Feb-2012 EBRI Issue Brief: Expenditure Patterns of Older Americans
February 14, 2012
But health costs are the second-biggest expense for older Americans, and data show that demographic sub-groups such as singles, blacks, and high school dropouts are outspending their resources in retirement, according to a new report by the nonpartisan Employee Benefit Research Institute (EBRI).
“Home and home-related expenses remain the single largest spending category for older Americans, followed by health care expenses,” said Sudipto Banerjee, research associate with EBRI and author of the new report. “However, health care spending is the only component which steadily increases with age: It captures around 10 percent of the budget for those between 50–64, but increases to about 20 percent for those age 85 and over.”
The EBRI report notes that before retirement, people pay FICA (Social Security) 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 be able to maintain their level of preretirement well-being with very different income levels.
The full article, “Expenditure Patterns of Older Americans, 2001‒2009,” appears in the February 2012 EBRI Issue Brief, online here. It documents the income and expenditure patterns of Americans who are retired or close to retirement, using data from the Health and Retirement Study (HRS) and its supplement Consumption and Activities Mail Survey (CAMS). Both surveys are conducted by the Institute for Social Research at the University of Michigan.
The press release is online here.