans when planning for retirement, with 59% listing it as their highest concern.  

Inflation can decimate your savings, throwing budgets out the window. With higher prices across the board, the amount you earmarked to last you for one year may only now last for nine months.    

Longevity is also a factor. No one knows how long they will live, meaning planning how you will spend and save during retirement can be tricky, especially when considering increasing life expectancy.    

So, what do you do if you no longer have enough savings to sustain yourself?  

Retirees have several options they can turn to if they find their finances getting low:  

  • Part-time work can provide necessary additional income for retirees. In fact, according to the Employee Benefit Research Institute (EBRI), 63.8% of people work in retirement to have income for essential expenses.   

  • Retirees can seek financial assistance from government programs should they require it.   

  • A reverse mortgage provides you with access to equity in your home. However, they often come with high fees and interest rates, so it’s worth doing your homework before going down this route.   

  • Relying solely on Social Security in retirement is rarely advised, as your monthly check will not replace all of your income. However, if you dramatically cut costs, you could make it work.  

Speak to a financial professional 

Spending money in retirement is a delicate balancing act.   

On the one hand, you want to enjoy retirement, spend time with your grandkids, go out and see the world, and tick things off your bucket list. 

On the other hand, you want to make sure you have enough money to last for your entire retirement.   

Where do you draw the line between being overly frugal and too much of a big spender?  

For some advice on how to manage your finances and get ready for retirement, an experienced financial advisor is well-placed to assist. 

Matching with a financial advisor perfectly suited to meet your needs is just a few clicks away with Unbiased. Answer a few questions, and we will connect you with a financial advisor perfectly suited to meet your needs. 

Get started here.

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.