Retiree Spending Rises 2% Amid Housing Costs
Households headed by someone 65 or older spent an average of just under $61,000 in 2025, according to Bureau of Labor Statistics data.
Updated on Nov. 7, 2026 in Retirement Planning
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Bureau of Labor Statistics data showed households headed by someone 65 or older rose spending 5% in 2025. Retired households in that age group spent an average of just under $61,000, up 2% from the previous year.
Why it matters
The 2% increase in retiree spending trailed both inflation and the 2.5% Social Security cost-of-living adjustment, indicating retirees' spending power grew more slowly than their benefit increases. Housing, healthcare and transportation dominate these budgets, making them key areas for retirement planning.
Retired households headed by someone 65 or older spent just under $61,000 in 2025, a 2% rise that trailed both inflation and the 2.5% Social Security cost-of-living adjustment. Overall spending for households in this age group rose 5%, compared with an average of $81,905 for all U.S. households.
The players
Bureau of Labor Statistics
The Bureau of Labor Statistics is the principal federal agency responsible for measuring labor market activity, working conditions, and price changes in the U.S. economy.
The details
Housing accounted for 38% of retirees' spending in 2025, averaging $22,966 annually including utilities, and four-fifths of retired households own their homes, 57% of them outright. Transportation totaled $9,248 and healthcare $7,938, with insurance premiums making up two-thirds of healthcare costs.
Timeline
2025: Retiree household spending rose 2% over the prior year.
2025: Spending by households headed by someone 65 or older rose 5%.
Retirement Planning Outlook
The 2% rise in retiree spending came in below the 2.5% Social Security cost-of-living adjustment, a gap that matters for households planning around fixed benefit increases. Housing and healthcare costs continue to shape how retirees allocate their budgets.
Retirees relying on Social Security cost-of-living adjustments should note that spending growth of 2% lagged the 2.5% benefit increase in 2025. Planning for housing, healthcare and transportation costs remains central to maintaining purchasing power in retirement.
The takeaway
Retirees should track how their spending categories, especially housing and healthcare, change relative to benefit adjustments. Reviewing these costs annually can help ensure retirement income keeps pace with expenses.
Further reading
Explore more on retirement planning to see how these spending patterns affect long-term savings strategies.
Source note: This article includes information reported by Investopedia.
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