MW Are Americans squandering their retirement savings on eating out?

By Quentin Fottrell

Americans spend almost as much eating out every year as they owe in student debt

I'm just going to have a starter.

That's what I wish I'd said all those times I ate out during my lifetime, both for my waistline and my bank balance (there is a correlation between the two). All those meals add up. They eat into your savings, and you also have less control over what goes into the dishes. How much salt or cream is used in that chicken tikka masala? I'm betting quite a lot.

In fact, I received a letter from a reader, wondering whether dining out is eating into our retirements: "I eat out once a week," they wrote. "Let's assume a family needs $100 a day to eat out because that is their lifestyle (this is quite reasonable since a Quarter-Pounder meal is $20). Over the course of 20 years, you could spend over $1 million in restaurants."

"So assume a couple does this and continues after the kids are gone," they added. "You can easily hit $2 million after 40 years of living this way. It's shocking to realize that a choice many families are making today could end up being the difference between having a decent retirement fund or having nothing." My gut reaction: $100 a day is a lot, but they have a point.

When people are worried about the economy, whether it's President Trump's tariffs, the specter of an economic slowdown or, worse, a recession, which does not appear to be happening anytime soon despite constant predictions, they cut back on leisure activities. Or if they don't do that, they cut back on expensive, or luxurious, discretionary spending.

If you spent $2,250 a year eating out, you'd fork out $123,750 by age 80, if you started at the age of 25.

Recent restaurant earnings are a puzzle: For the second quarter of 2025, released last week, Chipotle said diluted earnings per share fell 2.9% to 33 cents from a year ago, while net revenue rose by 3% to $3.1 billion, mostly due to expansion of stores. That gave investors something to worry about. Were people tiring of Chipotle or, worse, fast-casual dining?

Chipotle $(CMG)$ Chief Executive Scott Boatwright cited "declining consumer confidence." That, at least, tallies with the Moneyist reader concerned about people spending their retirement savings on eating out and takeaway food; it may be an exaggeration to blame eating out, but it represents anxieties about discretionary spending.

Darden Restaurants - which owns Olive Garden, LongHorn Steakhouse and others, including several fine-dining restaurants - released its fiscal fourth-quarter results last month, reporting diluted EPS of $2.58, the same as a year earlier and revenue up 10.6% to $3.3 billion, fueled in part by expansion (25 new restaurants and the acquisition of Chuy's).

Speaking on the earnings call, Darden (DRI) CEO Rick Cardenas took a different view than Chipotle. "Our consumers want to go out and spend their hard-earned money, and we think we're taking some wallet share from fast food and fast casual," he said. That may be an overstatement: Consumer confidence is jittery and still below historical averages.

Don't miss: What on Earth is going on with the American consumer?

Eat out or buy a house?

So how much do people spend eating out? Polling suggests $1,990 to $2,500 a year. (Or $3,640, including takeout.) Americans spend almost as much eating out every year as they owe in student debt ($1.5 trillion versus $1.7 trillion in student debt), according to the U.S. Department of Agriculture. (Total food spending exceeds $2.63 trillion.)

Taking those figures at face value - say, $2,250 a year - you'd spend $123,750 by age 80, if you started eat out at the age of 25. Or $203,784 including takeout. That doesn't quite reach the Moneyist reader's $2 million figure, but at the risk of sounding glib it does add up to a sizable deposit on a house (along with many other discretionary expenses).

Even though a lot of people (50%) spend less than $20 eating out, all of those pizzas and pasta dishes clearly add up. Nearly a quarter (24%) spend $21-$30, 11% spend $21-$40, while 15% spend more than $40 each time they go out for food, according to this survey of 1,000 Americans eating habits by US Foods, a restaurant supplier.

Eating out comes at a premium. You're paying for food, labor, lighting, insurance, building rent and other costs. Some restaurants are charging for extras, like credit-card fees, container fees (for "doggy bags") and kitchen-service charges. Tipping is also an integral part of eating out. Whether people like it or not, it has become part of the social contract.

Eating out comes at a premium. You're paying for food, labor, lighting, insurance, building rent and other costs.

But my own "secret shame" has been "surprise bags," using Too Good To Go, an app designed for people to save money by eating whatever the restaurant has left over - you never know exactly what you're going to get. If it's so bad, why does it feel so good? I like surprises, but it's a Silicon Valley version of Meals on Wheels for budget-conscious consumers.

Opportunity came knocking, or clicking and swiping, with this cheap-food app. And not a moment too soon. Food prices have risen 30% since 2020, according to this analysis. Dining out is increasingly out of reach, even for middle-class Americans. To the Moneyist reader's point, it's a luxury and one Americans can perhaps ill-afford if they're worried about retirement.

The restaurant versus retirement question may be the wrong way around. Amit Sharma, director of the Food Decisions Research Laboratory at Penn State University, has studied this issue and found that people who dined out frequently tended to underestimate their food budget. In other words, they may already be making questionable decisions about their finances.

Using leftovers at home or apps like Too Good to Go help cut down on food waste. The U.S. is one of the biggest wasters of food per capita in the world: almost 60 million tons every year, or 30%-40% of the country's total food supply. Contrary to the confidence of some restaurant CEOs, I have one other reason for trying to avoid eating too often in restaurants.

Nothing tastes as good as saving money.

Don't miss: The restaurant bill came to $110, but my meal was inedible. Am I obliged to tip a waitress who acted like everything was fine?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

More columns from Quentin Fottrell:

After 25 years, I finally asked for separate checks - and my friends iced me out. Did I do something terrible?

Can my husband contest his late brother's $600K will? He experienced oxygen deprivation due to COPD before he died.

I have early Alzheimer's and my husband has stage 4 kidney disease. We just inherited $50K. How can this help us?

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-Quentin Fottrell

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July 28, 2025 07:22 ET (11:22 GMT)

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