What's the largest expense in retirement?

For most retirees, housing is the largest line item (about 35% of total spending per BLS Consumer Expenditure Survey), followed by transportation (15%), food (12%), and healthcare (12% — and growing fastest). A paid-off mortgage shifts the picture dramatically: housing drops to 20–25% and total budget falls 15–25%.

How fast does healthcare inflation grow vs other expenses?

BLS medical-CPI has averaged about 4.4% per year over the last 20 years, vs 2.6% for headline CPI. That difference compounds: $10,000 of healthcare spend today becomes about $23,800 in 20 years vs $16,700 if it grew at headline inflation. Healthcare is the single most under-budgeted retirement category.

What's a realistic monthly budget for a comfortable retirement?

A common middle-of-the-road target is $5,000–$7,500/month for a homeowner couple in a low-cost state, $7,500–$10,000 for a coastal/HCOL state, and $10,000+ for a high-travel lifestyle. Solo retirees typically spend 55–65% of a couple's number, not 50% (housing and many fixed costs don't halve).

How much do I need saved to fund my budget?

Multiply your annual budget at retirement by 25 (the inverse of the 4% rule) for a 30-year retirement. A $60,000/yr budget needs about $1.5M; an $80,000/yr budget needs about $2M. For longer retirements (40+ years) or earlier retirement (FIRE), use 30–33× to be safer.

Should I budget for inflation in retirement?

Yes — and it's the most overlooked planning error. At 2.6% inflation, $5,000/month today becomes $8,400/month in 20 years and $11,000/month in 30. Your nest egg must be sized for the cost of living in the year you retire, not today's prices. This calculator inflates each category to your retirement year automatically.

What expenses go away in retirement?

Common drops: payroll taxes (saves 7.65%), retirement-account contributions, work-related transportation/clothing/lunches, and (eventually) the mortgage. Common adds: 2–3× more healthcare, more travel/leisure, and home repairs you previously deferred. Net: most retirees see a 10–20% reduction in total spending vs. peak-earning years.

How much should I budget for healthcare in retirement?

Fidelity's most recent estimate is about $172,500 lifetime for a single 65-year-old (2024 update), or $345,000 for a couple. That's roughly $7,000–$11,000/year for a couple including Medicare Part B + Part D + Medigap + dental + out-of-pocket. Pre-65 retirees on the ACA marketplace can pay $15,000–$25,000/year for a couple before subsidies.

Does a paid-off house change my retirement budget?

Significantly. A paid-off mortgage typically saves $1,500–$3,000/month, which over a 25-year retirement is $450k–$900k of spending you don't need to fund. Property taxes, insurance, and maintenance still apply (typically 1.5–2.5% of home value annually), but the gross monthly housing cost drops 50–70%.

How should I split a retirement budget between essentials and discretionary?

A common framework is the 70/30 rule: 70% essentials (housing, food, healthcare, utilities, insurance, basic transportation) and 30% discretionary (travel, hobbies, gifts, dining out). The essentials slice should be funded by guaranteed income — Social Security, pensions, annuities — leaving discretionary funded by portfolio withdrawals you can dial down in a bad market year.

Plan · Updated 2026

How much will you actually spend in retirement?

Skip the rule-of-thumb income-replacement ratio. Build your budget category-by-category, compound healthcare and everything else at their real inflation rates, and see the nest egg required to fund it.

Today's monthly budget

Housing

$/mo

Food & groceries

$/mo

Healthcare

$/mo

Inflated at 4.4% medical CPI

Transportation

$/mo

Travel & leisure

$/mo

Utilities

$/mo

Insurance

$/mo

Everything else

$/mo

Years until retirement

0 yr15 yr40 yr

Years in retirement

10 yr30 yr40 yr

Safe withdrawal rate

2.5%4%6%

4% is the Trinity-study default

Today's monthly spend

$5,400

$64,800 / year

Annual cost in year 1 of retirement (2041)

$98,912

$8k / month

Nest egg required @ 4% SWR

$2.47M

Your number

Where your money goes

Housing33%

Food & groceries15%

Healthcare13%

Transportation9%

Travel & leisure11%

Utilities6%

Insurance5%

Everything else7%

Annual cost across retirement

Nominal (future dollars) vs real (today's purchasing power), inflated per category.

Nominal $
Real (today's $)

Lifetime real cost across 30 years: $2,192,496 (today's dollars).

Updated June 2026. Source: BLS CPI-U (headline + medical) 20-year averages. Last verified January 2026. Next review: January each year.

Retirement Budget Builder — How It Works

Each category you enter is multiplied by 12 for an annual figure, then compounded forward to your year-1-of-retirement using a category-specific inflation rate. Healthcare uses BLS medical-CPI's 20-year average (~4.4%); every other line item uses headline CPI (~2.6%).

The nest egg required is your inflated annual cost divided by the safe withdrawal rate you choose. The 4% default is the Bengen / Trinity-study baseline for a 30-year horizon; lower rates (3.0–3.5%) are more conservative for longer retirements.

The chart projects your annual spend year-by-year across the entire retirement, showing both nominal future dollars and real today's-dollar purchasing power so you can see exactly how much inflation eats away at the same lifestyle.

Frequently Asked Questions

Most retirees spend 70–85% of their pre-retirement income, but the right number depends on your housing situation, healthcare needs, and lifestyle. A bottom-up budget — categorized by housing, food, healthcare, transportation, travel, utilities, insurance, and other — gives a far more reliable number than the rule-of-thumb income-replacement ratio.

How Gold IRA Blueprint Keeps This Tool Accurate

Inflation defaults are pulled from src/data/regulatory.ts and re-verified each January using the latest BLS CPI-U print. Healthcare inflation is pinned to the BLS medical-CPI 20-year series. Safe-withdrawal default reflects the current consensus around the Bengen / Trinity studies.

Last reviewed: January 2026 — next review January 2027

Retirement Budget Builder

How much will you actually spend in retirement?

Today's monthly budget

Where your money goes

Annual cost across retirement

Need a $1M+ nest egg? Diversify with physical gold.

Related free retirement tools

Realistic Retirement Age Estimator

Retirement Income Gap Calculator

Healthcare Cost in Retirement Estimator

Retirement Budget Builder — How It Works

Frequently Asked Questions

How Gold IRA Blueprint Keeps This Tool Accurate