How Retirement Spending Changes With Time

New retirees sometimes worry that they’re spending too much, too early. Should they scale back? Are they at risk of outliving their money? These concerns are completely normal. Many households front-load their spending during the first years of retirement—traveling more, completing long-delayed projects, or simply enjoying more free time. But research shows that spending often shifts (and sometimes drops) as retirement progresses.

understanding early retirement spending

The initial stage of retirement can be expensive. Recent data show that households headed by someone age 55–64 spend about $75,600 per year on average. That amount drops to around $63,400 for households headed by someone age 65–74, and to about $53,300 for those 75 and older.¹ More recent research also finds that retirees age 65+ spend roughly 26% less per year than those age 55–64, and that households age 75+ spend nearly 19% less than those age 65–74.

patterns of spending after retirement

Some suggest that retirement spending follows a U-shaped curve — it rises early on, then falls, then increases sharply later in life (often due to medical and long-term care costs).

However, according to BlackRock’s research, retiree spending actually tends to decline slightly over time rather than spiking. Their findings also note that large medical expense spikes are seen only by a small percentage of retirees, typically in the last 1-2 years of life.

What’s the best course for you? Your spending pattern will depend on your personal choices as you enter retirement. A carefully designed strategy can help you stay prepared and enjoy your retirement years.

WONDERING IF YOUR RETIREMENT SPENDING IS ON TRACK?

If you’re unsure how your spending today could shift over time, a Skyla Financial Advisor can help you plan with confidence and flexibility. Reach us at 704.375.0183 x 3085 to talk through your strategy and feel prepared for every stage of retirement.