Is your retirement income above average in America?

Smart Established: What is the average retirement income?

Smart Established: What is the average retirement income?

I wonder how your retirement savings Stack up other Americans’ nest eggs? Or will your income in your post-work years be enough to keep you afloat? It’s only natural to be curious about the average retirement income in the United States. Just remember that you need enough in your retirement days to meet your own needs, not to keep up with the neighbors. a financial consultant They can help you create a financial plan to reach your retirement goals.

Median Social Security retirement income

We all know saving for retirement is the wise course of action. That’s why we have Social Security, a form of forced saving that funnels income from our working years into our golden years. Social Security benefits were never designed to be the only source of retirement income for Americans. This is why saving for retirement is so important, whether through an employer-sponsored plan or on your own.

According to the Social Security Administration, Social Security benefits They make up about a third of seniors’ income. In general, single people rely more heavily on Social Security checks than married people. In 2023, the average monthly retirement income will be from Social Security is $1,827.

However, keep in mind that your Social Security benefits may be smaller. If you do not have 35 years of work under your belt when you start claiming benefits, if your earnings are consistently low or if you are claiming benefits starting at age 62 instead of waiting until full retirement age (Or age 70, if you want maximum benefits), you can expect a small monthly check. There is also a gender gap in Social Security income. Women, because they tend to earn less and work for fewer years, get smaller Social Security checks than men.

The more money you make during your career, the greater the gap between your income needs and your Social Security benefits. Let’s say you are a family of four with two high income earners, a large luxury home, and an elevated lifestyle. You’ll have a harder time getting Social Security than someone who can handle a lower-middle-class income. This means you’ll need to set aside a healthy amount for retirement savings during your working years, or risk a decline in your quality of life during retirement.

If you’re married, remember that your retirement decisions affect your spouse, too. How much a surviving spouse can receive from Social Security depends on the other spouse’s work history — and on when that spouse claimed Social Security. In other words, spouses of people who begin claiming Social Security at age 62 will receive less money in survivors’ benefits.

If you are ready to match up with local advisors who can help you achieve your financial goals, then let’s start.

Average retirement income from savings

Smart Established: What is the average retirement income?

Smart Established: What is the average retirement income?

You may have heard about the impending retirement income shortage in the United States. Words like “crisis” and “disaster” appear in plenty of articles mourning Americans’ lack of retirement savings.

According to the National Institute of Retirement Insurance, nearly 40 million families have no retirement savings at all. In its 2019 Retirement Insurance Outlook model, the Employee Benefits Research Institute (EBRI) estimates that America’s current retirement savings shortfall is $3.8 trillion. What does it mean? Well, the EBRI report aggregates the savings deficit for all US households headed by someone between the ages of 35 and 64. In all, these families have $3.8 trillion less in savings than they should be in retirement.

For more recent data, Fidelity Investments You mentioned that in the third quarter of 2022 The average account balance for an IRA account was $101,900. Employees with a 401(k) averaged $97,200, while those with a 403(b) had $87,400.

Fidelity also estimated that “the average retiree A 65-year-old couple in 2022 may need about $315,000 saved (after tax) for health care expenses in retirement.” Given that more Americans are also living longer than ever before, they will face more challenges covering medical expenses in retirement.

Withdraw retirement income

According to Gallup, the average retirement age is now 62. Let’s say you’ve done an excellent job of saving for retirement. You’ve decided to hang up your hat and get started on the post work life. How do you know how much you can safely withdraw from retirement accounts to live on?

Unless you buy an annuity, you will have to make this decision based on your spending needs and on the performance of your investments. This is why the typical recommendation—that a retiree follow an annual withdrawal rate of 4%—isn’t fool-proof. Our retirement calculator assumes that you will withdraw your retirement income strategically, allowing tax-deferred accounts to grow as long as possible and spending from accounts with minimum distributions required before they touch Roth accounts, to meet a specific lifestyle (either extravagant, today-style, modest or budget-conscious). No 4% rule here.


Smart Established: What is the average retirement income?

Smart Established: What is the average retirement income?

Social Security benefits are great, but they aren’t much on their own. If you want to be able to supplement your Social Security checks with other retirement income, start saving. The earlier you start contributing to a retirement account, the more financial relief you can expect in your post-work years. When it comes time to withdraw your retirement savings, it’s important to be strategic. This will help you improve on the savings you’ve worked so hard to accumulate.

Retirement advice

  • It is considered work with finanational consultant To develop, implement and refine a financial plan for your retirement goals. Free SmartAsset tool It matches you with up to three vetted financial advisors in your area, and you can interview your own advisors at no cost to determine which one is right for you. If you are ready to find a counselor who can help you achieve your financial goals, let’s start.

  • Are you saving enough for retirement? SmartAsset is free Retirement calculator It can help you determine exactly how much you need to save for retirement.

Photo credit: © Catherine Yeulet, ©, ©

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