People’s budgets go through plenty of changes during their lives. For instance, people tend to cut down on travel and transportation as they get older and allocate more of their budgets toward healthcare. That’s especially true for wealthy 79-year-old retirees who may not be as mobile as they were a decade ago.
Read More: How Much the Average Upper-Class Retiree Claims in Social Security Benefits at Age 65
Find Out: 5 Clever Ways Retirees Are Earning Up To $1K Per Month From Home
The current group of 79-year-olds consists of people who were born in 1945 and 1946. Using this information, we can review data from the U.S. Bureau of Labor Statistics (BLS) to assess how much they spend.
The Average Monthly Budget of Wealthy 79-Year-Olds
The Bureau of Labor Statistics shows that people who were born in 1945 or earlier spent approximately $49,206 in 2023. Using the CPI Inflation Calculator, we can determine that this annual spend comes to $51,969.91 in today’s money, or roughly $51,970.
That comes to $4,330.83 per month. It’s a reasonable benchmark for people who have saved money over time. The maximum Social Security benefit is enough to keep up with that monthly budget. However, people spend more in their 50s and 60s, leading up to their 70s.
Wealthy retirees may have already paid off their mortgages at this point, making retirement more affordable. Minimizing housing costs to any degree will free up a lot of space in the budget. These retirees may have also sold their car and may no longer drive, but some of them are still regular drivers.
Discover Next: The Money You Need To Save Monthly To Retire Comfortably in Every State
Where Is the Money Going?
The Social Security Administration released the “Expenditures of the Aged Chartbook,” which shows how retirees, including people who are 75 years or older, tend to spend money. These are the numbers from the chartbook:
- Housing: 36.8%
- Out-of-pocket healthcare: 14.0%
- Transportation: 13.1%
- Food: 12.0%
- Entertainment: 4.8%
- Apparel: 1.7%
- Other: 17.5%
Using the $4,330.83 monthly expenditure figure from earlier, we can calculate how much retirees allocate toward each individual expense.
- Housing: $1,593.75
- Out-of-pocket healthcare: $606.32
- Transportation: $567.34
- Food: $519.70
- Entertainment: $207.88
- Apparel: $73.62
- Other: $757.90
Saving Money for Retirement
Saving money is a long-term journey, and while it’s good to know that many wealthy 79-year-old retirees spend roughly $4,330.83 per month, you should aim to give yourself a margin of safety. Your Social Security checks may be enough to cover this amount each month, but being able to tap into an additional $5,000 per month in investments will make your retirement years less stressful.
Good financial discipline can give you a lot of mileage as you save toward your goals. Cutting expenses will help, but you will grow your portfolio faster if you focus on boosting your income and making good investments.
You can also review your monthly expenses to see how much the “Other” category will apply to you. This category is mostly for discretionary spending, but 79-year-old retirees may not make as many discretionary purchases if they’re not getting out as much.
These numbers can give you an idea of how much you have to earn each month when you retire. Then, it’s a matter of calculating how much you have to grow your nest egg while treating Social Security as a nice bonus instead of a vital part of your retirement plan.
More From GOBankingRates
- Auto Experts Say Stop Buying These 4 Hybrid Cars Immediately
- Social Security's Biggest Lie: Why 'Full Retirement Age' Isn't What You Think
- How Middle-Class Earners Are Quietly Becoming Millionaires -- and How You Can, Too
- 6 Clever Ways to Pocket an Extra $1K This Month
This article originally appeared on GOBankingRates.com: What a Wealthy Retiree’s Monthly Budget Looks Like at Age 79
