Core Insights - Individuals aged 65 and older in the U.S. averaged total annual spending of $60,087 in 2023, which translates to just over $5,000 per month [3][5] - The largest spending categories for this demographic include housing, food, transportation, and healthcare, with significant allocations also made for entertainment [3][5] Spending Breakdown - **Housing Costs**: The largest share of annual expenses is allocated to housing, totaling $21,445 per year, which is about 36% of annual spending. Monthly housing costs average $1,787 [6][7] - **Transportation Costs**: Transportation is the next largest category, costing $9,033 per year, or approximately 15% of the annual budget. Monthly transportation expenses average $752.75 [7][5] - **Food Costs**: Individuals aged 65 and older spent an average of $7,714 per year on food, which is approximately 12.8% of their annual spending. Monthly food costs average $642.84 [8][5] - **Healthcare Costs**: Healthcare spending for this age group averaged $8,027 in 2023, accounting for about 13.4% of their annual spending [9] - **Entertainment Expenses**: On average, individuals spent $241.50 per month on entertainment, which includes activities such as shows, sporting events, and club memberships [5]

Core Insights - Fidelity estimates that a 65-year-old retiring in 2025 will need $172,500 for healthcare alone throughout retirement, excluding long-term care [1] - On average, Americans believe they need $1.26 million to retire comfortably, according to Northwestern Mutual's 2025 Planning & Progress Study [2] - The average household headed by someone aged 65 or older spent just over $60,000 in 2023, indicating that the average retirement savings estimate is $240,000 short of the actual amount needed for a sustainable lifestyle [3] Spending Patterns - Retirees typically spend about 55% to 80% of their preretirement income once they leave the workforce [4] - Housing dominates retirement budgets, accounting for about one-third of total spending for households headed by someone aged 65 and older, followed by transportation (15%), healthcare (13%), and food (13%) [5] - The average retiree household spends about $60,000 annually, with housing (36%), transportation (15%), healthcare (13%), and food (13%) taking the largest shares of the budget [6] Spending Evolution - Inflation-adjusted spending typically declines by about 26% between the ages of 65 and 84, although long-term care costs remain a significant variable not captured by standard spending data [6] - 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 energy and mobility decrease [7] - Research indicates that real (inflation-adjusted) spending declines approximately 26% between the ages of 65 and 84 [8]

Core Insights - The 4% rule has been a longstanding guideline for determining retirement spending [1] Summary by Categories - **Retirement Spending Guidelines** - The 4% rule serves as a foundational method for understanding retirement expenditure [1]