Although age differences in consumption patterns are often attributed to retirement status, previous consumption research has failed to examine this assumption. In this research, data on 4,004 elderly households were drawn fom the Bureau of Labor Statistics 1972 to 1973 Consumer Expenditure Survey to test the life-stage consumption hypothesis. Using multivariate techniques, expenditure differences between the retired and nonretired family were established for most consumption categories. Compared with the nonretired family, the retired family commits a smaller proportion of additional income to necessities, a much larger proportion to gifts and contributions, and an equal proportion to transportation. Although an analysis of consumption patterns suggests that the average retired household enjoys a considerable degree of economic security, medical care and energy-related expenses emerge as major budgetary problems. Finally, this research indicates that the retired family does not rely on savings to buffer the erosion of income following retirement.
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