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November 23, 2015 at 11:47 AM
While on average households spend less money in retirement, not all households do so—and they don’t all change their spending in the same ways.
That’s according to new research from the Employee Benefit Research Institute, which found that while households’ average spending in retirement falls during the first two years, almost half (45.9 percent) of retired households actually spent more than they did just before retirement.
That spending does decline over time, the research found, and by the sixth year of retirement, only a third (33.4 percent) spend more than they did preretirement.
It’s not just higher-income households that are doing the spending, either. Households across all income levels engaged in the additional spending.
For those households experiencing lower spending, during their first two years of retirement, two out of five (39.3 percent) spent less than 80 percent of their preretirement spending.
By the sixth year of retirement, a majority (53.1 percent) of households did so.
But for those households experiencing higher spending, during that first two years of retirement, 28.0 percent of households spent more than 120 percent of their preretirement spending.
