For Many, Spending Rises After Retirement

Many households spend more rather than less after retirement, reports the Employee Benefit Research Institute. Analyzing data from the longitudinal Health and Retirement Study, EBRI researcher Sudipto Banerjee finds a rise in spending for many retirees. In the first year or two of retirement, 46 percent of households spend more. By the sixth year of retirement, 33 percent are spending more than they had in their pre-retirement years.

Post retirement spending as a percent of preretirement spending in sixth year of retirement
Spending less than 80 percent of preretirement income: 53.1%
Spending 80 to 100 percent of preretirement income:: 13.4%
Spending 100 to 120 percent of preretirement income: 10.0%
Spending 120 percent or more of preretirement income: 23.4%

Source: Employee Benefit Research Institute, Change in Household Spending After Retirement: Results from a Longitudinal Sample