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DECEMBER 2015 • VOLUME 4 / NUMBER 14

PRICES AND SPENDING

Consumer expenditures vary by age

By Ann C. Foster

The Consumer Expenditure Survey (CE) publishes information

classified by characteristics such as income, household size, and

age of the reference person.1 This article uses 2013 CE data to

examine the relationship between age and consumer

expenditures. This relationship is important because the aging of

the baby-boom generation will influence the overall level and

composition of consumer spending in the years to come.2

Data show that: • Outlays on pensions and Social Security increased with

age up to 45–54 years before declining. • The share of the food budget devoted to food at home increased with age while the share devoted to food away

from home declined. • Healthcare spending, in dollar amount and as a share of the household budget, increased with age. • CE household data classified by age of the reference person show that annual expenditures and pretax income are

“hump” shaped over the lifecycle, lowest for the under 25 years group, then increasing to their highest levels for the

45-54 age group and then declining for the remaining groups (See chart 1 below and tables 1 and 2 at the end).3

In 2013, pretax household income rose from $27,914 for the under-25 age group to $78,385 for the 35–44 age group and

$78,879 for the 45–54 age group and then steadily declined to $34,097 for the 75-and-older group. Total annual

expenditures followed the same pattern, increasing from $30,373 for the under-25 group to $58,784 for the 35–44 age

group and $60,524 for the 45–54 age group and then declining to $34,382 for the 75-and-over group. The differences in

pretax income and in total expenditures were not statistically significant between the 35–44 group and the 45–54 group.

When examining major consumption categories, however, not all follow the life cycle pattern mentioned above.
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Food

Food spending went from $4,698 for the under-25 group to about $7,900 for both the 35–44 and 45–54 years groups and

then declined to $4,144 for the 75 years and older group (see table 2). The components of food spending (food at home

and food away from home) also followed a similar pattern. For the 35–44 years and 45–54 years groups, however, the

difference in the amounts spent for total food, food at home, and food away from home was not statistically significant.

The share of the food dollar spent on food at home increased with the age of the reference person, from 55.4 percent for

the under-25 age group to 68.2 percent for the 75-and-older group, while the share devoted to food away from home

decreased from 44.6 percent for the under-25 group to 31.8 percent for the 75-and-older group. The only exception was

the 65–74 age group, where the share of the food dollar devoted to food at home was slightly lower and the share of the

food dollar devoted to food away from home was slightly higher than those for the 55–64 years group. (See chart 2).
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Housing

Housing outlays did not strictly follow the hump-shaped pattern previously described. Spending increased from $10,379 for

the under-25 age group and peaked earlier in the life cycle at $20,619 for the 35–44 age group, and then became rather

flat until it reached $12,314 for the 75-and-older group. Nonhousing outlays (total expenditures less housing expenditures)

did follow the hump-shaped pattern. Previous research using CE data also found this pattern, even after the effects of

other factors were taken into account (See chart 3).4
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Clothing (apparel and services)

For the under-25 age group, the average amount spent on clothing was not statistically different from the amount spent by

the 25–34 age group—$1,513 and $1,832, respectively. While the greatest amount spent on clothing was $1,960 for the

35–44 age group, this amount was not statistically different from the $1,832 for the 25–34 age group and the $1,826 for

the 45–54 age group. Spending, however, declined to $1,563 for the 55–64 years group to $1,222 for the 65–74 years

group to $768 for the 75 years and older group. These differences were statistically different.

Clothing is often considered a work-related expense that should decrease when household members retire. Households

with a reference person 65–74 years and 75 years and older had the fewest earners (0.7 and 0.2, respectively). This

could be one reason why they spent the least on clothing ($1,222 and $768) and why clothing accounted for the lowest

share of the budget (2.6 percent and 2.2 percent) of all groups (See table 2 and chart 4). Previous research using CE data

has found that even after controlling for the effects of income, family size, and other factors, age was negatively

associated with spending on clothing. Being retired exerted a negative effect on clothing expenditures distinct from age.5
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Transportation

In 2013, transportation spending averaged $5,672 for the under-25 age group. Spending increased to $10,519 for the 35–

54 age group, an amount not statistically different from the $10,782 spent by the 45-54 age group. Spending declined from

$9,482 for the 55–64 age group to $5,149 for the 75-and-older group. Although 87 percent of all households owned at

least one vehicle, only 67 percent of the under-25 group owned at least one vehicle, compared with 78 percent of the 75-

and-older age group. Vehicle ownership among the remaining groups narrowly ranged from 88 percent to 91 percent.

