Average retirement income varies widely across the U.S. In the state with the highest-income retirees, the average retired household brings in more than twice as much in the state with the lowest retirement income figures. Differences are due to local variations in wages and salaries, cost of living, tax rules, the incidence of pension plans and other factors. Knowing your state’s averages can provide helpful context when evaluating your own retirement readiness. Knowing how other states stack up can help you decide where to retire. Discuss with a financial advisor how your retirement savings compares with your state’s averages.
Retirement Income Varies Widely By State
The average household retirement income in the United States is $27,617, according to an analysis by Wisevoter of data from the U.S. Census Bureau’s American Community Survey. However, depending on where you live, your local average may be much higher or lower.
When broken down by individual states the averages range from a low of $20,542 in Indiana to a high of $43,080 in the District of Columbia. Retirees in the District of Columbia also bring in significantly more than those in the second-ranked state, Alaska, with $36,023.
The District of Columbia likely stands out in this ranking in part because it is a high-cost urban area. It also has many well-educated high-income earners, including retired government employees with generous government pensions.
In general, Northeast and West Coast states have higher incomes. The Southern and Midwestern states tend to lag behind when it comes to average retirement income.
Here’s a full breakdown of the average retirement income by state:
Average retirement incomes by state can help guide retirement planning. Here are three common ways someone planning for retirement could use these figures:
As a benchmark to evaluate if your savings are on track. Comparing your expected retirement income to the average in your state gives you a sense of how you measure up. This could prompt you to increase retirement contributions if you fall short.
To understand how retirement expenses may differ by location. The wide variation in average incomes shows living costs and taxes vary greatly in retirement depending on where you live. This could influence decisions about where to retire.
To estimate ranges for budgeting purposes. The state averages provide a ballpark estimate of retirement income ranges to consider when planning monthly budgets in retirement. This can help you set savings goals tailored to your state.
Limitations of Planning With Average Retirement Incomes
While averages provide helpful context, your specific circ*mstances likely are more important considerations than how your state compares. Within each state, there may be many outliers who earn much more or less than the average, and you may be at one extreme or the other.
The cost of living, taxes and lifestyle you desire in retirement could also differ greatly from the average in your state. In that case, you would need more than the average income to retire comfortably. The averages give useful perspective. However, your specific retirement readiness depends on your own income, assets, expenses and retirement timeline.
Bottom Line
State averages for retiree income vary widely, likely due to differences in costs, wages, taxes, pensions and other factors. Information about averages can guide savings plans and suggest locations to retire. Every retirement is unique, however. Timing, income, expenses and sources of retirement income all determine retirement income. Two people with the same-sized nest egg but different planned retirement ages or pension benefits could have much different incomes.
Have a financial advisor run projections to estimate your potential retirement income and shortfalls. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you canhave a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s cost of living calculator to see how much you would need to earn to have the same standard of living in another city.
According to the Bureau of Labor Statistics (BLS), the average income of someone 65 and older in 2021 was $55,335, and the average expenses were $52,141, or $4,345 per month.
According to the Bureau of Labor Statistics (BLS), the average income of someone 65 and older in 2021 was $55,335, and the average expenses were $52,141, or $4,345 per month.
As a result, an oft-stated rule of thumb suggests workers can base their retirement on a percentage of their current income. “Seventy to 80% of pre-retirement income is good to shoot for,” said Ben Bakkum, senior investment strategist with New York City financial firm Betterment, in an email.
Everyone isn't going to want to spend $10,000 net a month in retirement. For some people, that will be way more than they need each month. For others, it might not be enough. And there might be some people that spending $10,000 net a month in retirement is just right.
The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful. After all, not everyone who is the same age will retire at the same time.
As of March 2024, the average retirement benefit was $1,864.52 a month, according to the Social Security Administration. The maximum payout for Social Security recipients in 2024 is $4,873 a month, and you can only get that by earning a very high salary over 35 years.
For retired couples who are both receiving benefits, the average monthly income from Social Security is now $2,753. Common advice for couples is to have about 7.5x their yearly income saved for retirement.
Some strategies call for having 10 to 12 times your final working year's salary or specific multiples of your annual income that increase as you age. Consider when you want to retire, goals, annual salary, expected annual raises, inflation, investment portfolio performance and potential healthcare expenses.
While $1,500 might not be enough for non-housing retirement expenses for many people, it doesn't mean it's impossible to stick to this or other amounts, such as if you're already retired and don't have the ability to increase your budget.
The definition of a comfortable retirement differs from person to person and depends on things like the number of holidays you plan to take each year. However, some experts have suggested you could maintain a comfortable lifestyle with a pension income between half and two thirds of your final working salary.
The median income for Americans 65 and older is $50,290. The mean (average) is $75,020. Average annual expenditures for Americans 65 and older are $57,818. The average Social Security retirement benefit check is $1,907 as of January 2024.
1. Iowa. Iowa ranks as the number one state to retire to. It offers an affordable cost of living and home prices and a strong economy, making it an attractive place to make retirement savings last longer.
According to the Missouri Economic Research and Information Center, the lowest overall costs of living were found in Mississippi, Oklahoma, Kansas, Alabama, and West Virginia: Cheapest states to retire.
Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.
So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million.
It all depends on your lifestyle and the strategies you follow. If you have $2 million and want to retire at age 60, it is important to start with your desired lifestyle and how much that lifestyle will cost you. This will help determine the amount of money you should have in your accounts.
Introduction: My name is Dean Jakubowski Ret, I am a enthusiastic, friendly, homely, handsome, zealous, brainy, elegant person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
