Household spending follows a clear arc over a lifetime. It climbs through the 30s and 40s as families grow, peaks in the late 40s and early 50s, and then falls steadily as children leave home, mortgages are paid down and work costs disappear.
Knowing where you sit on that arc helps with two things: judging whether your own spending is typical, and estimating what you will need once you retire. This guide uses the latest Bureau of Labor Statistics Consumer Expenditure Survey data, for 2024, to show what households spend at each stage from 45 to 75 and older.
Average spending by age at a glance
| Age of head of household | Yearly spending | Monthly spending |
| 35 to 44 | $91,229 | $7,602 |
| 45 to 54 | $100,327 | $8,361 |
| 55 to 64 | $84,946 | $7,079 |
| 65 to 74 | $65,354 | $5,446 |
| 75 and older | $55,834 | $4,653 |
| All households | $78,535 | $6,545 |
Source: BLS Consumer Expenditure Surveys, 2024 (via FRED and the BLS annual release).
Spending peaks between 45 and 54 at more than $100,000 a year. By 65 to 74, it has fallen by about a third. By 75 and older, households spend a little over half of what they did at their peak.
Where the money goes at each age
| Monthly spending | 45 to 54 | 55 to 64 | 65 to 74 | 75 and older |
| Housing (including utilities) | $2,562 | $2,252 | $1,861 | $1,833 |
| Transportation | $1,432 | $1,257 | $951 | $571 |
| Food | $1,064 | $851 | $707 | $597 |
| Health care | $562 | $559 | $643 | $660 |
| Everything else | $2,740 | $2,160 | $1,284 | $991 |
| Total | $8,361 | $7,079 | $5,446 | $4,653 |
“Everything else” includes clothing, entertainment, personal care, education, gifts, charity, life insurance and retirement and Social Security contributions.
How spending changes, category by category
Housing: the biggest bill at every age
Housing costs fall only modestly with age, from about $2,560 a month at 45 to 54 to about $1,830 at 75 and older. As other spending drops, housing takes a larger share of the budget: about 31% at 45 to 54, rising to about 39% at 75 and older.
Paying off a mortgage lowers the cost, but property taxes, insurance, utilities and repairs remain. That is why housing decisions, such as downsizing, moving to a cheaper area or paying off the mortgage before retiring, have the largest effect on a retirement budget.
Transportation: the biggest drop
Transportation spending falls by more than half between 45 to 54 and 75 and older. Fewer commutes, fewer cars in the household and less frequent car purchases all play a part. Car insurance tends to rise again after about 70, but overall transport costs keep falling.
Food: down, but not as much as you might think
Food spending falls from about $1,060 a month to about $600 as households shrink. Eating out declines more than grocery spending. Households 65 to 74 still spend about $237 a month on food away from home.
Health care: the only major category that rises
Health spending is roughly flat through the 50s and early 60s, then rises after Medicare begins and keeps climbing. As a share of the budget, it roughly doubles, from about 7% at 45 to 54 to about 14% at 75 and older. This does not include long-term care, which can be much larger.
Everything else: where retirees cut the most
The “everything else” group falls by nearly two-thirds from peak to 75 and older. Much of that is the end of retirement and Social Security contributions, work clothing and education costs for children. Entertainment and travel also decline in later retirement.
What this means if you are in your 40s or 50s
You are probably at peak spending right now. Children, mortgages, cars and saving for retirement all compete for the same paycheck. Do not use today’s spending as your retirement estimate without adjusting it.
Your retirement budget will likely be 20% to 35% lower than your current one. The drop from 45 to 54 to 65 to 74 in the BLS data is about 35%. Many planners suggest aiming for 70% to 80% of your pre-retirement income, which fits that pattern.
Some costs will not fall. Housing costs drop only slightly unless you pay off the mortgage or move. Health care will rise. Plan specifically for both.
Paying off the mortgage is one of the most powerful moves. Retirees without a mortgage often need hundreds or thousands of dollars less each month.
What this means if you are 65 or older
Early retirement is often the most expensive part. Households 65 to 74 spend about $790 a month more than those 75 and older, largely because of travel, cars and entertainment in the first active years.
Plan for a shift, not just a decline. Transport and entertainment fall, but health care rises. A budget that works at 67 may need rearranging at 80.
Keep a buffer for irregular costs. Averages smooth out big expenses like a new roof, a car or dental work. Setting aside a fixed amount each month for these makes them much easier to handle.
One household over 30 years: an illustration
To make the pattern concrete, picture a married couple following the averages.
At 50, they spend about $8,400 a month. The mortgage still has years to run, one child is in college, both commute, and they are putting money into 401(k)s. Transportation alone is over $1,400 a month.
At 67, both are retired. The children are independent and the commutes are gone, and they no longer pay into Social Security or retirement plans. Spending falls to about $5,400 a month. They travel more than they used to, but they have sold one of their two cars. Health care, now including Medicare premiums for both, has risen to about $640 a month.
At 80, spending is about $4,650 a month. They rarely buy cars and travel less, but health care is higher still, and housing now makes up almost 40% of the budget. If one of them needs help at home, the picture changes quickly, because even 20 hours a week of home care can cost around $3,000 a month.
Their story will not match yours exactly, but the direction almost certainly will.
How to compare your own spending
- Add up 12 months of spending from bank and card statements. Include annual bills like insurance and property taxes.
- Sort it into the five categories above.
- Compare each category with the average for your age. A big gap is not necessarily a problem, but it is worth understanding.
- Check the housing share. If it is well above 35% before retirement, look at how you will reduce it by the time you stop working.
- Project forward. Use the pattern in the table to estimate how each category might change over the next 10 to 20 years.
A note on what averages hide
These figures are averages for all households in each age group, including singles and couples, renters and owners, and high and low earners. A single retiree who owns a paid-off home will spend far less than the average. A couple still paying a mortgage in an expensive state will spend far more. Use the averages as a reference point, then build from your own numbers.
Frequently asked questions
At what age do people spend the most money? Households headed by someone 45 to 54 spend the most, about $100,327 a year or $8,361 a month in 2024.
How much does the average person over 65 spend per month? Households headed by someone 65 or older spent about $5,119 a month in 2024. Those 65 to 74 spent about $5,446, and those 75 and older about $4,653.
Does spending really go down in retirement? Yes, on average. BLS data shows households 65 to 74 spend about 35% less than those 45 to 54, and spending keeps falling after 75. Health care is the main exception.
How much of a retiree’s budget goes to housing? About 34% for households 65 to 74 and about 39% for those 75 and older.
Sources
- U.S. Bureau of Labor Statistics, Consumer Expenditure Surveys 2024, total expenditures and major categories by age of reference person (via FRED)
- U.S. Bureau of Labor Statistics, Consumer Expenditures news release, December 19, 2025
Figures are national averages. Your spending will differ. This article is general information, not financial advice.