Transportation’s share of the household budget was lowest (15 percent) for the 75-and-older group and ranged from 17

percent to 19 percent for the remaining groups. Because transportation, like clothing, is considered a work-related

expense, spending should be expected to decrease with age of the reference person and the accompanying decline in

number of earners per household. This pattern may be seen in chart 4.6 
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Healthcare

Out-of-pocket healthcare spending increased with the age of the reference person from $943 for the under-25 age group

to $5,188 for the 65–74 age group. The $4,910 spent by the 75-and-older group was not statistically different from the

amount spent by the 65–74 group. Healthcare’s share of the household budget increased with age from 3.1 percent for the

under-25 group to 14.3 percent for the 75-and-older group. Previous research using CE data from the 1998, 2003, and

2008 Interview Surveys also found a positive association between healthcare spending and age among households with

healthcare expenses.7

Because the CE does not sample the institutionalized population, most household spending on nursing home care is not

included. Data from the National Health Expenditure Accounts (NHEA), which include the institutionalized population,

show that in 2013, household out-of- pocket spending accounted for 29.4 percent ($45.8 billion) of the $155.8 billion spent

on nursing home care. If the institutionalized population were included in the CE, it is likely that healthcare spending for the

65–74 and 75-and-older age groups would be much higher and claim a greater share of the budget compared with

younger age groups.8

Entertainment spending

Entertainment spending averaged $1,243 for the under-25 age group. Spending increased to $2,958 for the 35–44 age

group, an amount not statistically different from the $3,070 spent by the 45–54 age group. Spending declined to $2,651 for

the 55–64 age group, an amount not statistically different from the $2,488 spent by the 65–74 age group. The $1,422

spent by the 75-and-older group was statistically different from the amounts spent by the other age groups. The share of

the household budget accounted for by entertainment spending followed no consistent pattern. The budget share claimed

by entertainment was highest (5.3 percent) for the 65–74 age category and lowest (4.1 percent) for the under-25 and the

75-and-older categories.9 Existing studies using CE data indicate that the age of the reference person, other factors being

equal, is negatively associated with entertainment spending.10

Pensions and Social Security

Outlays on pensions and Social Security steadily increased in dollar amount and as a share of total expenditures from the

under-25 age group ($2,153 and 7.1 percent) to the 45–54 group ($7,305 and 12.1 percent), gradually declining to ($6,593

and 11.8 percent) for the 55–64 age group. This was followed by a sharp declines for the 65–74 group ($2,833 and 6.1

percent) and 75-and-older group, ($832 and 2.4 percent). These findings mirror the number of earners per household in

each age group, which went from 1.1 in the under-25 age category to 1.6 in the 35–44 and 45–54 age categories, before

declining from 1.3 for the 55–64 age category to .7 and .2 for the 65–74 and 75-and-older categories, respectively.

Households with a reference person 65–74 and 75 and older are more likely to have retired members who are collecting

pension and Social Security benefits rather than making contributions. (See chart 4).11

Other expenses

The amount spent on other expenses12 followed the typical hump-shaped pattern, increasing from $3,371 for the under-25

age group to $6,833 for the 45–54 group and then declining to $4,844 for the 75-and-older group. The share of the budget

accounted for by this category followed no distinct pattern.

Conclusions

Total annual average household expenditures and associated income increased with the age of the reference person from

the under-25 age group to the 35–44 group, which was not statistically different from the 45–54 group. Annual spending

and income then declined with age of the reference person for the remaining groups. Household size also increased with
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age of the reference person from 2.0 persons for the under-25 age group to 3.4 for the 35–44 age group and then declined

to 1.6 persons for the 75-and-older group. Larger households, other factors being equal, would need to spend more for

most goods and services compared with smaller households.

With one exception, the share of the food budget devoted to food at home increased with age while the share devoted to

food away from home declined.

Spending on clothing, transportation, and pensions and Social Security was lower in dollar amount and as a share of the

household budget, for households with a reference person 65–74 years and 75 years and older compared with the sample

as a whole. Older households had the fewest earners (0.7 for those with a reference person 65–74 years old and 0.2 for

households with a reference person 75 and older, compared with 1.3 for the sample as a whole), indicating that spending

on the three categories are largely work-related and decreases when household members retire.

