Cost of Basic Necessities Strain Low-Income Older Households

The cost of necessities is going up. Between 2020 and 2026, average rents jumped 35 percent, while monthly grocery prices rose 33 percent. Such cost increases have made it even more difficult for low-income households—two-thirds of which include older adults—to meet their everyday needs. With income falling short of what it takes to cover necessities, many households are forced to choose between paying for food, utility bills, and other necessities such as medications—potentially putting their health and well-being at risk.

To understand spending trends among low-income households with older adults, AARP and Mathematica reviewed data from the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey. Bringing a personal perspective to the data by including quotes from survey participants, this analysis examines various dimensions of financial strain: spending allocation, average spending growth, spending as a share of income, expenses versus income, and rural/urban spending differences. The paper discusses how the findings underscore the importance of protecting and strengthening social safety net programs that help low-income households meet their basic needs. Read the full report.

Key Takeaways:

• Lower-income households with adults ages 50-plus devote a disproportionate share of overall spending to basic needs; housing, food, and transportation dominate spending.
• Although spending patterns are similar across low-income households regardless of age, those with adults 50-plus spend higher shares on health care.
• The average amount spent on necessities—particularly food and housing—has grown over time.
• Among lower-income households, average spending for necessities exceeds income.