A middle-class retiree at age 85 typically spends approximately $3,500 to $4,200 per month ($42,000–$50,000 annually), reflecting a 34% drop in spending compared to age 65. While healthcare costs may rise, overall expenditures decline due to reduced travel, transportation, and housing expenses.
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.
Only a small percentage of Americans retire with $1 million or more in retirement savings, with figures from the Federal Reserve and Employee Benefit Research Institute (EBRI) showing around 3.2% of retirees hitting that mark, though some sources cite slightly lower numbers for all Americans (around 2.5%) or higher estimates for households nearing retirement (over 10% of older households have $1M+ net worth, not just retirement funds). The reality is most retirees have significantly less, with the median for ages 65-74 being around $200,000-$609,000 in retirement accounts.
Estimating the Average Retirement Expenses in a Year
According to the U.S. Bureau of Labor Statistics, the average retiree household spent around $50,000 per year in 2021. While this is less than the national average of $63,000 across all households, it's still a significant amount.
Americans in their 60s have the most saved for retirement with average balances close to $1.2 million. Average account balances more than double between those in their 20s vs their 30s. Those in their 80s still have an average balance of $801,103 for retirement.
Based on the BLS data and trends, it's likely that the average monthly spend for middle-class Americans who are 80 years old is close to $4,200 or so.
As of January 2025, the average Social Security check for a retired worker is estimated to be around $1,976 per month. This reflects a 2.5% COLA increase from 2024. The average monthly benefit is expected to increase by around $49 compared to 2024.
The top ten financial mistakes most people make after retirement are:
Only a small fraction of Americans, around 1.8% of U.S. households, have $2 million or more saved in retirement accounts, according to analyses of Federal Reserve data by organizations like the Employee Benefit Research Institute (EBRI). This puts them in a very elite group, as most people fall far short of this milestone, with far fewer reaching $3 million (around 0.8%).
1. Health care costs. Although retirees expect health care bills to be a reality, the rising cost of good health care often surprises them, noted Jeffrey Stouffer, a certified financial planner and Finance and Investing Expert on JustAnswer.
Those aged 65 and older averaged a total of $7,714 per year on food, or approximately 12.8% of their annual spending. That included food both at home and away from home. Alcoholic beverages are also included in monthly food costs, but these expenses are minimal, totaling just $41.17 per month.
The estimated average amount changes monthly. For example, the estimated average monthly Social Security retirement benefit for January 2026 is $2,071. When you're ready to apply for retirement benefits, use our online retirement application, the quickest, easiest, and most convenient way to apply.
Only a small fraction of retirees, around 3.2%, have $1 million or more in retirement savings, according to recent Federal Reserve data, making it a rare achievement despite many people believing it's necessary for comfort. The majority have significantly less; the median savings for households aged 65-74 is much lower, around $200,000, highlighting a large gap between the goal and reality, though high-income households fare better.
What Does Sleep Look Like in Older Adults? According to their internal body clock, most older adults need to go to sleep around 7 p.m. or 8 p.m. and wake up at 3 a.m. or 4 a.m. Many people fight their natural inclination to sleep and choose to go to bed several hours later instead.