The average retiree spends less money during their retirement years than they did when they were working. A recent Fidelity report found that those who’ve officially left the workforce behind spend anywhere from 55% to 80% of whatever annual salary they had while working. The exact percentage, of course, depends on things like their original income, healthcare expenses and any lifestyle changes they make.

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To dive further into how much retirees are actually spending, and on what, GOBankingRates reached out to retirement experts Dominic James Murray and Jeff Rose for their insight. Here’s what they said.

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How Much Retirees Typically Spend Annually

“As a certified financial planner, I’ve seen firsthand that there’s no one-size-fits-all answer to how much individuals or couples spend in retirement,” said Jeff Rose, CFP and founder of Good Financial Cents. “It really depends on their lifestyle choices, health situation and where they live.”

Although numbers vary by household, there are some figures to give you a better idea of how much retirees tend to spend each year.

“From my experience and recent data, the average annual expenses for adults aged 65 and older tend to vary but offer a good benchmark for planning,” said Dominic James Murray, CEO and independent financial advisor at Cameron James.

“According to The Motley Fool, the average annual expenditure for this age group is around $48,872,” continued Murray​​. “Another source, the Bureau of Labor Statistics, indicates that people aged 65 and older spent an average of $52,141 in 2021, which is about $14,000 less than the average spending of the general population​​​​.”

These are just averages, though.

“Some retirees live quite comfortably on less, especially if they’ve paid off their mortgage and lead a more modest lifestyle,” said Rose. “On the other hand, if you’re dreaming of lots of travel or live in a city with a high cost of living, your expenses could be higher.”

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What Are Retirees Spending Their Money On?

When it comes to what retiree households are actually buying, here are the most common expenses, according to Murray and Rose.

Health-related Expenses

Healthcare costs, which can include prescription medications, insurance and other treatments not covered by insurance, are a major expense during retirement.

“As we grow older, the need for medical attention naturally increases, leading to higher expenses in this category. In my practice, I stress the importance of anticipating these costs in retirement planning,” said Murray.

Rose added, “Things like insurance, medications and regular check-ups can add up. The Fidelity Retiree Health Care Cost Estimate suggests a couple retiring at 65 might need about $315,000 saved just for healthcare expenses.”

That’s not to say that all retirees are going to have the same healthcare expenses, of course. Individuals who have fewer health-related issues are less likely to spend as much money during retirement on this expense. But to be on the safe side, Murray suggested setting aside money for healthcare costs and investing in assets that provide a safety net to reduce the burden of medical expenses.

Food and Dining

Groceries and dining out are also major expenses — both before and during retirement.

“While this might not change drastically, retirees do spend a good chunk of their budget on food, whether it’s grocery shopping or dining out,” said Rose.

According to the Bureau of Labor Statistics, the average retiree household spends between $4,349 and $6,800 on food each year.

Murray suggested that retirees should “adjust their budgets to accommodate these costs while also exploring investment returns that can supplement their income.” This helps ensure that they can continue to afford this everyday expense — and any related social outings — without stressing about their finances.

Housing and Utilities

Even if you no longer have to pay rent or a mortgage, housing and utilities are still two big expenses that can really add up.

“Maintaining a home remains a considerable expense during retirement. Whether it involves mortgage payments, rent or ongoing maintenance and utility costs, these expenses require careful management,” said Murray. “I often counsel retirees on strategies such as downsizing or investing in low-maintenance properties, ensuring that their housing costs align with their retirement budget and lifestyle goals.”

Another housing-related expense is property taxes, which can fluctuate over the years.

The average retiree spends around $17,798 on housing, according to the Bureau of Labor Statistics. Those who have ongoing costs — like maintenance or rent — may spend more than that.

Along with this, Americans — retiree or otherwise — spend, on average, over $5,000 annually on utilities, as reported by Forbes.

Travel and Leisure

Travel, recreation and leisure are all activities that add to retiree households’ total amount of spending. While exact amounts vary widely, it’s still important to calculate and budget these in.

“Many retirees take this time to travel, pursue hobbies or indulge in leisure activities they didn’t have time for before. It’s about enjoying the freedom retirement brings,” said Rose.

Murray added that it’s important to establish an investment strategy that allows retirees to afford these things. “It’s about ensuring that they have the financial means to enjoy their travels and hobbies without compromising their overall financial health,” said Murray.

In addition to leisurely travel, there’s also general transportation to consider. This may include a car payment. But it will very likely include things like gasoline, car insurance, routine maintenance and possibly even rideshare services.

Gifts and Charitable Contributions

Last but not least is gifts and charitable contributions.

“Many retirees wish to support their families or contribute to charities, a decision I deeply respect,” said Murray. “I advise balancing this generosity with financial security, ensuring they can give back without impacting their financial well-being.”

How much you spend on gifts and charitable contributions really depends on your lifestyle and goals. For example, you could find yourself spending more on gifts if you have a large family. Or you might dedicate a greater portion of your retirement income to charity if this is something you value deeply in your life.

Bottom Line

“Retirement marks the beginning of a new chapter, where careful household spending can transform savings into a source of comfort and opportunity,” said Murray.

But ultimately, how much you end up spending in retirement might not be the same as the next person.

“In my practice, I emphasize that these numbers should serve as a guide rather than a strict rule,” said Murray. “Every individual’s retirement journey is unique, influenced by their lifestyle choices, health situation and financial planning done during their working years.”

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This article originally appeared on GOBankingRates.com: I’m a Retirement Expert: This Is How Much Retiree Households Spend in a Year