How a Middle-Class Retirement Budget Shifts from 65 to 85: 3 Expenses That Change Most

Retirement does not stay the same over time. As the years go by, financial needs change, and planning ahead can help older adults stay on top of how their money is used. The expenses that matter at 65 can look very different from those at 85.

Christina Mehltretter, a certified public accountant and COO at Carolinas Financial and Retirement Planning, put it this way: “At 65 there is often more spending on vacations, hobbies and entertainment. At 85, those same funds are often put towards health care and maintaining independence.”

Below are three of the biggest expense changes middle-class retirees should expect between ages 65 and 85.

1. Housing

Mehltretter says housing does not necessarily get cheaper with age.

“Although many retirees own their homes and do not have a mortgage, we do see many retirees still need to spend money on property taxes, insurance, home maintenance, and paying some to do things that they used to do themselves,” she explained.

She also noted a growing trend in which older retirees look to move into communities that provide more services, including exterior maintenance and other amenities.

“This spending may ultimately be a larger housing expense, but the retiree is having many things taken care of by moving into a community with amenities,” Mehltretter added. “We see that for many retirees housing remains a large expense.”

2. Food

Melanie Musson, a retirement finance expert with Quote.com, said people usually spend less on food at 85 than they do at 65. She pointed to a Bureau of Labor Statistics survey showing food costs ranging from $6,800 to $5,059 at age 65, then falling to under $4,141 by age 85.

“As people age, they simply don’t eat as much,” Musson said. “Also, you’re more likely to stay close to home at 85 than you are at 65, so eating out doesn’t happen as often.”

3. Healthcare

In Mehltretter’s experience, healthcare is often where retirees are most surprised by rising costs.

“At 65 it may be common for the primary healthcare budget to be Medicare premiums and routine medical care. By age 85, health care expenses often increase and so can the out-of-pocket costs,” she noted. “As those out-of-pocket health care expenses increase, these can become one of the largest expenses in retirement.”

Overall, Mehltretter said most retirees do not simply spend less as they move from 65 to 85.

“They often spend differently through the decades,” she said.