Healthcare was the only expenditure that increased, in both dollar amount and as a share of the household budget, with

the age of the reference person.
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Table 1. Consumer unit characteristics, by age of reference person, Consumer Expenditure Survey, 2013

Item All

Age

Under 25 25–34 35–44 45–54 55–64 65–74 75 and

older

Number of consumer units (in

thousands) 125,670 8,275 20,707 21,257 24,501 22,887 16,024 12,018

Percent of consumer units 100.0 6.6 16.5 16.9 19.5 18.2 12.8 9.6

Consumer unit characteristics:

Pretax income $63,784 $27,914 $59,002 $78,385 $78,879 $74,182 $53,451 $34,097

Age of reference person 50.1 21.6 29.8 39.7 49.7 59.2 68.8 81.6

Average number in consumer unit:

Persons 2.5 2.0 2.8 3.4 2.7 2.1 1.9 1.6

Children under 18 .6 .4 1.1 1.4 .6 .2 .1 (a)

Persons 65 and older .3 (a) (a) (a) .1 .1 1.4 1.3

Earners 1.3 1.3 1.5 1.6 1.6 1.3 .7 .2

Vehicles 1.9 1.1 1.6 2.0 2.2 2.2 1.9 1.3

Percent distribution:

Sex of reference person:

Male 47 53 47 45 48 50 50 39

Female 53 47 53 55 52 50 50 61

Race of reference person:

Black or African American 13 13 13 14 14 12 10 8

White, Asian, and all other races 87 87 87 86 86 88 90 92

Hispanic or Latino origin of reference

person:

Hispanic or Latino 13 17 19 19 12 8 7 5

Not Hispanic or Latino 87 83 81 81 88 92 93 95

Education of reference person:

Elementary (1-8) 7 3 5 6 6 6 7 14

High school (9-12) 30 30 25 28 31 29 35 39

College 63 67 70 66 63 64 58 46

Never attended and other (a) (a) (a) (a) (a) (a) (a) (a)

Housing tenure:

Homeowner 64 14 40 62 69 79 82 79

With mortgage 37 7 33 51 50 43 32 12

Without mortgage 26 7 7 11 19 36 50 67
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Item All

Age

Under 25 25–34 35–44 45–54 55–64 65–74 75 and

older

Renter 36 86 60 38 31 21 18 21

At least one vehicle owned or leased 87 67 88 91 89 91 90 78

(a) Value is too small to display.

Source: U.S. Bureau of Labor Statistics.

Table 2. Average expenditures, by age of reference person, Consumer Expenditure Survey, 2013

Item All Age

Under 25 25–34 35–44 45–54 55–64 65–74 75 and older

Total annual expenditures $51,100 $30,373 $48,087 $58,784 $60,524 $55,892 $46,757 $34,382

Food

Mean 6,602 4,698 6,197 7,920 7,907 6,711 6,020 4,144

Share 12.9 15.5 12.9 13.5 13.1 12.0 12.9 12.1

Food at home

Mean 3,977 2,602 3,559 4,641 4,701 4,232 3,728 2,825

Share 7.8 8.6 7.4 7.9 7.8 7.6 8.0 8.2

Food away from home

Mean 2,625 2,096 2,639 3,280 3,206 2,479 2,292 1,319

Share 5.1 6.9 5.5 5.6 5.3 4.4 4.9 3.8

Housing

Mean 17,148 10,379 17,207 20,619 19,001 17,937 15,639 12,314

Share 33.6 34.2 35.8 35.1 31.4 32.1 33.4 35.9

Clothing

Mean 1,604 1,513 1,832 1,960 1,826 1,563 1,222 768

Share 3.1 5.0 3.8 3.3 3.0 2.8 2.6 2.2

Transportation

Mean 9,004 5,672 9,183 10,519 10,782 9,482 7,972 5,149

Share 17.6 18.7 19.1 17.9 17.8 17.0 17.0 15.0

Healthcare

Mean 3,631 943 2,189 3,188 3,801 4,378 5,188 4,910

Share 7.1 3.1 4.6 5.4 6.3 7.8 11.1 14.3

Entertainment

Mean 2,482 1,243 2,214 2,958 3,070 2,651 2,488 1,422
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Item All Age

Under 25 25–34 35–44 45–54 55–64 65–74 75 and older

Share 4.9 4.1 4.6 5.0 5.1 4.7 5.3 4.1

Pensions and Social Security

Mean 5,209 2,153 5,178 6,791 7,305 6,593 2,833 832

Share 10.2 7.1 10.8 11.6 12.1 11.8 6.1 2.4

Other1

Mean 5,421 3,771 4,087 4,827 6,833 6,577 5,394 4,844

Share 10.6 12.4 8.5 8.2 11.3 11.8 11.5 14.1

1

Includes cash contributions, alcohol, tobacco, personal care products and services, reading, education, life and personal insurance, and miscellaneous

expenses.

