At a Glance | January 21, 2021 Characteristics of Four Different Spending Types Among Older Households SPENDING PROFILES Share of Each Spending Profile By Age Group We identified four mutually exclusive spending profiles Typical Home Health Discretionary by analyzing the estimated Spenders Spenders Spenders Spenders total spending and spending Households with a Spend 60% Spend 20% Spend 25% or more budget allocation or more of or more of their of their budget on allocations for individual closest to the their budget budget on entertainment, gifts, overall average. on housing. health care costs. and contributions. categories. We also observed how spending profiles changed Age Group 55–64 as individuals aged. 56% 21% 10% 13% 65–74 50% 17% 14% 18% 75–85 45% 17% 20% 18% 0% 100% PROFILE CHARACTERISTICS Socio-Economic Characteristics of Four Spending Profiles Household Expenditure Distribution by Category in 2016 Dollars Discretionary Spenders had the highest total income across all age groups. Age Typical Home Health Discretionary Group Spenders Spenders Spenders Spenders $73k Home Spenders tended to have $74k $58k $142k 55–64 Total Income (Average) the lowest average wealth. $51k $69k $54k $111k 65–74 $40k $45k $35k $88k 75–85 Discretionary Spenders were most likely to report being in a $417k $292k $248k $868k 55–64 coupled household rather than Total Wealth (Average) $439k a single household. $358k $301k $1,156k 65–74 $386k $404k $288k $1,064k 75–85 Home Spenders were also the least likely to hold a college 55–64 48% Single 48% 70% 35% degree. 1000++ 48 +++0CC+ ++100 70 0 +0++CC+ 48 0 ++100 +C0++C+ 35 0 100++ C+++0C+ Households 65–74 45% 54% 67% 34% (%) +100+ 0 54 +0+++CC ++100 67 0 C++0+C+ 45 0 +100+ ++0CC++ 34 0 ++100 ++CC+0+ 75–85 58% 62% 75% 49% ++100 0 62 +CC++0+ ++100 75 0 ++0++CC 58 0 +100+ +0+C+C+ 49 0 ++100 +++0+CC 55–64 24% College 23% 20% 44% ++100 23 0 0+CC+++ +100+ 20 0 CC0++++ 24 0 ++100 +++CC0+ 44 0 +100+ CC++++0 Degree 65–74 17% 18% 15% 38% or Higher 100++ 18 0 0+C++C+ 100++ 15 0 ++0++CC 17 0 ++100 ++0++CC 38 0 +100+ C++0+C+ (%) 75–85 14% 16% 11% 38% 100++ 16 0 +0++CC+ +100+ 11 0 ++0+CC+ 14 0 +100+ ++0++CC 38 0 ++100 +0++CC+ Note: All dollar amounts are in 2016 dollars. Based on data from the Health and Retirement Study and the Consumption and Activities Mail Survey. SOURCE: Zahra Ebrahimi, “Older Americans’ Spending Profiles: One Size Does Not Fit All ,” EBRI Issue Brief, no. 520 (Employee Benefit Research Institute, December 10, 2020). © 2021 EBRI This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, print, or download this report solely for personal and noncommercial use, provided that all hard copies retain any and all copyright and other applicable notices contained therein, and you may cite or quote small portions of the report provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s prior express permission. For permissions, please contact EBRI at permissions@ebri.org.