Households run by someone 65 and older spend an average of $45,756 a year according to the latest Bureau of Labor Statistics data. That works out to $3,800 a month. Here’s how those costs break down and how to make sure you have the funds to retire stress-free.

Where Most of the Money Goes

As you age, some costs decrease, others skyrocket. Food costs generally go down, while health care costs go up. Housing is pretty immune to the age of its residents. Out of the $3,800 you’ll need each month, approximately $1,322 will go to housing. 

Transportation costs are about one-third of the average American household at $567. Healthcare gets spendy. The average person spends a total of $280,000 on healthcare in retirement. That’s $499 a month. Retirees spend less than that on food — $483 a month.

How Lifestyle Impacts Savings Needs

The amount of money you’ll need for retirement depends on how long you live and the lifestyle you want to maintain. One-in-four Americans 65 or older will live to be 90. One-in-ten will live to be 95. That means you need to save for at least 30 years of retirement, hopefully more.

To get a feel for the amount of money you’ll need, calculate 70 to 90% of your current monthly spending. If you want to maintain the same standard of living, you’ll need roughly that much money coming from savings each month. You also need to factor in any traveling you want to do and any other extras.

Ways to Add to Your Retirement Funds

Your retirement account probably won’t be your only income stream. There’s also Social Security. The average retiree collects $1,400 a month or $17,000 a year in Social Security.

If you own your home, you can rent it out and move somewhere less expensive. When you travel, you can supplement your costs by renting your home on a short-term basis. It may make financial sense to spend your winters somewhere warm!