Latest news with #Retirees
Yahoo
6 days ago
- Business
- Yahoo
I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
Retirement spending statistics are often valuable to consider, whether one is comparing and contrasting said figures with their budgetary situation as retirees or plotting a comfortable path to enjoy one's golden years. Read More: Find Out: ChatGPT is growing in popularity as an artificial intelligence (AI) research tool as well as a personal finance tipster, so it may be valuable to consult its take on exactly how much a middle-class retiree might be expected to spend when they reach age 75. Here's what it said — though, as always, it's best to take generative AI data with a pinch of salt. Using Fed and BLS Data as a Baseline ChatGPT gestured toward data from the Federal Reserve of St. Louis (FRED) and the Bureau of Labor Statistics (BLS) as its primary sources. However, on first glance, while the module did cite BLS table 1300 as an accurate source, it did not correctly identify $53,481 as the mean annual expenditure for Americans aged 75 and older (instead providing a much lower figure of $36,673) in 2022 survey data terms. Once course-corrected, however, ChatGPT provided the following breakdown of expenditures, inflation-adjusted for 2025. Housing: $29,145 Food: $7,249 Healthcare: $9,694 Transportation: $5,390 Entertainment: $2,696 Cash contributions (donations, gifts, alimony or child support): $3,851 Apparel and services: $1,219 Personal insurance: $963 Miscellaneous: $3,977 That amounts to a projected total of $64,184 in annual expenses for middle-class retirees in this age group in 2025. What the future holds is uncertain, and these figures may be less than concrete, but they do provide a general guideline as to what one can expect reality to look like. Discover Next: Key Expense Insights for Retirees Age 75 and Older A few notable pieces of insight that the LLM issued as part of a category breakdown included the fact that housing was, by far, the largest expense — 'even in mortgage-free households' — due to property taxes, maintenance, utilities and insurance. Healthcare did tick upward versus other age groups, logically, but was perhaps less than anticipated due to Medicare coverage. Cash contributions reflected a strong pattern of generosity and gifting within this age cohort, and transportation remained expensive (including gas, insurance and repairs) even though older Americans reported less driving frequency. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 4 Housing Markets That Have Plummeted in Value Over the Past 5 Years Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
Yahoo
6 days ago
- Business
- Yahoo
I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
Retirement spending statistics are often valuable to consider, whether one is comparing and contrasting said figures with their budgetary situation as retirees or plotting a comfortable path to enjoy one's golden years. Read More: Find Out: ChatGPT is growing in popularity as an artificial intelligence (AI) research tool as well as a personal finance tipster, so it may be valuable to consult its take on exactly how much a middle-class retiree might be expected to spend when they reach age 75. Here's what it said — though, as always, it's best to take generative AI data with a pinch of salt. Using Fed and BLS Data as a Baseline ChatGPT gestured toward data from the Federal Reserve of St. Louis (FRED) and the Bureau of Labor Statistics (BLS) as its primary sources. However, on first glance, while the module did cite BLS table 1300 as an accurate source, it did not correctly identify $53,481 as the mean annual expenditure for Americans aged 75 and older (instead providing a much lower figure of $36,673) in 2022 survey data terms. Once course-corrected, however, ChatGPT provided the following breakdown of expenditures, inflation-adjusted for 2025. Housing: $29,145 Food: $7,249 Healthcare: $9,694 Transportation: $5,390 Entertainment: $2,696 Cash contributions (donations, gifts, alimony or child support): $3,851 Apparel and services: $1,219 Personal insurance: $963 Miscellaneous: $3,977 That amounts to a projected total of $64,184 in annual expenses for middle-class retirees in this age group in 2025. What the future holds is uncertain, and these figures may be less than concrete, but they do provide a general guideline as to what one can expect reality to look like. Discover Next: Key Expense Insights for Retirees Age 75 and Older A few notable pieces of insight that the LLM issued as part of a category breakdown included the fact that housing was, by far, the largest expense — 'even in mortgage-free households' — due to property taxes, maintenance, utilities and insurance. Healthcare did tick upward versus other age groups, logically, but was perhaps less than anticipated due to Medicare coverage. Cash contributions reflected a strong pattern of generosity and gifting within this age cohort, and transportation remained expensive (including gas, insurance and repairs) even though older Americans reported less driving frequency. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
