The Lifestyle Sign You're Doing Better Than A Lot Of Retirees

There are many different ways to know if you're wealthier than the average retiree, with many centering on hitting certain financial benchmarks. However, these kinds of benchmarks don't always paint a full picture, and some retirees can look financially healthy on paper only to find that a closer look at assets and debts tells a different story. With that in mind, one way to know you're truly doing well in your golden years is more of a habit rather than a benchmark: spending less than what you make.

According to the 2024 Employee Benefit Research Institute (EBRI) Spending in Retirement survey, 31% of retirees reported spending more than they could afford — up from 27% in 2022 and 17% in 2020. Adding to this, 2023 Bureau of Labor Statistics data, via the Federal Reserve, found that households headed by someone 65 or older spent an average of $60,087 against an average after-tax income of $58,969 – meaning spending outpaced take-home pay by more than $1,100. With this trend on a seemingly steady climb since 2020, it's safe to assume these numbers have likely worsened in 2026. So, while counting yourself among retirees who keep their spending below their income might not necessarily mean you're wealthy, it does mean you're doing better than many others.

The first thing retirees should do when trying to reduce spending is create a budget, since doing so can be a solid strategy for tackling impulse spending. A good way to start is by tracking income and expenses for at least a month before building your own cash-flow budget. Annual expenses such as insurance or property taxes should be divided by 12 and factored in as monthly costs. After bills and necessities are covered, it's important to create an emergency fund for surprises like home repairs or car maintenance. It's also smart to give any discretionary or fun spending a fixed monthly allowance. Doing this can help you build a realistic budget that's based on your actual spending instead of an estimated one that you might end up ignoring.

Next, you may need to downsize or make lifestyle cuts. According to BLS data, housing and transportation costs accounted for half of U.S. household spending in 2024. If, for instance, you have two vehicles, you might consider selling one or even swapping them both for a more affordable retiree-friendly used vehicle. You could also try moving to a less expensive home or even a more affordable area — provided the costs of selling and moving don't outweigh the benefits. It's also important to reduce recurring costs, which means things like shopping around for new insurance or even cancelling services that are rarely use can also help.