Surprising Ways Older Americans Spend Their Money Now

Laveta Brigham

These days, millennial spending and consumer trends tend to make or break a company, with that generation driving the boom in online shopping that has left some retailers shuttering locations for good. However, it seems as if the headlines might be sleeping on baby boomers, who will continue to drive […]

These days, millennial spending and consumer trends tend to make or break a company, with that generation driving the boom in online shopping that has left some retailers shuttering locations for good. However, it seems as if the headlines might be sleeping on baby boomers, who will continue to drive U.S. spending for the next five to 10 years. According to Visa, consumers over 50 currently account for more than half of all U.S. spending, and they also controlled spending growth within the past decade. There are more consumers over 60 now than ever before, with baby boomers holding off on retirement and spending their earnings. But what do those expenditures look like?

To find out what older Americans are spending their money on, GOBankingRates analyzed data from the Bureau of Labor Statistics’ 2018 Consumer Expenditure Survey. This study compares recent spending by Americans 65 and older to that of the same demographic in 2005 to see how spending has changed over time. The 2005 costs were adjusted for inflation, and the difference and percentage change were calculated from 2005 to 2018.

The total annual expenditures for Americans 65 and older increased by 19% during this time. This study looked specifically at those expenditures with a percentage change of at least 20 points more dramatic than this overall increase, which then were identified as the most surprising. These expenses were ranked from the highest difference in spending to the lowest.

Interestingly, older Americans might be making more time for hobbies as they age, as well as putting money into different forms of entertainment. This could mean the 65-plus set is choosing more of an active lifestyle, with purchases of items such as tobacco products, postage, stationery, and prescription and non-prescription drugs falling by the wayside. Check out the spending habits of older Americans to see if younger Americans will be following the trend.

Last updated: Sept. 23, 2020

Total Spending on Pets, Toys, Hobbies and Playground Equipment

Total Spending on Other Entertainment Supplies

Editor’s note: Entertainment equipment and supplies encompass a variety of items, including indoor exercise equipment, athletic shoes and bicycles. This category also includes trailers, purchase and rental of motorized campers, camping and fishing equipment, sporting gear, boats and photography equipment.

Total Spending on Pensions and Social Security

  • Spending in 2005: $1,372

  • Spending in 2005 (adjusted for inflation): $1,783.29

  • Spending in 2018: $3,044

  • Difference: $1,260.71

  • Percentage difference: 71%

Total Spending on Other Household Expenses

  • Spending in 2005: $538

  • Spending in 2005 (adjusted for inflation): $699.28

  • Spending in 2018: $1,189

  • Difference: $489.72

  • Percentage difference: 70%

Editor’s note: Other household expenses might include housekeeping services, gardening and lawn services, laundry and dry cleaning and termite and pest control. This category also focuses on home security systems, moving, storage, household appliance and furniture repair and computer systems and repair.

Total Spending on Health Insurance

  • Spending in 2005: $2,307

  • Spending in 2005 (adjusted for inflation): $2,998.58

  • Spending in 2018: $4,776

  • Difference: $1,777.42

  • Percentage difference: 59%

Total Spending on Vehicle Rental, Leases, Licenses and Other Charges

Total Spending on Nonalcoholic Beverages

Total Spending on Public and Other Transportation

Total Spending on Other Lodging

Editor’s note: Other lodging could entail stays at vacation homes, schools and colleges, hotels, motels and other accommodations when out of town.

Total Spending on Eggs

Total Spending on Medical Supplies

Total Spending on Life and Other Personal Insurance

Total Spending on Apparel and Services

  • Spending in 2005: $957

  • Spending in 2005 (adjusted for inflation): $1,243.88

  • Spending in 2018: $1,207

  • Difference: -$36.88

  • Percentage difference: -3%

Editor’s note: Apparel and services is an umbrella category that includes the purchase of all clothing for every member of the household, including footwear. Apparel services also include alterations, repairs, dry cleaning, clothing rental and jewelry maintenance.

