By the Numbers: Spending Habits of Older Americans
It’s no secret that people’s needs and spending habits change over time. For Older Americans Month, we took a look into the data to highlight some of the spending changes. Check out these Consumer Expenditure Survey fast facts and see how your spending stacks up to that of the older generation:
Older households are more apt to be homeowners (79 percent) than younger households (57 percent). Please note: By “older households,” we mean those with a reference person (often the principal homeowner or renter) 65 years and older, and by “younger households” we mean those with a reference person under 65 years.
Housing is the greatest expense, both in dollar amount ($15,529) and as a share of the household budget (34.8 percent) among older households.
Older and younger households are similar in that 85 percent of older households and 88 percent of younger households own or lease at least one vehicle.
Transportation expenses among older households, however, are lower in dollar amount ($6,846) and as a share of the household budget (15.3 percent) compared with younger households ($10,310 and 17.4 percent, respectively). That’s probably because older households have fewer earners and would be less likely to have job-related transportation costs.
Because older households have fewer earners, pensions and Social Security costs are much lower in dollar amount ($2,401) and as a share of the household budget (5.4 percent) among older households compared with younger households ($7,118 and 12 percent).
Out-of-pocket healthcare expenses are higher in dollar amount ($5,766) and as a share of the household budget (12.9 percent) among older households compared with younger households ($3,912 and 6.6 percent).
Clothing is often a job-related expense that should decrease when household members retire. This could be one reason clothing expenses are lower among older households ($1,060 and 2.4 percent) than younger households ($2,079 and 3.5 percent).
Cash contributions (everything from charitable donations to child support payments) among older households are higher: $2,287 and 5.1 percent, compared with $1,676 and 2.8 percent for younger households.
Social Security, private pension and government retirement payments account for more than half (51.3 percent or $23,912) of the pretax income of older households. Among younger households these sources account for only 3.8 percent ($2,900) of pretax income.