Six Types of Older Americans

Households headed by Americans aged 65 or older can be segmented into six clusters based on their spending patterns, say researchers from the Bureau of Labor Statistics. Using data from the 2010-11 Consumer Expenditure Survey, the analysts identified these types...

1. Basic need-meeters (26.9%). The largest and poorest cluster, this segment had an average income of $33,124 in 2010-11 and spent just $23,679. Because of their limited resources, Basic Need-Meeters must devote the largest share of their spending to essentials (43 percent).
2. Housing burdened (25.9%). Fully 78 percent of households in this cluster are still making mortgage payments compared with only 23 to 34 percent of households in the other clusters. Consequently, the Housing Burdened devote the largest share of their budget to mortgage (or rent)—fully 42 percent of their spending versus only 5 to 17 percent in the other clusters.
3. Health care burdened (21.1%). The second-poorest cluster, this group is defined by its outsized out-of-pocket health care spending—or 27 percent of its $29,818 overall spending. Other groups devote only 10 to 12 percent of their spending to health care.
4. Transportation burdened (12.1%). Although this group spent a relatively large $44,245 in 2010-11, it had to devote a hefty 33 percent of that spending to transportation. Fully 60 percent of this group lives in smaller cities of the South and Midwest.
5. Happy retirees (6.3%). This is the richest group, with average annual spending of $54,813. They devote a hefty 31 percent of their budget to "expendables" (entertainment, travel, and household operations). The average income of Happy Retirees and Balanced Budgeters is about the same, but Happy Retirees spend more.
6. Balanced budgeters (5.4%). This group is almost as affluent as Happy Retirees, but it spends less ($47,920 versus $54,813). They devote about an average amount to various budget items, which is why they are considered "balanced."

Source: Bureau of Labor Statistics, Monthly Labor Review, Consumption Patterns and Economic Status of Older Households in the United States