The Average Retiree Spends Over $52,000 a Year – And 75% Of That Goes To Just five

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Ever wondered what life looks like financially once you’ve bid farewell to the 9-to-5 grind? Well, you might be in for a surprise. It turns out that retirees aren’t exactly pinching pennies as much as you’d think. Their annual spending is eyebrow-raisingly close to what the average worker brings home.

The magic number? $52,141. That’s right, the average retiree is shelling out just over $52K per year or about $4,345 per month. To put this into perspective, at the end of 2023, the average salary was $59,384, according to the Bureau of Labor Statistics.

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For many retirees, their spending is actually about 80% of what they were spending before retirement. It’s as if they’ve given themselves a 20% “lifestyle adjustment” – trimmed a bit but not drastically altering their standard of living.

So where is all this money going? Let’s examine the breakdown:

Housing: The largest portion, around 36% – about $18,872 annually – goes to keeping a roof over their heads. This isn’t surprising, as housing remains a significant expense throughout life.

Health care: As we age, medical expenses tend to increase. Health care is becoming an increasingly important line item in retirees’ budgets. Retirees spend a reported $7,030 a year on health care.

Food: Approximately 12.4% of monthly spending, or $6,490, goes toward food. Whether preparing meals at home or dining out, retirees don’t compromise on their culinary experiences.

Entertainment: Around 5% or $2,672 is dedicated to leisure activities. This suggests that retirement isn’t solely about economizing but also about enjoying life.

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Transportation: These costs significantly decrease in retirement. Before 65, people spend about $13,865 annually on transportation. After 65? That figure drops to $8,172. The absence of a daily commute makes a difference.

Here’s an interesting fact: many retirees are spending less than anticipated. 48% report spending under $2,000 monthly. This could be seen as a positive financial surprise for many.

Many retirees still have significant assets left even after nearly two decades of retirement. Some are even growing their nest eggs. According to a study by the Employee Benefit Research Institute (EBRI), more than one-third of retirees grew their assets over 18 years of retirement.

Retirement spending isn’t insignificant, but it’s not exorbitant either. It balances necessary expenses, enjoyable indulgences, and smart savings so the golden years can be golden.

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This article The Average Retiree Spends Over $52,000 a Year – And 75% Of That Goes To Just five Expenses. How Does Your Budget Stack Up? originally appeared on Benzinga.com