Tuesday, April 12, 2016

Spending patterns of older Americans

From the Bureau of Labor Statistics:

The aging of the United States population will influence the economy for many years to come. The Census Bureau projects that in 2050, the population aged 65 and older will be 83.7 million, almost double its estimate of 43.1 million in 2012...

Understanding expenditure patterns in later life is crucial to evaluating financial security in retirement. This analysis uses integrated data from the 2014 Consumer Expenditure Survey (CE), which separates the 55-and-older age range into three groups: ages 55–64, 65–74, and 75 and older.

Data show that:

*Housing is the greatest expense in dollar amount and as a share of total expenditures for households with a reference person 55 and older.

*Clothing and transportation spending, and contributions for pensions and Social Security decline with the age of the reference person.

*Healthcare spending increases with the age of the reference person.


Demographic characteristics

In 2014, older households (those with a reference person 55 years and older) made up 41.5 percent of the CE sample, compared with 37.5 percent in 2009 and 34.6 percent in 2004, reflecting the aging of the U.S. population. For the group as a whole, annual pretax income was $58,528. Pretax income was $75,241 for households with a reference person 55–64 years old, declining to $35,467 for households with a reference person 75 and older

For all households with a reference person 55 years and older, average household size was 1.9 members with a high of 2.2 for the 55–64 group and a low of 1.6 for households in the 75-and-older group. Seventy-nine percent of older households were homeowners, ranging from 77 percent for the 55–64 age group to 81 percent for the 65–74 group. Most (88 percent) of older households owned at least one vehicle, with ownership declining from about 90 percent for the 55–64 and 65–74 age groups to 81 percent for the 75-and-older group.

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