Read our full analysis for a more in-depth look at these trends.
Paychecks to pensions: The evolution of retiree spending
Strong older generation spending growth is likely good news given the coming retirement wave.
November 2025
Key takeaways
- Older generations — Baby Boomers and Traditionalists — have shown faster credit and debit card spending growth per household than overall households since 2022, according to Bank of America aggregated card data. In 2023, the cost-of-living adjustment (COLA) to Social Security retirement benefit incomes was large compared to wage growth, likely helping boost retirees’ spending relative to other cohorts.
- But COLA increases have been smaller since then and the 2026 COLA announced adjustment of 2.8% is also relatively close to current wage growth. Positive wealth effects from rising equity markets may also be boosting older generations’ spending currently.
- Strong growth in older generations’ spending is “good news” as they are becoming an ever-larger proportion of the U.S. population. And 2026 is likely to see a wave of retirees as Baby Boomers reach “Peak 65.”
- Looking at households before and after retirement, we find that “early retirees” have significantly lower deposits and spending than those who retire later. So while we expect that booming equity markets may help provide support to older generations’ spending for some time yet, it appears people are increasingly expecting to need to retire later.
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