A new study has examined the ways in which spending patterns change as time goes on, finding that seniors ultimately spend far less money than they did when they were younger.
U.S. News reports that the Employee Benefit Research Institute (EBRI) has released a new study that gives an in-depth look at the ways seniors spend their money. The overall trend was that spending decreases as a senior gets older. There's a 19 percent reduction in spending at age 75, a 34 percent drop at 85 and a 52 percent decline by age 95.
The conventional wisdom for retirement is to spend between 75 and 80 percent of what the person used to. However, study author Sudipto Banerjee rejects that notion, saying that every senior is in their own unique situation.
"There is not any universal number like that," Banerjee told the news source. "For different income groups and different demographic groups, people are doing very different things in terms of balancing their spending with their incomes."
Caregivers may want to sit down with their elderly loved ones and plan out their retirement finances. It's always a good idea to set aside some money for an assisted living facility, as these can be beneficial for seniors who may eventually lose the ability to take care of themselves. Independent living communities may be another option for those who can take care of themselves but want the social aspect of living with others their own age. According to the study, home costs account for 42 to 47 percent of a senior's budget, depending on age.