Retiree households headed by someone in their 60s (specifically 65+) spent an average of roughly $60,000–$61,500 per year ($5,000+ monthly) in 2023–2024. Housing, transportation, and healthcare constitute the largest expenses, with spending generally 26% lower than those aged 55–64.
The average retiree household spends about $60,000 annually, with housing (36%), transportation (15%), healthcare (13%) and food (13%) taking the largest shares of the budget.
Spending decreases significantly with age: Retirees aged 65+ spend 26% less annually than those aged 55–64. 29% of retirees say their spending is higher than they can afford. Most retirees spend less than $4,000 per month (81%), with 3% spending $7,000 or more monthly.
Roughly 7% to 9% of American households have $500,000 or more in retirement savings, though figures vary slightly by source, with data from late 2025 suggesting around 7.2% and older 2022 data indicating about 9%, showing it's a significant milestone achieved by less than one in ten families, despite higher averages driven by wealthy individuals.
Data from the Federal Reserve's Survey of Consumer Finances, shows that only 4.7% of Americans have at least $1 million saved in retirement-specific accounts such as 401ks and IRAs. Just 1.8% have $2 million, and only 0.8% have saved $3 million or more.
Housing. Housing is likely to be your biggest cost in retirement. Many retirees think when they pay off their home, the house payment goes away but property taxes, insurance, and escrow fees never do.
Using the 4% Rule with a $750,000 portfolio:
Monthly withdrawal: $30,000 ÷ 12 = $2,500. Estimated longevity of funds: Around 25 years, assuming average market returns and inflation adjustments.
Retirement Expenses
The next question is whether this would be enough. Many planners estimate retiree living expenses as a percentage of your income the year before retirement. A common percentage is 75%. If you are making $90,000 now and retire next year, that suggests expenses would be 75% of that or $67,500.
Key Takeaways. The average retired household spends around $5,000 per month ($60,000 per year), with housing, healthcare, and food being the largest expense categories.
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to five-and-a-half times your salary. By age 60, your retirement savings goal may be six to 11-times your salary.
Only a small fraction of Americans, around 3% to 4.7%, actually retire with $1 million or more in retirement accounts, according to Federal Reserve data, despite many feeling they need that much for comfort. The median savings for those approaching retirement (ages 65-74) is much lower, around $200,000-$609,000, making the million-dollar milestone rare, though "401(k) millionaires" are growing in number.
Retirees are often surprised by the costs of homeownership, health care and taxes in retirement. The cost of maintaining your retirement lifestyle is higher than most people expect due to the impact of inflation over time.
The average retiree's monthly expenses in the U.S. hover around $4,600 to $5,400, with younger retirees (65-74) spending more, often over $5,000 monthly, while those 75+ spend closer to $4,400 as transportation and entertainment costs decrease, though healthcare costs can rise, with housing, transportation, healthcare, and food being the biggest categories.
Roughly 7% to 9% of American households have $500,000 or more in retirement savings, though figures vary slightly by source, with data from late 2025 suggesting around 7.2% and older 2022 data indicating about 9%, showing it's a significant milestone achieved by less than one in ten families, despite higher averages driven by wealthy individuals.
One common approach is to take required minimum distributions (RMDs) starting at age 73, which helps you avoid penalties and ensures a steady income stream. Another option is to roll over your 401(k) into an IRA, offering more flexibility and potentially better investment choices.
The top ten financial mistakes most people make after retirement are:
A good retirement nest egg aims to replace 80% of your pre-retirement income, often needing 10-12 times your final salary saved by age 67, but the exact amount varies widely based on lifestyle, desired retirement age, location, and expenses like healthcare. Key benchmarks include saving 1x salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67, with a 15% savings rate of your income being a strong general goal.
The short answer: to retire on $80,000 a year in Australia, you'll need a super balance of roughly between $700,000 and $1.4 million. It's a broad range, and that's because everyone's circumstances are different.