How Much Did People in Their 60s Spend Living in Retirement in 2025?

Core Insights - Americans believe they need an average of $1.26 million for a comfortable retirement, while actual spending for retirees aged 65 and older is approximately $61,400 annually [1][2] Spending Patterns - The average retiree household spends about $60,000 per year, with housing accounting for 36%, transportation for 15%, healthcare for 13%, and food for 13% of the budget [5] - Housing dominates retirement budgets, making up about one-third of total spending for households headed by someone aged 65 and older [4] - Spending typically declines by about 26% between the ages of 65 and 84, although long-term care costs remain a significant concern not captured in standard spending data [5][7] Retirement Spending Phases - Financial planner Michael Stein describes retirement spending as evolving through "go-go," "slow-go," and "no-go" years, with increased spending in the 60s for travel and leisure, followed by a decline in spending as mobility decreases [6] - Research indicates that real (inflation-adjusted) spending declines annually starting in early retirement, totaling a decline of approximately 26% from ages 65 to 84 [7] Long-Term Care Costs - Long-term care presents a critical financial risk, with 70% of individuals turning 65 expected to require some form of long-term care, and 20% needing it for over five years [8] - As of 2024, the cost of a private room in a nursing home is $10,646 per month, reflecting a 9% increase from 2023, while assisted living averages $5,900 per month, a 10% rise from the previous year [8]