There’s no specific data source that lists exactly how much upper-class retirees spend monthly at age 70. However, using data from the consumer expenditures reports issued annually by the U.S. Bureau of Labor Statistics (BLS), fairly accurate estimates can be made.
Here’s a look at how much this demographic tends to spend in retirement, using data from the BLS, Fidelity, the Federal Reserve Bank of St. Louis and Corebridge Financial.
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What Are the 3 Retirement Spending Phases?
Corebridge Financial performed an analysis of all of the government figures regarding retiree spending and determined that there are three distinct retirement spending phases.
The first is the “go-go” phase, in which retirees usually spend the most. This tends to occur shortly after retirement, when retirees are most eager to travel, spend on vacation homes or indulge in their hobbies or other entertainment options. Typically, this falls right around the 70-year age range, although there is of course variation within the data.
Corebridge dubs the middle period of retirement the “slow-go” years. In contrast to the spendy first phase of retirement, travel and entertainment expenses tend to moderate in the “slow-go” years. This is also a period in which some retirees downsize, further trimming costs.
In the final years of retirement, spending tends to decrease even more. Mobility may become an issue for many retirees in this phase, leading to more time at home and less money spent on travel, entertainment and hobbies.
The good news to this pattern is that as you progress through retirement, you’ll likely end up spending less and less as you age.
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How the Upper Class Spends When Compared With Average Americans
The BLS Consumer Expenditure Survey (CES) only reports spending data across broad age ranges. However, it presents real-world spending information that only the BLS can provide. CES data from 2024 shows that retirees from ages 65 to 74 spent an average of $65,149 in 2023. Meanwhile, those 75 and older only spent an average of $53,031, backing up Corebridge’s assertion of a decline in spending as retirees age.
The upper class, however, spends much more than the average retiree. A 2022 study by the Employee Benefit Research Institute showed that 3% of retirees spent more than $7,000 per month. This is a fair approximation for what upper-class retirees spend. However, it’s important to note that when it comes to wealthy individuals, the sky is the limit. While only a handful of retirees spend more than $7,000 per month, many in the upper class spend $10,000, $20,000 or even more on a monthly basis. The $7,000 figure should be considered the bare minimum when it comes to upper-class spending in retirement.
The Upper Class Has Room To Spend
Not surprisingly, the upper class spends much more in retirement than those who are lower on the income spectrum. However, there’s a fundamental difference in the safety margin among the classes.
According to research published in the Financial Planning Association, retirees in the bottom income quintile tend to spend more than they earn in retirement. But those in the upper class tend to draw less than their investments earn. This means that over the course of their retirement, their net worth actually tends to increase.
The Bottom Line
It’s good to be in the upper class during retirement. In most cases, your investment income will far exceed your expenditures, even if they reach $10,000 per month or beyond. This means that you’ll not only enjoy a more lavish lifestyle in retirement, but also that your assets will likely continue to grow, rather than being depleted as is more likely in the lower-income classes.
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This article originally appeared on GOBankingRates.com: How Much the Average Upper-Class Retiree Spends Monthly at Age 70
