What's the average 'empty nester' budget?

John W. Schoen Senior Producer • Profile • E-mail

Like a lot of recent retirees, Larry in Kansas is keeping a close eye on his household budget. He's trying to figure out what the "average" empty-nester in his situation spends on various expense categories. So we took a spin through the government consumer spending data to see where the money goes for others in his shoes.

I am recently retired and wanted to know if MSNBC had any stats or budget information on the "average" dollars spent on groceries, eating out and other expense categories for two “empty nesters."
— Larry M., Overland Park, Kan.

If you’re looking for statistics on how Americans spend their money, you’ll probably find just about everything you’re looking for over at the U.S. Bureau of Labor Statistics. Like any set of economic statistics, these “average” numbers often bear little resemblance to what you or I —or any individual — actually spend.

That’s because “averages” smooth out differences like age and income in spending patterns. Regional differences can also have a big impact: You’ll pay 8.5 cents a kilowatt-hour in Cleveland, for example, but it’ll cost you nearly twice that in New York City. In Boston, they spent an average of $834 a year on booze; in Miami the average is less than half that, according to the BLS.

If you dig a little deeper, you can get closer to your own household’s characteristics, and the folks at the BLS are pretty thorough about covering the bases. To find out where the money goes, the Census Bureau, on behalf of the BLS, conducts thousands of interviews with  “consumer units” covering various ages, occupations, races, incomes, regions, education and income levels, household size, etc.

Every three months, for five visits, researchers ask people in each of these “consumer units” to fill out a questionnaire on spending. Consumers also are asked to keep a separate diary, logging everything they spend, every day, for two weeks. So while the numbers are far from perfect, they’re about the best data you can get your hands on for free. (Actually, you’ve already paid for it with your taxes.)

In the end, a lot depends on how you slice the numbers. There’s no “empty nester” category as such. There are tables broken down by the number of people in the household, but the “husband and wife only” category includes couples of all ages. In your case, the closest to your circumstances would probably be the 55- to 64-year-old old slice of the data sorted by age. Still, this isn’t quite your situation: these “consumer units” had 1.3 wage earners in the house and some still had their annoying kids living with them. (But on average, they only had 0.1 child hanging around the household.)

With that in mind, let’s take a look at the “average” budget for Nick and Esther Empty-Nester:

Incomes and Taxes
As of 2005, the latest numbers available, the Empty-Nesters had pre-tax income of $64,156 —$46,563 of which came from wages and salaries; $4,533 from self-employment; $9,582 from Social Security and other retirement plans; $2,539 from interest and dividends; and the rest from things like unemployment, workers’ compensation, veterans’ benefits and other sources.

From that, they paid $3,088 in taxes, including federal, state, local and personal taxes like sales tax. That left them with $61,068 to spend.

Alas, the family balance sheet was not in great shape in 2005. Though the Empty-Nesters managed to save $10,843, their liabilities rose by $15,501 — putting them $4,658 deeper in debt.

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