For many aging Americans, about one-third of their living expenses will be spent on housing, according to a recent report from the U.S. Bureau of Labor and Statistics.
Housing was the greatest dollar expense among households age 55 and older at $16,219, representing 32.9% of total annual expenditures, the report states. As age increased, so did the share of household income spent on housing.
Among aging adults, their total annual expenditures spent on housing begin to decrease after age 55, but the percentage of how much income they are spending on housing increases, the survey states.
For adults ages 55-64, housing costs ($18,006) represent roughly 32% of their annual expenses, compared to 36.5% for those age 75 and older ($13,375).
“Housing was the greatest expense in average dollar amount and as a share of the household budget for older households,” said Ann Foster, an economist in the Office of Prices and Living Conditions, Bureau of Labor Statistics.
The number of older Americans continues to grow each year. By 2050, Americans 65 and older will grow to 83.7 million, which is almost double the estimate of 43.1 million in 2012, according to the Census Bureau.
Today, the vast majority (79%) of households age 55 and older are homeowners, and roughly half (47%) of them own their homes free of mortgage debt.
Compared to their younger counterparts, older households are less likely to be encumbered by mortgage debt. Of those in the 55-64 age group, 44.2% were mortgage debt free, compared to the 82.5% in the 75-and-older age group.
On the other hand, 43% of households ages 55-64 continue to carry mortgage debt, whereas 30% of those 65-74 and just 14% of the 75 and older demographic are still paying their mortgage.
As aging adults spend a sizable share of their income on housing, the data suggests they may face additional challenges later in life when coupling these costs with other expenses, such as health care and transportation.
Written by Alana Stramowski