|Title||Understanding Expenditure Patterns in Retirement|
|Year of Publication||2005|
|Authors||Butrica, BA, Goldwyn, JH, Johnson, RW|
|Institution||Center for Retirement Research at Boston College|
|Keywords||Consumption and Savings, Income|
Understanding the consumption needs of retirees is critical to assessing the adequacy of retirement income and the possible impact of Social Security reform on the well-being of older Americans. This study uses data from the Health and Retirement Study, including a recent supplemental expenditure survey, to analyze spending patterns and consumption needs for adults ages 65 and older. Results indicate that typical older married adults spend 84 percent of after-tax household income, and nonmarried adults spend 92 percent of after-tax income. Even at older ages individuals devote a larger share of their expenditures and income to housing than any other category of goods and services, including health care. Fully 8 percent of married adults report after-tax incomes that fall short of our estimated basic-needs threshold, consisting of housing, health care, food, and clothing. By comparison, only 3 percent of married adults have incomes below the official poverty level.
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