Does Retirement Spending Really Fall?

Updated August 3, 2026. Quick answer: yes. Spending falls, and it falls a lot. In the 2024 data, mean household spending drops from $83,102 at ages 55 to 64, to $64,232 at 65 to 74, to $54,915 at 75 and over — a decline of about 34 percent across those two steps. The often-repeated “retirement spending smile” does not appear in this data.

What these numbers are. Computed by Clear Money Guide from the Bureau of Labor Statistics Consumer Expenditure Public-Use Microdata, Interview survey, 2024 (released 2025). Figures are annual means per consumer unit, weighted with FINLWT21, with standard errors from the 44 balanced-repeated-replication weights. Our totals reconcile to BLS’s own published Table 1300 within about 2 percent. The Interview survey is not the whole survey — BLS’s published table also folds in the Diary survey — so our category figures run slightly below theirs, which we state page by page rather than hide.

The decline is real, but part of it is household size

This is the honest qualifier that most write-ups skip. Households get smaller as they get older: 2.18 people at 55 to 64, 1.86 at 65 to 74, 1.59 at 75 and over. Some of the fall in household spending is simply fewer people in the household, not the same people spending less.

Per person, the drop is much gentler than the headline. We are not going to present the raw decline as though it were all behavioural, because it is not.

Where does the smile go?

The popular model says spending is high early in retirement (travel), falls in the middle, then rises late (health and care costs). In cross-sectional 2024 data we see the first two phases and not the third: the 75+ cohort spends less in total than the 65 to 74 cohort, not more. Health spending does rise — but not by enough to offset everything else falling.

One caution we will state plainly: this is a snapshot of different people at different ages in one year, not the same households followed over time. A cross-section cannot fully separate ageing from generational differences. Anyone claiming otherwise from this data is overreaching.

What actually falls

Transport is the clearest: $14,492 at 55 to 64 falls to $6,553 at 75 and over, on the Interview survey basis. Fewer commutes, fewer vehicles, less driving. Housing falls in dollars while rising as a share of the budget — from 30 percent to 37 percent.

What this means for planning

Replacement-rate rules of thumb assume you need some fixed percentage of pre-retirement income. The data says spending genuinely declines with age, so a flat inflation-adjusted withdrawal for thirty years likely overstates late-retirement need — while understating the risk that concentrates in health and long-term care, which is not an average, but a tail.

The full study and method · income versus spending

Cite this

Clear Money Guide, “What Retirees Actually Spend: CE PUMD 2024 Interview-survey estimates”, August 3, 2026. Method pre-registered before computation; computation script and reconciliation against BLS Table 1300 published with the study.

General information drawn from the Internal Revenue Code, Treasury regulations and IRS publications, not legal or tax advice. Thresholds and dollar figures are adjusted regularly and several of the rules here turn on facts this page cannot see, so check the current year before you act on a number.