Source: U.S. Bureau of Labor Statistics.

This Beyond the Numbers article was prepared by Ann C. Foster, an economist in the Office of Prices and Living

Conditions, Bureau of Labor Statistics. Email: foster.ann@bls.gov, telephone: (202) 691-5174.

Information in this article will be made available to sensory-impaired individuals upon request. Voice phone: (202)

691-5200. Federal Relay Service: 1-800-877-8339. This article is in the public domain and may be reproduced without

permission.

NOTES

1In the Consumer Expenditure Survey (CE), the consumer unit is the entity on which expenditure reports are collected.

Consumer units include families, single persons living alone or sharing a household with others but who are financially

independent, or two or more persons living together who share expenses. While "consumer unit" is the proper technical

term for the purposes of the CE, it is often used interchangeably with "household" or "family" for convenience. This article

will use "household" instead of "consumer unit." The reference person is the first household member mentioned by the CE

respondent when asked to “Start with the name of the person, or one of the persons, who owns or rents the home.” It is

with respect to this person that the relationship of the other consumer unit members is determined. For more information,

see BLS Handbook of Methods, Chapter 16, ”Consumer Expenditures and Income,” http://www.bls.gov/opub/hom/pdf/

homch16.pdf. 2The Census Bureau projects that the share of the U.S. resident population 65 years and over will grow from 14.88

percent in 2015 to 20.62 percent in 2030 to 23.55 percent in 2060. For more information, see table 6 of Percent

Distribution of the Projected Population by Sex and Selected Age Groups for the United States: 2015 to 2060, U.S.

Census Bureau, “2014 National Population Projections,” December 18, 2014, http://www.census.gov/population/

projections/data/national/2014.html. The resident population includes all persons, both military and civilian, living in the

United States. The CE is designed to represent the slightly smaller U.S. civilian noninstitutional population and excludes

those living in an institution, such as a nursing home or prison, and active-duty members of the U.S. Armed Forces living

on base. For more information, see “Population Estimates Terms and Definitions,” U.S. Census Bureau, http://

www.census.gov/popest/about/terms.html
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3 Expenditures were greater than pretax income for the under-25 and 75-and-older groups, which is not uncommon for

lower-income groups. CE data show that in 2013, expenditures exceeded pretax income for households with average

pretax income of less than $35,000. Many households in the under-25 age group probably have one or more students who

use loans to help pay expenses while they are in school. The 75-and-older group have the fewest earners (0.2 compared

with 1.3 for households of all ages) and may be liquidating savings and investments to pay for consumption expenditures.

For more information, see Frequently Asked Questions (FAQs), http://www.bls.gov/cex/csxfaqs.htm#q21 and Table 1202.

Income before taxes: Annual expenditure means, shares, standard errors, and coefficient of variation, Consumer

Expenditure Survey, 2013, http://www.bls.gov/cex/2013/combined/income.pdf

4See Fang Yang, “Consumption over the Life Cycle: How Different is Housing?,” Working Paper 635 (Revised August

2006), Federal Reserve Bank of Minneapolis, https://www.minneapolisfed.org/research/wp/wp635.pdf The non-humpshaped housing expenditure pattern is the result of several factors. The under-25 age group has the lowest housing

expenditures, reflecting the fact that most households (86 percent) in this group rent their dwellings. The incidence of

homeownership and housing costs increase rapidly for the 25–34 and the 35-44 age groups before reaching a plateau at

the 45–54 age group. The increasing housing outlays reflect furnishing and appliance costs as well as mortgage and

increased utility costs. These groups have the largest number of persons per household which also adds to housing costs.

For the 65–74 and 75-and-older age groups, housing expenditures remain high because around 82 percent and 79

percent, respectively, are homeowners. Although the majority of homeowners in these groups are without a mortgage, 39

percent of homeowners in the 65–74 age group and 15 percent of homeowners in the 75-and-older group are still making

mortgage payments. It is also possible that many homeowners in these groups are in the dwellings occupied when their

household size was larger, adding to maintenance, utility, and property tax costs relative to current income and household

size.

5Research using the 1972–73 CE found that age of the household head (the husband in husband-wife families) was

negatively associated with clothing expenditures, once the effects of income and other factors were taken into account. 

