"And income isn't keeping pace. Per capita disposable income grew nominally to $67,494 in Q4 2025, up about 3.4% year-over-year. But when you're spending faster than income grows, nominal gains are meaningless. The gap between what Americans earn and what they spend narrowed by over $173 billion in a single year, a clear sign of a household sector under pressure."
"If you want to understand why older Americans can't stay retired, look at two line items: healthcare and housing. Healthcare spending hit $3.69 trillion annualized in December 2025, up 7.7% from January of that year. That's nearly three times the overall inflation rate. For a retiree on a fixed pension or Social Security, a 7.7% annual increase in medical costs isn't an inconvenience. It's a budget crisis."
Millions of older Americans are returning to work because retirement savings and fixed incomes cannot keep pace with rising costs. The personal savings rate declined from 6.2% in Q1 2024 to 3.6% by Q4 2025, indicating households are drawing down cushions. Per capita disposable income rose nominally to $67,494 in Q4 2025, up about 3.4% year-over-year, but spending increased faster and the earnings-spending gap narrowed by over $173 billion. Healthcare spending reached $3.69 trillion annualized in December 2025, up 7.7%, while housing costs rose 3.8% to $3.88 trillion; together they consume 35.3% of consumer spending.
Read at 24/7 Wall St.
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