The average retiree spends $4,345 on monthly expenses — and burns 75% of that on these 4 things. How does your own spending stack up? | moneywise
For high school and college students with an interest in personal finance and economics, understanding the financial challenges that retirees face can provide valuable insights into budgeting and saving for the future. According to the Bureau of Labor Statistics (BLS), the average annual income for Americans aged 65 and older is approximately $55,335, while their annual spending amounts to $52,141, leaving little room for unexpected expenses. This financial tightrope becomes even more challenging when you consider that the average retirement savings for those aged 65-69 are around $200,000.
Here are four key spending categories that significantly impact retirees’ budgets:
- Housing: Retirees allocate a substantial portion of their income, 36% to be precise, toward housing expenses. Downsizing or exploring more affordable housing options can help retirees free up funds for retirement savings, emergency funds, or debt repayment.
- Transportation: Transportation is the second-largest spending category, accounting for $7,160 in annual expenses. Retirees may consider transitioning to public transit, carpooling, or using alternative modes of transportation to reduce costs.
- Health Care: Health care expenses for retirees amount to $7,030 annually. Prioritizing preventative care, staying active through exercise, and maintaining a healthy lifestyle can help cut down on medical costs.
- Food: Food expenditures, at $6,490, make up over 12% of annual expenses for retirees. Smart meal planning, grocery shopping strategies, and being mindful of dining out can lead to significant savings.
Rising Dough
Considering the financial challenges faced by retirees, how can young adults in high school and college begin planning and saving for retirement early to ensure a more secure financial future?
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I think by not watching what you spend on something and how much you spend have a huge impact on that especially when you are retired.
They can start by noticing their wants and needs. Many teenagers spend a lot of their money on their wants and not needs. It’s better to monitor how much they have and how much they can actually spend and not spend all their money before their next paycheck.
Those who are retired possibly spend alot of money without watching what they spend which can have a big impact on them towards the near future if they continuously continue to not watch how they spend money.
I think they could watch their wants that could impact them over a long term. This may help them manage their liabilities when they are older and decrease their stress. Though you may not be able to save from such a young age you can start planning how you want your life to play out.