Here’s How Much Retirees Spend on Unexpected Expenses Each Year: Are You Prepared?

Andrew Lisa

Sun, February 15, 2026 at 9:50 PM GMT+9 2 min read

Much has been written about the importance of building an emergency fund, but the Center for Retirement Research at Boston College (CRRBC) found that most analyses pertain to working people. Therefore, the nonprofit, nonpartisan institution launched its own study to determine how much emergency savings retirees should set aside and the most likely reasons they will need it.

The center released the study in January, and the results can help retirees or near-retirees plan for the financial cushion that they’re likely to need — because many are dangerously underprepared.

The Sources of Emergency Spending Change in Retirement

The CRRBC study found that 83% of retirees experience “shock” expenses each year, so while they must continue to save for emergencies post-career, they should expect the sources of unexpected costs to change with age.

For most retirees, financial surprises fall into three primary categories.

**Rainy day ($3,300 per year):** General unexpected costs, such as home or car repairs.

**Healthcare ($4,100 per year):** Home accommodations, out-of-pocket medical expenses, dental care, etc.

**Family-related ($5,700 per year):** Helping family members with financial needs or major events, such as spousal deaths or divorce.

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All Income Levels Underestimate Unexpected Costs

The study showed that typical retirees are underplanning, underbudgeting and underestimating the cost of surprise expenditures. When asked to predict what they expected to spend across all three categories, the median for each income bracket lowballed their likely emergency spending, as shown in the following amounts.

Rainy Day

**All:** $2,000

**Under $50,000:** $1,100

**$50,000-$99,999:** $2,200

**$100,000 and up:** $3,700

Family Related

**All:** $1,700

**Under $50,000:** $900

**$50,000-$99,999:** $1,600

**$100,000 and up:** $3,900

Healthcare

**All:** $2,400

**Under $50,000:** $1,800

**$50,000-$99,999:** $2,600

**$100,000 and up:** $3,400

Many Aren’t Prepared for a Single Year, Much Less a Lifetime

Not every household experiences all three emergency cost categories every year. In total, the average retired household spends $7,100 annually on unexpected costs across all categories. Emergencies are more expensive for higher earners, but the per capita expenditure remains strikingly similar across all income levels, each of which spends roughly 10% of their annual income on what the report calls shock costs.

However, most expect to spend much less and budget accordingly.

Story Continues  

The study concluded that approximately 40% of retired households lack sufficient cash to cover a single year of emergencies, and some would still fall short even if they tapped a 401(k) or other retirement fund.

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This article originally appeared on GOBankingRates.com: Here’s How Much Retirees Spend on Unexpected Expenses Each Year: Are You Prepared?

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