New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern may be legitimate. Some households "live it up" and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much.
By The Numbers
The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of $70,570 per year for households headed by pre-retirees, Americans age 55-64. That figure drops to $52,141 for households headed by people age 65 and older. For people age 75 and older, that number drops even further to $45,820.1
Spending Pattern
Some suggest that retirement spending is best depicted by a U-shaped graph -- It rises, then falls, then increases quickly due to medical expenses.
But a study by the investment firm BlackRock found that retiree spending declined very slightly over time. Also, medical expenses only spiked for a small percentage of retirees in the last two years of their lives.2
What's the best course for you? Your spending pattern will depend on your personal choices as you enter retirement. A carefully designed strategy can help you be prepared and enjoy your retirement years.
- Bureau of Labor Statistics, 2020
- BlackRock.com, 2023. (Based on a 2017 landmark study that looked at retirement spending.)
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
Advisory services are offered by Q2 Wealth Management, a Registered Investment Adviser. Insurance products are offered through Q2 Wealth Insurance, an affiliated insurance company. Investing always involves risk and possible loss of capital. Past performance is not indicative of future results.
This content is solely for informational purposes. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. This communication shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents other than those States in which Q2 is registered or where otherwise legally permitted. Q2 Wealth Management and Q2 Wealth Insurance are not affiliated with or endorsed by the Social Security Administration or any other government agency.
Advisory services and/or insurance products are only offered to clients or prospective clients where Q2, its affiliates, and/or its representatives are properly licensed or exempt from licensure. Investment adviser representatives of Q2 may only transact business in those states where they are registered or otherwise excluded or exempted from state registration requirements.
“Likes” are not intended to be endorsements of our firm, our advisers, or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. Please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities law. We request that you do not post or comment.
Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client's evaluation.
All expressions of opinion are subject to change without notice. All information herein is current as of the date and is subject to change without notice. Any views or opinions expressed may not reflect those of Q2. Charts, graphs, and formulas may be discussed and displayed which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.
Q2 has a reasonable belief that this marketing does not include any false or materially misleading statements or omissions of facts regarding Q2’s services, investments, or client experiences. Q2 has a reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding Q2’s services, investments, or client experiences.