Retirement spending in the United States averaged $61,432 a year, or roughly $5,120 a month, among people 65 and older in 2024, according to the latest federal data. That figure offers a useful benchmark for anyone trying to gauge how much income or savings they will actually need once regular paychecks stop.
Where the Money Actually Goes
Housing swallows the biggest slice of a retiree's budget by a wide margin. The average older household spent $22,193 a year on housing, about 36% of total spending, or $1,849 a month. That includes $12,995 for rent, mortgage payments, property taxes and maintenance, plus $4,480 for utilities and fuel and $4,718 for furnishings, housekeeping and other household needs.
Transportation ranks second, ahead of food, at $9,538 a year, roughly $795 a month and about 15.5% of the budget. That number covers car purchases, gas, repairs, insurance and any public transit fares. Food comes next at $7,940 annually, or $662 a month, which is 12.9% of spending. That total blends groceries and restaurant meals, along with a modest $44.33 a month that older adults put toward alcoholic beverages.
Healthcare's Growing Bite Out of Retirement Budgets
$7,799 is what the average person 65 or older spent on healthcare in 2024, equal to 12.7% of annual spending and about $650 a month. Health insurance premiums account for most of that, at $5,107 a year, followed by $1,449 for medical services, $898 for prescription and over the counter drugs, and $344 for medical supplies.
Older adults tend to pay more for healthcare than younger people simply because they use more of it and often face steeper insurance premiums. The annual figures only tell part of the story. A separate 2025 analysis from Fidelity estimated that a typical 65 year old will spend $172,500 on healthcare across the full span of retirement, a reminder that yearly averages can understate the lifetime cost of aging.
Comparing the Major Spending Categories
| Category | Annual Spending | Monthly Spending | Share of Budget |
|---|---|---|---|
| Housing | $22,193 | $1,849 | 36% |
| Transportation | $9,538 | $795 | 15.5% |
| Food | $7,940 | $662 | 12.9% |
| Healthcare | $7,799 | $650 | 12.7% |
| Entertainment | $3,025 | $252 | 4.9% |
| Cash contributions | $3,158 | $263 | 5.1% |
| Personal insurance/pensions | $3,480 | $290 | 5.7% |
Beyond the four largest categories, retirees put another $13,962 a year toward everything else. Entertainment, which covers movies, pet care, camping gear, exercise equipment and sporting events, ran $3,025 a year, or about $252 a month. Cash contributions, including alimony, child support, help for adult children away at school and charitable giving, totaled $3,158 annually. Personal insurance and pension related costs, such as life insurance premiums but not auto, health or home coverage, came to $3,480 a year.
Does This Actually Reflect Retirement Spending?
Not every person aged 65 and older has actually retired, and the average retirement age for both men and women falls below 65. That gap matters. Some spending patterns in this data may reflect people still drawing a paycheck rather than living purely off savings, Social Security and pensions. Even so, the categories themselves, housing, transportation, food and healthcare, are unlikely to shift dramatically once someone does stop working, which makes this snapshot a reasonable starting point for building a retirement budget rather than an exact prediction of what any individual household will spend.