Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTVishesh RaisinghaniSun, June 7, 2026 at 2:05 PM GMT+2 5 min readMoneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.If you’re a retiree on a tight budget, you’re probably spending a lot of time stressing about the little things. Maybe you’re diligent about collecting loyalty points while grocery shopping or replacing old bulbs with LEDs to save on utilities.But if you’re looking to save money, it’s probably better to focus on the biggest line items in your budget.Top PicksHere’s how to get rich from rising US property values with as little as $100 — and without the stress of angry tenantsDave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s how to fix it ASAPThe IRS usually taxes gold as a collectible — but this little-known strategy lets you hold physical bullion tax-free. Get your free guide from Priority GoldThe Federal Reserve’s latest Consumer Expenditure Survey (1) from 2024 offers a glimpse into the typical retiree’s annual expenses and there are two categories that cover a whopping 52.5% of total annual spend.Understanding and tackling these two categories could have a noticeable impact on your retirement budget and quality of life.Two big expensesAs of 2024, a typical retiree spent $59,616 on average. The Federal Reserve’s survey breaks this total budget down into several specific categories, ranging from tobacco products to pet foods.However, much of the budget is dominated by just two categories: housing and transportation.The average retiree spent $22,079 on housing in 2024. That is the largest line item on the survey and accounts for 37% of the total budget. Simply put, many seniors are spending more than a third of their budget just on shelter.It’s a symptom of the ongoing housing affordability crisis, which The Chamber of Commerce (2) recently described as “the most urgent challenge facing the housing market.”“A severe shortage of over 4.7 million homes has created cascading economic and social challenges,” says the report. Young families and first-time homebuyers bear the brunt of this crisis, but retirees who rent or are still paying a mortgage are impacted by this too.Transportation has faced a similar surge in prices. As of 2026, the national average gas price is $4.22, according to AAA (3) and the average new car costs $49,461, roughly 30% more than 2019, according to Kelley Blue Book (4) data cited by CBS News (5).Back in 2024, retirees were spending $9,244 on average on transportation, which accounted for 15.5% of total annual expenses. Together, housing and transportation accounted for more than half (52.5%) of a typical senior’s yearly spending.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info