The Employee Benefit Research Institute examined the spending patterns of those in preretirement (50-64), early retirement (65-74) and late retirement (75+). It found spending tends to decrease over time, and the proportion across spending categories also changes. In general, retiree spending declines during retirement. While housing remains the largest spending category for every age group, older households allocated a smaller share of their budgets to transportation and entertainment and a larger share of their budgets to health care costs. However, the average annual share of health costs for the 65–74 and 75-or-older age groups declined after 2007, the year after Medicare Part D went into effect.
The breakdown of the out-of-pocket health care costs for those 75+ indicates most of the drop in total health costs for this age group is attributed to health insurance and drugs; other components remained largely unchanged.