Published: November 13, 2023

Updated: December 30, 2025

What’s the Average Retirement Spending Per Month?

The average American spends $4,345 per month in retirement, according to the Bureau of Labor Statistics. That’s $52,141 per year.

Retirement planning means making sure you can afford your lifestyle after you stop working. Ideally, you’ll calculate how much money you’ll need and then plan to cover those costs with retirement savings and retirement income.

Of course, the cost of living in retirement isn’t easy to estimate.

How much your retirement will cost depends on your choices - where you live, your hobbies, how much you travel, and so on.

Still, you can get an idea of what you’ll spend by looking at the average retirement expenses per month across the United States. Here are some statistics to help you estimate your average monthly costs in retirement.

Quick Answer

Average retirement spending in America is about $4,345 per month ($52,141 per year) - roughly 80% of pre-retirement spending, based on BLS Consumer Expenditure Survey data.

Understanding the Average Retirement Cost

Overall, the Bureau of Labor Statistics reported that people 65 years old and older spent $52,141 in 2021 (the most recent year of data available).

That’s $4,345 in average retirement costs per month.

Retirees spend significantly less ($15,000 a year less) than the general population, who spend about $67,000 per year.

Of course, remember that there’s lots of variability. Almost half—48%—of retirees surveyed by the Bureau of Labor Statistics spent less than $2,000 per month. Some retirees spent much, much more. That variability in spending presents a challenge because it means your costs could be much higher or lower depending on your lifestyle.

Still, the statistics are useful.

One takeaway is that the costs of people in retirement are about 80% of what people who are working spend. That means that one useful way to estimate your retirement costs is to figure out how much you’re spending now and then multiply that by 0.8.

Of course, that’s just a back-of-the-napkin estimate of your retirement costs. Your real costs will vary tremendously based on a multitude of factors, including both personal choices and external circumstances.

Here's a breakdown of some key factors that typically influence retirement spending:

• Where you live. The state you choose to live in will affect the cost of living, housing costs, and taxes. Remember, some states do not tax retirement income!
• Lifestyle choices. If you want to travel extensively or pursue expensive hobbies, you’ll spend more than if you choose to live a more modest lifestyle.
• Healthcare expenses. Your health and the cost of healthcare insurance, along with out-of-pocket expenses for medical services, medications, and long-term care, can vary greatly.
• Social activities and entertainment. The cost of club memberships, dining out, and other entertainment can vary widely.
• Taxes. Your tax situation may change in retirement, especially if your income comes from different sources such as pensions, retirement account withdrawals, Social Security, or investment income.

The most important factor in how much you’ll spend is you—your decisions and how you plan for retirement ahead of time.

Key Components of Retirement Costs

Let’s dive a little deeper into the line items in the typical retiree’s budget. Here’s what typical retirement spending looks like.

Housing

Housing is one of the largest expenses for retirees, even though many own their own homes.

On average, housing costs make up about a third of the average retirement budget. People over 65 spent $18,872 on housing in 2021, or $1,573 per month.

That figure includes mortgage payments and rent as well as housing supplies, furniture, equipment, insurance, and other housing costs.

Healthcare

Healthcare costs make up another significant chunk of the budget for older adults. On average, seniors spend $7,032 a year on average for healthcare costs or $586 per month.

These costs include the cost of Medicare premiums, deductibles, co-payments, supplemental insurance, prescription medications, and more.

Living Expenses

Then there are your regular living expenses. The Bureau of Labor Statistics found that, on average, seniors spend:

• $7,160 per year ($597 per month) on transportation, including cars and maintenance.
• $6,490 per year ($541 per month) on groceries and dining.

• $2,856 per year ($238 per month) on personal insurance.

Leisure and Entertainment

What about the discretionary expenses—the fun stuff?

On average, people spent $2,889 ($241 per month) on entertainment, hobbies, and activities and $986 ($82 per month) on clothing and services.

Tips for Achieving the Ideal Retirement Budget

Retirement should be a period of relaxation and enjoyment, but without a solid financial plan, it can become a source of stress. Make sure you savor your golden years with these essential tips for creating an ideal retirement budget.

• Start planning early. The earlier you begin saving, the more you can leverage the power of compound interest.
• Consider downsizing or relocating to reduce monthly expenses.
• Stay informed about healthcare options to balance coverage and cost.
• Set aside funds for unexpected expenses.
• Continuously review and adjust your budget as needed.

How Can I Ensure My Savings Last Throughout Retirement?

Retirement should be a time of assurance, not financial uncertainty. Here are some strategies to help you make sure your savings can sustain you through retirement.

Embracing the 4% Rule

One popular method to manage retirement savings is the 4% rule. Withdraw 4% in the first year, then adjust for inflation each year. Historically, this helps savings last ~30 years.

Diversifying Income Sources with Annuities

Diverse sources of retirement income can help make sure you don’t run out of savings. A cornerstone is annuities, which can provide guaranteed income for life.

Annuities offer several benefits:

• Predictability (steady income)
• Tax deferral
• Customization (e.g., inflation riders, death benefits)

Balance Retirement Costs with Steady Retirement Income

Calculating your average retirement cost per month helps give you a sense of one side of your budget. But your income matters, too. Fixed annuities offer a low-risk way to grow your retirement savings, then convert it into guaranteed income.

Frequently Asked Questions

What is a good monthly budget in retirement?

A simple rule of thumb is about 80% of your pre-retirement spending. Based on BLS data, the average retiree spends about $4,345 per month in America, but your number should reflect your location, housing status, healthcare, and lifestyle.

What are the typical costs of a retiree?

Typical line items include housing (~$1,573/mo on average), healthcare (~$586), transportation (~$597), food (~$541), insurance (~$238), and leisure (~$241). Your mix will vary.

Does the average cost of retirement vary by state?

Yes. Housing, taxes, and healthcare drive large differences. Many states do not tax Social Security benefits, and some have lower property or income taxes, which can lower monthly retirement costs.