Retirement spending statistics are often valuable to consider, whether one is comparing and contrasting said figures with their budgetary situation as retirees or plotting a comfortable path to enjoy one's golden years. Read More: Find Out: ChatGPT is growing in popularity as an artificial intelligence (AI) research tool as well as a personal finance tipster, so it may be valuable to consult its take on exactly how much a middle-class retiree might be expected to spend when they reach age 75. Here's what it said — though, as always, it's best to take generative AI data with a pinch of salt. Using Fed and BLS Data as a Baseline ChatGPT gestured toward data from the Federal Reserve of St. Louis (FRED) and the Bureau of Labor Statistics (BLS) as its primary sources. However, on first glance, while the module did cite BLS table 1300 as an accurate source, it did not correctly identify $53,481 as the mean annual expenditure for Americans aged 75 and older (instead providing a much lower figure of $36,673) in 2022 survey data terms. Once course-corrected, however, ChatGPT provided the following breakdown of expenditures, inflation-adjusted for 2025. Housing: $29,145 Food: $7,249 Healthcare: $9,694 Transportation: $5,390 Entertainment: $2,696 Cash contributions (donations, gifts, alimony or child support): $3,851 Apparel and services: $1,219 Personal insurance: $963 Miscellaneous: $3,977 That amounts to a projected total of $64,184 in annual expenses for middle-class retirees in this age group in 2025. What the future holds is uncertain, and these figures may be less than concrete, but they do provide a general guideline as to what one can expect reality to look like. Discover Next: Key Expense Insights for Retirees Age 75 and Older A few notable pieces of insight that the LLM issued as part of a category breakdown included the fact that housing was, by far, the largest expense — 'even in mortgage-free households' — due to property taxes, maintenance, utilities and insurance. Healthcare did tick upward versus other age groups, logically, but was perhaps less than anticipated due to Medicare coverage. Cash contributions reflected a strong pattern of generosity and gifting within this age cohort, and transportation remained expensive (including gas, insurance and repairs) even though older Americans reported less driving frequency. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on I Asked ChatGPT How Much the Average Middle-Class Retiree Spends Monthly at Age 75: Here's What It Said
CBS News
18-07-2025
- Business
- CBS News
3 ways a reverse mortgage can supplement your Social Security
Retirement planning has become increasingly complex as Americans face longer lifespans, rising healthcare costs and concerns about Social Security's long-term sustainability. While Social Security remains a cornerstone of retirement income for most Americans, the average monthly benefit, which is currently $1,976, often falls short of covering all living expenses. As a result, many retirees find themselves in a financial squeeze, including those who are "house rich but cash poor" – meaning those who are sitting on a significant amount of home equity but struggling with monthly cash flow. For decades, the conventional wisdom regarding homeownership was simple: Pay off your mortgage before retirement and live debt-free in your golden years. However, this approach can leave retirees with substantial wealth tied up in their homes while facing monthly budget constraints, especially in today's inflationary environment, where the prices of essentials are growing. And, the irony of that is stark. You might own a $400,000 home outright but still worry about affording groceries or prescription medications on a fixed income. This is where reverse mortgages enter the conversation as a potential game-changer. With a reverse mortgage, retirees have the option to convert their home's equity into usable income while continuing to live in the home. For homeowners aged 62 and older, this can bridge the gap between Social Security benefits and the lifestyle they want to maintain in retirement. But how does that actually work? Learn how a reverse mortgage can help supplement your retirement income now. If your finances are stretched thin during retirement, here's how opting for a reverse mortgage can help supplement the money from your Social Security benefits: One option retirees have when taking out a reverse mortgage is to receive regular monthly payments rather than a lump sum loan or a line of credit they can draw from. By opting for monthly payments, retirees are essentially able to turn part of their home equity into a steady cash flow, much like creating a second paycheck with their home's equity. For retirees who are relying solely on Social Security, this can provide much-needed breathing room in the budget. For example, you might use the extra income to cover everyday expenses like food, gas and utility bills or even to enjoy small luxuries like travel or hobbies that make retirement more fulfilling. And, unlike a traditional mortgage or home equity loan, you won't be required to make monthly repayments on the money you receive from your reverse mortgage loan. As long as you stay in your home, keep up with property taxes and insurance, and maintain the property, repayment isn't due until you move out, sell the home or die. Compare today's reverse mortgage loan options and find the right fit today. Major medical issues tend to become more common and more expensive as we age, and as a result, medical expenses are one of the biggest financial challenges retirees face. While Medicare and Medicare supplemental insurance can help offset those expenses, it doesn't cover everything, and when you're reliant primarily on your Social Security benefits, all it takes is an unexpected hospital visit or prescription drug bill to throw off your budget. A reverse mortgage can help by giving you access to a lump sum of cash or a line of credit you can tap when needed for these types of costs. This can be especially valuable for covering out-of-pocket long-term care costs, in-home care or home modifications, like installing a stairlift or walk-in shower, that make it easier to age in place. Having these funds available could also help you avoid draining your retirement savings or turning to high-rate credit cards when surprise medical expenses