How Much Do Couples Actually Spend in Retirement?

Here's what usually happens when you search for retirement spending advice: financial websites either terrify you with eight-figure retirement goals or paint an unrealistic picture of living on $30,000 a year while traveling the world.

The truth? Most couples fall somewhere in between, and the actual data tells a much more nuanced story than the headlines suggest.

Let's look at what the Bureau of Labor Statistics (BLS) actually shows about retirement spending for couples, because your retirement plan deserves better than guesswork and fear-mongering.

According to the most recent Consumer Expenditure Survey from the BLS, here's what couples in different retirement age groups actually spend annually:

• Ages 65-74: Approximately $64,000 per year ($5,300 monthly)
• Ages 75 and older: Approximately $48,000 per year ($4,000 monthly)

Notice that significant drop? It's not because older retirees are struggling. Rather, spending naturally decreases as you age. Travel slows down, you've already completed major home renovations, and lifestyle becomes more settled.

But averages only tell part of the story. Your actual retirement spending will depend on three big factors: where you live, whether you have a mortgage, and your health status.

A mortgage-free couple in Albuquerque will have dramatically different expenses than a couple still paying rent in San Francisco. That's not opinion, it's mathematics.

Here's where couples aged 65-74 actually spend their money, based on BLS data:

Housing (30-35% of budget): This includes mortgage or rent, property taxes, insurance, utilities, and maintenance. For the average couple, that's about $20,000 annually. If you've paid off your mortgage, you're already ahead of the curve.

Transportation (15-17%): Car payments, insurance, gas, and maintenance total around $10,000 yearly. Many couples downsize from two cars to one in retirement, which creates substantial savings.

Healthcare (12-15%): Even with Medicare, expect to spend $7,000-$10,000 per year on premiums, supplemental insurance, prescriptions, and out-of-pocket costs. This is one area where the averages can be misleading because costs vary wildly based on health status.

Food (12-14%): Groceries and dining out combined average $8,000-$9,000 annually. Interestingly, this doesn't decrease much with age, though the ratio shifts from restaurants to groceries.

Entertainment and Travel (7-10%): Despite what travel blogs suggest, most couples spend $5,000-$6,000 yearly here. That's meaningful trips, but not constant globetrotting.

Everything Else (20-25%): Clothing, personal care, gifts, insurance, and miscellaneous expenses round out the budget at roughly $13,000-$15,000.

Financial planners have identified what they call the "retirement spending smile," but real data shows it's more of a downward slope with a potential uptick at the end:

The Go-Go Years (ages 65-75): This is when spending peaks. You're healthy, energetic, and checking items off your bucket list. BLS data confirms couples spend most during this decade, averaging that $64,000 annually.

The Slow-Go Years (ages 75-85): Spending naturally decreases by 15-25%. You're still active but traveling less ambitiously. Healthcare costs may rise, but they're often offset by decreased spending on entertainment, dining, and transportation.

The No-Go Years (age 85+): Spending continues to decrease except for potential long-term care needs. If you need assisted living or nursing home care, costs can spike dramatically ($50,000-$100,000+ annually), but most couples in this phase who remain at home spend considerably less than younger retirees.

You've probably heard you'll need 80% of your pre-retirement income. It's repeated so often it's become gospel. But BLS data shows this rule oversimplifies reality.

Here's what actually changes when you retire:

Expenses that disappear or decrease:

• Payroll taxes (7.65% of income gone immediately)
• Retirement savings contributions (no more 401(k) deferrals)
• Commuting costs
• Work wardrobe expenses
• Possibly mortgage payments if you've paid it off

Expenses that increase:

• Healthcare before Medicare kicks in at 65
• Travel and leisure (at least initially)
• Hobbies you finally have time for

For a couple earning $100,000 before retirement, the actual spending need might be anywhere from $50,000 to $75,000, depending on debt status and lifestyle choices. That's 50-75%, not 80%.

The couples who need closer to 100% of pre-retirement income? Those still carrying mortgages, supporting adult children, or planning extensive travel.

Healthcare deserves its own section because it's the one category where averages are almost useless.

According to Fidelity's most recent estimates, a couple retiring at 65 will need approximately $315,000 to cover healthcare costs throughout retirement. That's not including long-term care.

But here's what that actually means month-to-month:

If you're healthy: Medicare Part B premiums ($174.70 each in 2024), a Medigap or Medicare Advantage plan ($100-$300 per person monthly), Part D prescription coverage ($30-$100 monthly), and out-of-pocket costs total around $600-$800 monthly for the couple.

If you have chronic conditions: Add another $300-$500 monthly for additional prescriptions, specialist visits, and treatments.

If you need long-term care: Assisted living averages $54,000 annually, while nursing homes run $90,000-$108,000 per year. These costs can devastate even well-planned budgets.

This is why having an HSA (Health Savings Account) before retirement is so valuable. Those funds grow tax-free and can be withdrawn tax-free for qualified medical expenses, essentially giving you a tax advantage when you'll need it most.

Knowing what average couples spend is interesting, but here's how to make it actionable:

Start with your current spending: Track what you actually spend now (not what you think you spend). Most couples are surprised by the real numbers.

Subtract work-related expenses: Calculate what you currently spend on commuting, work clothes, lunches out, and other job-related costs. These disappear in retirement.

Add retirement-specific costs: Healthcare before 65 if you're retiring early, increased travel budget for those go-go years, and hobbies you'll finally pursue.

Factor in your mortgage status: If you'll have your home paid off, subtract that payment. If not, keep it in your calculations.

Consider your location: BLS data shows retirement spending varies by 30-40% based on geographic location. Your $64,000 budget in Nashville provides a very different lifestyle than the same amount in Boston.

Plan for the phases: Budget higher for ages 65-75, then reduce by 15-20% for subsequent decades (unless long-term care becomes necessary).

Here's something that catches many couples off guard: retirement doesn't mean tax-free.

Your Social Security benefits may be taxable depending on your total income. If your combined income (adjusted gross income + nontaxable interest + half of Social Security) exceeds $32,000 for couples filing jointly, up to 85% of your benefits could be taxable.

Withdrawals from traditional 401(k)s and IRAs are taxed as ordinary income. Required Minimum Distributions (RMDs) start at age 73, forcing you to withdraw and pay taxes whether you need the money or not.

The silver lining? Couples often drop into lower tax brackets in retirement. That $64,000 spending figure from BLS data is what couples spend, not necessarily what they withdraw, because some of it comes from Social Security and some from already-taxed sources like Roth IRAs or regular savings.

This is why tax diversification matters. Having money in traditional retirement accounts, Roth accounts, and taxable accounts gives you flexibility to manage your tax burden year by year.

Real couples spend real money in retirement, and the Bureau of Labor Statistics data gives us a much clearer picture than generic rules of thumb ever could.

The average couple spends about $64,000 annually in early retirement, decreasing to $48,000 in later years. But you're not average. You're you, with your specific mortgage situation, health status, location, and dreams for retirement.

The couples who retire most confidently aren't the ones with the most money. They're the ones who understand their actual spending needs and have built a plan around real numbers, not assumptions.

Start tracking your spending now. Project what changes in retirement. Factor in your specific healthcare needs and housing situation. That's your retirement spending target, and it's probably more achievable than the scary headlines suggest.

Important disclaimer: This article provides educational information about retirement spending patterns but does not constitute financial advice. We are not certified financial planners. Everyone's financial situation is unique, and you should consult with a qualified financial advisor or certified financial planner before making retirement planning decisions.