As people age, they spend more on health care. And the rising cost of health care is one of their biggest worries approaching and during retirement. But health care is not the single largest spending category for older people. Instead, it's the cost of maintaining a home.
An analysis from the Employee Benefit Research Institute has tracked data through 2011, the most recent year for which data are available, and has found that home and home-related expenses may have decreased in dollar amounts as people age, but they take up the same proportion of older people's budgets: 40-45 percent.
There are two costs that do fall as people age: transportation expenses and entertainment expenses. Transportation, the analysis said, falls the most.
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"With retirement, daily transportation needs (such as commuting to work) decrease, and with increasing age and declining health, people become more restricted to the indoors, which cuts entertainment expenses as well."
On the other hand, health expenses rise steadily as people grow older, with households including at least one member aged 50-64 spending 8 percent of their total budget on health costs, but those 85 or over spending 19 percent on the same category.
"Around age 75, health care expenses become the second-largest spending item for older households. By age 90, health care expenses account for more than 20 percent of the households' entire budgets," the analysis said.
The analysis defines home-related expenses as including mortgages, property taxes, homeowner's or renter's insurance, rent, utilities, home repairs, home furnishings, housecleaning supplies, housekeeping and laundry services, gardening and yard supplies, and gardening and yard services.
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