pop up. If you haven't yet started collecting Social Security, using a reverse mortgage could allow you to delay claiming your benefits. For every year you postpone Social Security past your full retirement age (up to age 70), your benefits increase by approximately 8%. So, if you're 62 or older and considering early retirement, you could use reverse mortgage payments to cover living expenses while letting your Social Security benefits grow. This strategy can result in significantly higher lifetime Social Security payments, potentially allowing you to collect 30% to 40% more than if you claimed your benefits at 62. This strategy isn't for everyone, of course, but it could make sense if you want to lock in a higher Social Security payment for the rest of your life — and you're in good health and expect to live well into your 80s or beyond. A reverse mortgage can be a powerful way to supplement Social Security income and give your retirement budget a little more flexibility. Whether you're looking to cover essential expenses, pay for medical care or want to strategically delay claiming Social Security, tapping into your home equity might help you live more comfortably in retirement. But like any financial decision, it's crucial to understand how a reverse mortgage works and make sure this strategy aligns with your goals before making any decision. Done thoughtfully, though, a reverse mortgage could help you make the most of both your home and your hard-earned benefits.
CBS News
15-07-2025
- Business
- CBS News
What is the best age to buy an annuity at?
Retirement planning often feels like trying to hit a moving target. Just when you think you've figured out how much you need to save, inflation shifts the goalposts, market volatility throws you off balance and suddenly you're wondering if your Social Security benefits will be enough to cover any of your expenses during retirement. These types of issues are part of why more people are turning to annuities to lock down a reliable retirement income stream, one that guarantees you won't outlive your money. However, the timing of when you buy an annuity can make or break the benefits. While it might seem like waiting until later in life would guarantee the biggest annuity payout, that strategy doesn't always work, and neither does the flip side of that coin. Buying an annuity too early could lock you into lower returns and limit the growth potential, after all, while waiting too long can mean you miss out on years of steady income that could have supplemented Social Security or retirement savings. So, how do you know when to pull the trigger? Let's break down how your age impacts annuity payouts and what factors should guide your decision. Compare your annuity options online and lock in a great rate today. It's important to understand that the "best" age to purchase an annuity varies from one person to the next, as the right timing depends heavily on your financial goals in retirement. In general, though, annuity payouts are higher for older buyers because insurance companies use life expectancy to calculate payments. That means a 75-year-old will likely receive a larger monthly payout than a 65-year-old who invests the same amount, simply because they're expected to draw on the annuity for fewer years. But waiting to purchase an annuity isn't always the ideal approach. Many financial advisors recommend buying an annuity between the ages of 60 and 70. Purchasing during this window can help you avoid market risks while ensuring you still get significant payouts over time. Remember, though, that there are numerous types of annuities, and while it may make sense to purchase a fixed annuity between the ages of 60 and 70, the rules can differ for other annuity options. For example, deferred annuities grow tax-deferred until you start withdrawing funds, and buying this type of annuity earlier — let's say in your 50s — gives your money more time to grow. However, this strategy requires patience and some financial flexibility, as you won't see any immediate income benefits. Or, if you're leaning toward an immediate annuity to supplement your Social Security with guaranteed monthly payments, waiting until you're in your late 60s or early 70s to buy one often provides the highest payout ratio. That said, your health and life expectancy are also critical factors to consider during the process. If you're in excellent health and come from a family with a history of longevity, locking in an annuity earlier could ensure more years of income. Get prepared for retirement by adding an annuity to your portfolio now. If you're trying to time your annuity purchase correctly, it may benefit you to think about how an annuity fits into your overall financial picture rather than focusing on a particular age. Ask yourself: It's also worth considering laddering annuities, which is a strategy where you purchase multiple annuities at different times and rates to help balance payouts and flexibility. This allows you to hedge against locking all your money in at one particular rate. There's no universal answer to the question about the best age to buy an annuity. For many people, purchasing between ages 60 and 70 strikes a good balance between payout size and retirement income needs, but your health, lifestyle and financial situation, as well as the type of annuity you're planning to purchase, will ultimately determine what's right for you. If you're considering an annuity, it may benefit you to work with a financial advisor who understands your goals. They can help you evaluate whether buying now or waiting makes the most sense for your retirement plan. Timing isn't everything, but with annuities, it can make a significant difference in how much income you receive.
