How Retirement Spending Changes With Time

New retirees sometimes worry that they’re spending too much, too soon. Should they scale back? Are they at risk of outliving their money?

This concern can be legitimate. Some households “live it up” early on, spending more than they anticipated as retirement unfolds. But 10 or 20 years later, that same household may spend far less than it once did. Understanding typical retirement spending patterns can help you plan with more confidence.

Retirement Spending by Age: The Numbers

The initial stage of retirement tends to be the most expensive. According to the Bureau of Labor Statistics:

• Households headed by pre-retirees (age 55–64) spend an average of $84,946 per year.
• That figure drops to $61,432 per year for households headed by people age 65 and older.
• By age 75 and older, average annual spending declines further to $55,834 per year.

Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey (2024 data, most recent available)

This pattern reflects a broader trend: retirement spending habits shift meaningfully as households move from the early, active years of retirement into their later years.

What Does the Retirement Spending Pattern Look Like?

Some suggest that retirement spending is best represented by a U-shaped curve: spending rises during the active early years, falls in the middle years, then climbs again later in life due to rising medical expenses.

However, research has found a somewhat different pattern. A widely cited study from investment firm BlackRock found that retiree spending tends to decline only slightly over time, rather than following a dramatic U-shape. The same research found that significant medical expense spikes were concentrated among a relatively small percentage of retirees, typically in the final two years of life — not a broad trend affecting most retirees.

Key Takeaways on Retirement Spending Trends

• Spending is generally highest in the early years of retirement, when new retirees have time and energy for travel and other pursuits.
• Spending tends to decline gradually as retirees move into their 70s and beyond.
• For most retirees, spending doesn’t spike dramatically due to healthcare costs — that pattern applies mainly in the final years of life for a smaller subset of retirees.
• Individual retirement spending strategy will vary based on personal health, lifestyle, and financial circumstances.