Understanding Expenditure Patterns in Retirement

Research Report

Understanding Expenditure Patterns in Retirement

Abstract

Understanding the consumption needs of retirees is critical to assessing the adequacy of retirement income and the possible impact of Social Security reform on older Americans. This study uses data from the Health and Retirement Study, including a supplemental expenditure survey, to analyze spending patterns and consumption needs for adults ages 65 and older. Typical older married adults spend 84 percent of after-tax household income, and nonmarried adults spend 92 percent of after-tax income. Even at older ages individuals devote a larger share of expenditures and income to housing than any other category of goods and services, including health care.

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