Core spending categories for older adults
The spending patterns of older adults are significantly influenced by a transition toward a fixed income and evolving lifestyle needs. Data from the Bureau of Labor Statistics shows a clear picture of where resources are most allocated. For those over 55, the largest expenses are consistently housing, healthcare, food, and transportation. However, the proportion spent on each category changes with age, reflecting new priorities and diminishing needs.
Housing: The biggest bite from the budget
Housing remains the largest expenditure for retirees. For many, mortgage payments may decrease or disappear entirely. However, other costs like property taxes, homeowners' insurance, maintenance, and home modifications to accommodate aging can add up quickly. AARP points out that planning for the costs of remaining in one's home is crucial, especially as hiring help for tasks like cleaning or yard work becomes more common. For those who downsize or move to retirement communities, upfront fees and ongoing costs become the primary housing expense.
Healthcare: A growing necessity
As people age, healthcare costs rise significantly, eventually replacing housing as the biggest expense for many. Fidelity Investments estimates that a 65-year-old retiring in 2024 can expect to spend hundreds of thousands of dollars on medical costs throughout their life. These expenses cover insurance premiums (such as Medicare), medical services, prescription drugs, and other supplies. Spending on preventative care, wellness, and assistive devices also increases, with many choosing to invest in health to reduce future medical bills.
Food and groceries: Prioritizing familiarity and convenience
Older adults tend to spend more per item on groceries, opting for convenience over adventure in their food purchases. Research indicates they often prefer frequent, smaller trips to local supermarkets rather than larger, less-frequent ones to big-box stores. Online grocery shopping and home delivery services are also gaining traction, particularly among those over 80, due to the convenience they offer. Spending on dining out may increase for social purposes, but a larger proportion of the food budget is typically dedicated to meals prepared at home.
Technology for comfort and connection
Modern seniors are increasingly tech-savvy, using devices like smartphones and tablets for staying in touch, managing finances, and accessing health information. They are driving demand for user-friendly, accessible technology, including wearables for health monitoring and smart home devices. Online shopping offers convenience, and older adults are careful, methodical researchers, placing high value on trustworthiness and clear product information.
Shifting priorities and consumer behavior
As consumers age, their motivations for purchasing change. Research shows a move away from materialism toward experiences and value. Brand loyalty is significant for routine purchases like groceries, but older adults will actively compare more complex purchases like healthcare plans and cars. Advertising is viewed with more scrutiny, favoring authentic messaging over flashy deals.
Comparison of consumer spending by age group
| Item | Age 55-64 (Mean Annual Expenditure) | Age 65-74 (Mean Annual Expenditure) | Age 75 and Older (Mean Annual Expenditure) |
|---|---|---|---|
| Housing | $18,006 | $15,838 | $13,375 |
| Healthcare | $4,958 | $5,956 | $5,708 |
| Transportation | $9,321 | $8,338 | $5,091 |
| Food | $6,800 | $6,303 | $4,349 |
Source: Data based on the U.S. Bureau of Labor Statistics Consumer Expenditure Survey. Note: Figures represent mean annual expenditures and were collected in 2014, but illustrate the general spending shifts with age.
Conclusion: A market focused on well-being and ease
In conclusion, understanding what old people buy the most reveals a consumer segment prioritizing security, comfort, and independence. The most significant expenditures are concentrated on essentials like housing and, increasingly, healthcare. However, the market is also influenced by a growing appetite for technology that enhances well-being and simplifies daily life, from online shopping to health-monitoring devices. Businesses that recognize these evolving needs and prioritize accessibility, value, and authenticity are best positioned to serve this powerful and expanding demographic.
Beyond spending: Purchases driven by lifestyle
Beyond the primary expenses, older adults also purchase a range of products and services that reflect their lifestyle and desire to 'age in place'. This includes home modifications for safety and accessibility, as well as subscriptions for convenience and entertainment. As mobility and capacity decrease, reliance on hired help for home maintenance also increases. For affluent seniors, travel, leisure activities, and services like financial planning can also be major purchases. These buying habits reflect a shift towards prioritizing personal well-being and enjoying the rewards of a lifetime of work.
