Less travel, more healthcare spending: 70 to 79
In their report on the Savings Behaviour of Older Households, the Grattan Institute say that overall spending tends to slow at around age 709. Their research suggests that retirees start spending less on eating out, alcohol and clothing after they reach this age and that this happens regardless of how wealthy they are.
Milliman research estimates just how much spending declines, on average, between the ages of 70 and 80. They calculate that retirees can expect their spending to fall at a rate of 6% to 8% across each four-year age band until they turn 80 years of age10. While some of this comes from reduced spending on leisure and travel, they also found that food bills – which make up the largest part of essential spending – fall significantly. Their figures also show that healthcare costs can start to increase after age 70 but not by enough to offset lower spending on food, travel and leisure.
All this data points to a modest fall in household spending for retirees in their 70s. This can be worth factoring into your longer-term budgeting and how much you’ll need to draw from your super and other sources of income during these retirement years.