Total Spending on Mortgage Interest and Charges

  • Spending in 2005: $1,060

  • Spending in 2005 (adjusted for inflation): $1,377.76

  • Spending in 2018: $1,333

  • Difference: -$44.76

  • Percentage difference: -3%

Total Spending on Household Textiles

Editor’s note: Household textiles specifically are used for the bathroom, bedroom, kitchen and dining room. These textiles can include curtains, pillows, linens and other materials.

Total Spending on Major Appliances

Total Miscellaneous Spending

  • Spending in 2005: $839

  • Spending in 2005 (adjusted for inflation): $1,090.51

  • Spending in 2018: $1,032

  • Difference: -$58.51

  • Percentage difference: -5%

The miscellaneous spending category focuses on banking, credit card, mortgages and related spending. This might include safety deposit box rental, credit card fees, legal and accounting fees, cemetery plots and other financial charges.

Total Spending on Fees and Admissions

Editor’s note: Fees and admissions directly relate to entertainment costs such as sporting events, movies, concerts and plays. However, this category also can relate to health and wellness fees such as gym memberships, country club memberships and recreational activities.

Total Spending on Gasoline, Other Fuels and Motor Oil

  • Spending in 2005: $1,208

  • Spending in 2005 (adjusted for inflation): $1,570.00

  • Spending in 2018: $1,442

  • Difference: -$128.13

  • Percentage difference: -8%

Total Spending on Tobacco Products and Smoking

Total Reading Spending

Editor’s note: Total reading spending is fairly self-explanatory, with costs including magazine and newspaper subscriptions, book-club books and digital reading material, as well single-copy purchases of these items.

Total Furniture Spending

Total Spending on Processed Fruits

 

Total Spending on New Cars and Trucks

  • Spending in 2005: $1,370

  • Spending in 2005 (adjusted for inflation): $1,780.69

  • Spending in 2018: $1,530

  • Difference: -$250.69

  • Percentage difference: -14%

Total Spending on Fresh Milk and Cream

Total Spending on Vehicle Finance Charges

Total Spending on Postage and Stationery

Total Spending on Fuel Oil and Other Fuels

Total Natural Gas Spending

Total Spending on Drugs

  • Spending in 2005: $977

  • Spending in 2005 (adjusted for inflation): $1,269.88

  • Spending in 2018: $768

  • Difference: -$501.88

  • Percentage difference: -40%

Total Spending on Floor Coverings

More From GOBankingRates

Methodology: GOBankingRates compared recent spending by Americans 65 and older to spending by the same demographic in 2005 in order to study how their spending has changed over time. GOBankingRates started by compiling data on itemized average expenditures from the Bureau of Labor Statistics’ most recently released Consumer Expenditure Survey (2018). In order to compare CES data across years, GOBankingRates used the BLS’ Consumer Price Index Inflation Calculator to convert the average annual expenditures figure for Americans over 65 in 2005 to its equivalent value in 2018. Then, by dividing this output by the original 2005 figure, the inflation index value was calculated. Multiplying each expense from the 2005 CES for the 65-plus age group by this value adjusted them for inflation. GOBankingRates then calculated the difference in spending for each expense between 2005 and 2018 in 2018 inflation-adjusted dollars, as well as the percentage change over this period. After finding that the total average annual expenditure for Americans 65 and older increased by 19% between 2005 and 2018, GOBankingRates looked at all expenses for which the percentage change in this period was at least 20 percentage points more dramatic than the overall increase and identified those that were most surprising. All data was compiled on and up to date as of Feb. 19, 2020.

This article originally appeared on GOBankingRates.com: Surprising Ways Older Americans Spend Their Money Now

Source Article

Next Post

'In my fifty years, I've never faced a challenge as devastating as this'

Paul Smith Fashion – Getty Images Sir Paul Smith has warned that the effects of the Covid-19 crisis are having a “devastating” impact on the fashion industry.  “It’s been a very difficult few months not just for fashion but for many industries,” the veteran British designer tells The Telegraph, “the […]