Retirement Retirement Planning

Your Retirement Budget After 75: What Drops and What Goes Up

Retirement spending is not as linear as everyone thought.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated June 3, 2026

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Most retirement plan calculators assume that retirees will spend the same amount each year. Retirees are encouraged to plan their expenses, manage their withdrawals, and have fun while also maintaining their nest egg.

Recent data found, however, that spending changes as people age. For example, retirees tend to spend more early in retirement. Then, spending drops off, only to increase again in the later years, as health care expenses rise.

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Retirement spending declines overall

Research from RAND found that after age 65, retirement spending begins to decline at a rate of 2.4% for couples and 1.7% for single retirees. What's interesting about the research is that spending declines across all wealth classes, which means it doesn't decline because retirees are running out of money. Rather, it could be related to health constraints or lifestyle preferences.

For example, some retirees may spend less as they get older because they do not need to consume as much. Others may want to travel less or require fewer belongings as they age.

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Retirees enjoy their early retirement years

Retirement spending is typically at its highest around age 65. During these early years, retirees spend more on clothing, leisure, housing, and transportation than those aged 70 and above. This is usually the time when those in retirement are taking advantage of not having to work anymore and use their time to enjoy entertainment, leisure, and travel.

At some point, however, retirees' needs begin to change. There are a few spending categories that decline with age and a few that increase.

Transportation becomes less spendy as people age

Transportation is a large spending category for many people throughout their lives. After all, transportation expenses include car payments, insurance, maintenance, gas, and more.

However, this is one of the spending categories that declines after age 75. This decline makes sense, as many retirees stop driving due to health issues. Some may also simply drive less, share a vehicle with a spouse, or rely on family members or ride-shares to run their errands instead.

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Entertainment budgets shrink with age, too

RAND research also found that leisure spending declined with age as well. Those who are in their 70s spend less than those ages 65-69 on entertainment but more, on average, than those over 80.

This may reflect a growing desire to spend more time at home rather than going out seeking entertainment. That doesn't mean that retirees in this age bracket aren't enjoying their days. Rather, they could be finding entertainment being at home, whether it's watching a favorite movie, tending to a garden, or visiting with friends.

As retirees age, travel frequency declines

In addition to entertainment and transportation costs, another spending category that declines with age is travel. While many retirees enjoy traveling after they finish working, health issues, high costs, and uncomfortable travel experiences may eventually lead them to prefer staying closer to home as they age.

According to RAND data, trips and vacation spending increase slightly once retirees turn 70, but by age 75, that spending starts to decline.

Health care and long-term care costs rise significantly

According to Fidelity, the average retiree age 65 and older will spend approximately $172,500 on health care during retirement.

The RAND data shows that spending on health increases as people age, and health care spending is the highest once people reach age 80.

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A rigid withdrawal strategy may not be the best option

What this retirement spending data shows is that retirement spending is not linear. Retirees do not spend the exact same amount every year, and their interests and spending preferences change depending on their age.

So, having a rigid withdrawal strategy where retirees take out the exact same amount every year may not be the best strategy for those who want to make their retirement funds last for decades.

A financial advisor can help with a flexible withdrawal plan

If you're not sure whether or not your retirement plan can fund you during your golden years, speak with a financial advisor.

A financial advisor can look at your current retirement account balances, make recommendations on the best withdrawal strategy for you, and help you plan for future expenses, like health care costs.

Bottom line

Hopefully, with enough hard work and consistent investing over time, people can enjoy the stress-free retirement they've been dreaming of throughout their working lives. One way to avoid money mistakes during the retirement years is to stay flexible when it comes to retirement plan withdrawals.

Being mindful that some expenses change over time can help retirees determine how much to withdraw on a year-by-year basis. That can help them enjoy their retirement lifestyle while still planning for a future when they may need more income to cover certain expenses.

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