What is the average retirement spending per month?

BLS 2023 averages work out to roughly $5,430 a month for consumer units led by someone age 65–74 and roughly $4,420 for those led by someone 75 or older. They are descriptive group averages, not a recommended budget, and they include households with very different sizes, incomes, housing, and health needs.

Do retirees spend less every year?

Many do in inflation-adjusted terms, but not in a straight line and not universally. Blanchett's research found an average decline and a spending-smile pattern; an individual plan should still model travel, housing changes, healthcare, and irregular costs explicitly.

Should a retirement budget use 70% or 80% of working income?

Income-replacement percentages are a rough starting point. A bottom-up budget is more informative because retirement removes some costs, changes others, and can introduce healthcare, travel, tax, or support expenses that salary-based rules miss.

What is the difference between a budget and a spending guardrail?

A budget describes planned expenses. A guardrail is a modeled range used to test whether that spending remains resilient as markets, inflation, taxes, and the plan change; it supports review and adjustment rather than promising a fixed safe amount forever.

What do retirees actually spend? A retirement budget grounded in real data

By the RetireGlide Team · August 15, 2026

Retirees do not spend one universal percentage of their former income: a useful retirement budget starts with your own fixed, flexible, and irregular costs. In 2023 BLS data, consumer units led by someone age 65–74 spent $65,149 on average, while those led by someone 75 or older spent $53,031 — but those averages describe groups, not what any one household needs.

The better planning question is not whether your budget matches the average. It is how your essential and optional spending could change across the early, middle, and later years of retirement.

What does the BLS data say retirees spend?

The Bureau of Labor Statistics Consumer Expenditure Survey groups households by the age of the reference person. In its 2023 table, average annual expenditures were $65,149 for ages 65–74 and $53,031 for ages 75 and older. Housing remained the largest category in both groups, while healthcare took a larger share for the older group.

Those are household averages, not a target and not a forecast. The groups differ in household size, housing tenure, location, health, and income, and an average can be pulled upward by high-spending households. Use the survey to identify categories you might have missed, then build the plan from your own costs.

Why does retirement spending often follow a smile?

David Blanchett's analysis of government spending data found that inflation-adjusted retirement spending tended to decline by roughly 1% a year on average, rather than rising in lockstep with inflation. He called the curved pattern a retirement spending smile: spending often falls through much of retirement, with a different pattern at advanced ages as healthcare and support needs take a larger role.

That finding does not mean every household can assume steady cuts. Travel may make early retirement expensive, a mortgage may end in the middle years, and health or care costs may rise later. A phased budget can represent those changes without treating a population average as a promise.

What belongs in a retirement budget?

A practical budget separates costs by how they behave. That makes it easier to see which parts of life need a dependable income floor and which parts could flex if markets or inflation are unkind.

Essential recurring costs — housing, utilities, groceries, insurance, basic transportation, and routine healthcare.
Flexible lifestyle costs — travel, dining, gifts, hobbies, and other spending you value but could adjust temporarily.
Irregular costs — home repairs, vehicle replacement, dental work, family support, and other expenses that arrive in lumps.
Taxes and premiums — income taxes, Medicare premiums, and pre-65 health coverage should sit beside spending rather than disappear into an assumed percentage.
Later-life contingencies — accessibility changes, caregiving, and long-term care are scenarios to examine, not costs every household will experience in the same way.

How do spending guardrails make a budget more useful?

A budget says what you hope to spend; guardrails test how much flexibility the plan may support. A deterministic planning engine can compare your essential and flexible costs with Social Security, pensions, taxes, account withdrawals, and many modeled market sequences, then express the result as a safe-spending range rather than one permanent number.

If the plan moves outside a chosen rail, the educational response is a pre-considered adjustment — often beginning with flexible categories — followed by a fresh calculation. The size and timing of any modeled change should come from your confirmed inputs and assumptions, not from a generic rule or a language model.

How are the planning numbers calculated?

RetireGlide's planning figures come from a deterministic, versioned engine. AI can help organize confirmed inputs and explain the output, but it never computes a projection, tax result, simulation, or guardrail; forecasts remain educational estimates, not guarantees, and the assumptions are available for review.

Frequently asked questions

What is the average retirement spending per month?: BLS 2023 averages work out to roughly $5,430 a month for consumer units led by someone age 65–74 and roughly $4,420 for those led by someone 75 or older. They are descriptive group averages, not a recommended budget, and they include households with very different sizes, incomes, housing, and health needs.
Do retirees spend less every year?: Many do in inflation-adjusted terms, but not in a straight line and not universally. Blanchett's research found an average decline and a spending-smile pattern; an individual plan should still model travel, housing changes, healthcare, and irregular costs explicitly.
Should a retirement budget use 70% or 80% of working income?: Income-replacement percentages are a rough starting point. A bottom-up budget is more informative because retirement removes some costs, changes others, and can introduce healthcare, travel, tax, or support expenses that salary-based rules miss.
What is the difference between a budget and a spending guardrail?: A budget describes planned expenses. A guardrail is a modeled range used to test whether that spending remains resilient as markets, inflation, taxes, and the plan change; it supports review and adjustment rather than promising a fixed safe amount forever.

See this in your own plan

Run your numbers through the same engine — free, in about 3 minutes.

Get your free forecast Try the 60-second calculator

Sources

RetireGlide is an educational modeling tool, not an investment, tax, or legal adviser. Numbers that change annually (tax thresholds, premiums, benefit formulas) are approximate — always verify against the official sources above. Read our full disclaimer.