Spending patterns do not significantly change for many categories until person reaches age 75. Once the person who is listed as the primary owner or renter of a home reaches 75, spending drops significantly.

An economist at the Bureau of Labor Statistics (BLS) analyzed data from the 2014 Consumer Expenditure Survey. She found that total annual expenditures averaged $56,267 for households in the 55-64 age group, $48,885 for households in the 65-74 age group and $36,673 for those in the 75 and older age group.

For all three groups, housing was the biggest expense, ranging from $18,006 on average for the 55-64 group to $13,375 for the age 75 and older group. It accounted for about a third of total spending regardless of age. The decline in dollar terms reflects a decline in mortgage debt, with 59.5% of older homeowner households having no mortgage.

Spending on clothing declined with age. This pattern existed even after adjusting the data for the effects of income, family size and other factors. Households in the 55-64 group spent $1,789 on clothing compared to $683 for those in the 75 and older group.

Transportation and entertainment expenditures also declined with age. Households in the youngest group spent $8,002 on transportation, while those in the oldest group spent $5,091. Entertainment expenses fell from $2,852 for the 55-64 group to $1,626 for the 75-and-older group.

Conversely, health expenditures experienced a statistically significant increase beyond the age of 64. Those in the 65-74 group spent an average of $5,956 and those in the 75 and older group spent $5,708, compared to $4,958 for those in the 55-64 group. As a percentage of household spending, health care nearly doubled from 8.8% for the youngest group to 15.6% for the oldest group. Adjusting for household size, per person spending was $3,135 and $3,568 for the two oldest groups.

Clothing and transportation are considered to be work-related expenses and should decrease as the number of workers within a household decreases. Similarly, to the extent that older adults become less active with age (due to health-related or other issues), entertainment expenses should also decline.

Keep in mind that these are national figures. Actual expenditures will vary based on locale and lifestyle.

Source: “A Closer Look at Spending Patterns of Older Americans,” Ann Foster, U.S. Bureau of Labor Statistics, March 2016.