Households where the head was retired spent less on clothing compared with households where the head was in the

craftsmen category, even after the effects of income and other factors were taken into account. For more information, see

Rachel Dardis, Frederick Derrick, and Alane Lehfeld, “Clothing Demand in the United States: A Cross-Sectional Analysis,” 

Home Economics Research Journal, December, 1981, vol. 10, no. 2, pp. 212–222.

6Previous research using CE data and American Time Use Survey (ATUS) data found that, after controlling for the effects

of other factors, both time spent traveling to and from work and transportation costs began to decline when individuals

were in their early 50s. See Mark Aguiar and Erik Hurst, “Deconstructing Life Cycle Expenditure,” February 2013, http://

faculty.chicagobooth.edu/erik.hurst/research/deconstructing_revision_secondround_final.pdf. 7See Ann C. Foster and Craig J. Kreisler, "Health care spending patterns of U.S. consumers, by age, 1998, 2003, and

2008,” Consumer Expenditure Survey Anthology, 2011, July 2011, pp. 22–28, http://www.bls.gov/cex/anthology11/

csxanth4.pdf. NHEA data, disaggregated by age, also found that average healthcare spending increased with age. For

more information, see David Lassman, Micah Hartman, Benjamin Washington, Kimberly Andrews, and Aaron Catlin, “U.S.

Health Spending Trends by Age and Gender: Selected Years, 2002-10,” Health Affairs, vol. 33, no. 35, May 2014, pp.

815–822.

8For more information, see Centers for Medicare & Medicaid Services, Table 15 Nursing Care Facilities and Continuing

Care Retirement Communities Expenditures; Levels, Percent Change, and Percent Distribution, by Source of Funds:

Selected Calendar Years 1970–2013, NHE Tables, http://www.cms.gov/Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html. When the Centers for Medicare &

Medicaid Services publish NHEA data for subsequent years, data from previous years are often revised. The NHEA data

cited in this endnote are those released with the 2013 estimates on December 9, 2014. Unpublished CE data for 2013

show that CE respondents spent 2.2 billion on nursing home care. Spending by households with a reference person 65
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and older averaged $15.08 compared with $17.26 for the sample as a whole and $17.89 for households with a reference

person younger than 65.

9For a more detailed analysis of entertainment expenditures in 2013, see Ann C. Foster, Movies, music, and sports: U.S.

entertainment spending, 2008–2013,” Beyond the Numbers: Prices and Spending, vol. 4, no. 6 (U.S. Bureau of Labor

Statistics, March 2015), http://www.bls.gov/opub/btn/volume-4/movies-music-sports-entertainment-spending.htm. 10One explanation is that older households are less apt than younger households to participate in activities that require

physical effort, such as cycling, jogging, and camping. Also, limited mobility among members of older households would

likely reduce spending on attendance at sporting events and theater performances. For more information, see Rachel

Dardis, Horacio Soberon-Ferrer, and Dilip Patro, “Analysis of Leisure Expenditures in the United States,” Journal of

Leisure Research, vol. 26, no. 4, October 1994, pp. 309–321, and Sheila Mammen and Ann C. Foster, “Factors Affecting

Household Expenditures for Entertainment Services,” Consumer Interests Annual, 1992, pp. 96–97, http://

www.consumerinterests.org/cia1992. Research using the American Time Use Survey (ATUS) indicates that retirees, other

factors being equal, spent 153 minutes (2.8 hours) more per day than full-time workers on inexpensive leisure activities,

such as socializing and communicating with others, reading, watching television and movies, and attending religious

services. Retirees only spent about a quarter of an hour (14 minutes) more per day on expensive leisure activities, such

as golfing, than full-time workers. For more information, see Charlene M. Kalenoski and Eakamon Oumtrakool, “How

Retirees Spend Their Time: Helping Clients Set Realistic Income Goals,” Journal of Financial Planning, October 2014, vol.

27, no. 10, pp. 48–53.

11In 2013, Social Security, private and government retirement benefits accounted for 45.8 percent of pretax income of the

65–74 years group and 69.1 percent of pretax income of the 75 years and over group. In contrast Social Security, private

and government retirement benefits made up 0.9 percent to 10.2 percent of pretax income of the household groups with a

younger reference person.

12 The other expenses category is composed of cash contributions, alcohol, tobacco, personal care products and services,

reading, education, life and personal insurance, and miscellaneous expenses.

SUGGESTED CITATION

Ann C. Foster, “Consumer expenditures vary by age ,” Beyond the Numbers: Prices and Spending, vol. 4, no. 14 (U.S.

Bureau of Labor Statistics, December 2015), http://www.bls.gov/opub/btn/volume-4/consumer-expenditures-vary-byage.htm

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