- Most Viewed
- EBRI Bibliography By Topic
- Data Book
- Facts from EBRI
- Fast Facts
- Issue Briefs
- Policy Books
- President’s Reports
- Press Releases
- Special Reports
- Benefit Bibliography
- Benefit FAQs
- Links to Other Internet Resources
- Reference Shelf
- Special Issues of Periodicals
- What’s New in Employee Benefits
Expenditure Patterns of Older Americans, 2001-2009
EBRI Issue Brief #368
Paperback, 28 pp.
PDF, 1,605 kb
Employee Benefit Research Institute, 2012
PRE- AND POSTRETIREMENT EXPENSES: Before retirement, people pay FICA taxes, incur work-related expenses, and set aside money for retirement. But after retirement, most people have different financial obligations, and, as a result, retirees may still be able to maintain their level of preretirement well-being with very different income levels. Studying income, expenditures, and wealth-holding patterns together provides a more complete idea of how people are doing in terms of being able to afford retirement than arbitrary estimates such as income replacement ratios.
UNIQUE DATA: This Issue Brief examines the expenditure patterns of the older section of the population. It uses data from the Consumption and Activities Mail Survey (CAMS), a supplement to the Health and Retirement Study (HRS), conducted by the Institute for Social Research at the University of Michigan, contains detailed expenditure data on 32 categories, and follows the same group of individuals over eight years In addition, the income and wealth data available in the HRS are used to establish the financial standing of older households.
DECLINING EXPENSES: Household expenses steadily decline with age. With the age 65 expenditure as a benchmark, household expenditure falls by 19 percent by age 75, 34 percent by age 85, and 52 percent by age 95.
HOME EXPENSES: Home and home-related expenses remain the single largest spending category for older Americans. On average, those over age 50 spend around 40 ? 45 percent of their budget on home and home-related items.
RISING HEALTH CARE EXPENSES: Health-related expenses are the second-largest component in the budget of older Americans. It is the only component which steadily increases with age. Health care expenses capture around 10 percent of the budget for those between 50–64, but increase to about 20 percent for those age 85 and over.
DEMOGRAPHIC GROUPS: Singles, blacks, and high school dropouts do not have a sound financial standing in retirement. Their expenditures exceed their income and they hold very little financial wealth. The bottom income quartile, which includes mostly these demographic groups, has the weakest financial standing in retirement.
LONG-TERM CARE AND PRIVATE HEALTH INSURANCE: Long-term care and some form of private health insurance coverage have a significant effect on increased spending by older households.
- 401(k) Valuations Published: September 1, 2016 401(k) Balances and Changes Due to Market Volatility
- Data Book Last Updated: February 2013 A comprehensive collection of the most up-to-date benefit information available