Close to 50% of retired households spend more money, not less, in retirement 

Contrary to what many of us have been led to believe, being retired doesn’t necessarily mean spending less. A report by the Employee Benefit Research Institute found that 46% of seniors spend more money during their first two years of retirement than during their working years. Meanwhile, 33% of households uphold this spending pattern for six years into retirement.

Source: USA Today article

Spending more in retirement until age slows one down is quite expected in my view. This is even more to be expected if retirement is entered with an existing mortgage or other major obligation. 

Spending in retirement should also include ongoing saving to maintain a fund for emergencies so that such spending does not force unplanned withdrawals from retirement assets. That’s my experience in any case. 


  1. The report shows that 54% spend less. No house payment, no credit card payments, no car payment, because servicing debt in retirement is not in the monthly budget. But without the interest payments to banks, some will be able to make it on less. My sister just retired from a $65,000 per year job, with $25,000 in SS and $75,000 in retirement accounts, there is no way she will be spending more. She has cut her gasoline budget from $2,000 per year to $360, no more 84 mile travel to and from work M-F. I wonder how much of the spending the retirees who spend more is covered by debt. With a .9% car loan many might be buying a new car in retirement. With 0% interest credit cards for 18 months it may be easy for many to spend more for a little while.


    1. Almost a third of people 65 and older have a mortgage. In many cases because of the use of home equity. I guess my question would be how could a person earning $65,000 a year accumulate only $75,000? I know people who earn less and have accumulated much more.


      1. When she started the job in 1980 she was making $9,500.
        She only made wages above 50,000 the last 8 years. Purchased house 10 years ago for $125,000 and zeroed the mortgage with $25,000 from her retirement account, to get rid of the payment.


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