The Bureau of Labor Statistics’ most recent Consumer Expenditure Survey provided many insights into the spending habits of Americans. The data collected by the BLS was also broken down by age group and delivers some interesting insights into the spending habits of older Americans.
Older Households Not Saving
Older households, those 65 years old or older, are spending more money every year than they’re bringing in. The average annual income after taxes for older households is $42,959 per year, but they spend $44,664 per year. Perhaps that’s not surprising, as most retirees intend to live off of and gradually draw down their retirement funds over the course of their retirement. All the more reason to save as much as you can before you retire.
Housing Is the Biggest Expense
Housing costs were the biggest expense, taking up nearly 35% of the annual budget, or over $15,000 per year. It’s important to remember that even though you may have paid off your mortgage, you’re still liable for property taxes, utilities, and homeowners’ insurance. Those costs add up, will likely increase every year, and will take a bigger and bigger chunk out of your retirement income as you age.
Transportation expenses were the second biggest category of spending, at almost $7,000 per year. Over a third of this was due to car purchases, another third to various expenses such as insurance and vehicle repairs, with gas costs averaging almost $1,450 per year.
Healthcare Costs Rising
Health care costs were the next biggest expense, at $5,756 per year. That was a larger outlay than every younger age group, both as an absolute figure and as a percentage of income. That only makes sense, as advancing age results in more and more health problems, with a corresponding increase in spending. Those costs continue to rise for older cohorts, with households 75 and over spending more per year than households in the 65-74 age range. And health care costs will only continue to rise in the future.
The cost of food is lower for older households than just about all the younger households. That stands to reason, what with children moved out of the house and living on their own. Still, it makes up over 12% of annual expenditures, coming in right behind health care costs.
Once you have an idea of how much you’ll be spending in retirement and what you’ll be spending it on, you have a better idea of how much money you’ll need to save in order to live comfortably. You’ll also want to think about how best to protect your assets to make sure that they stay safe over the course of your retirement. Gold and silver have been trusted investment assets for centuries. They maintain their purchasing power over time as no other asset can do, and they act as a safe haven in times of crisis. With the development of gold IRAs, it’s easier than ever to invest in gold while maintaining the tax advantages of conventional IRAs, ensuring that you’ll have plenty of money to live your golden years comfortably and securely.