What Is a Good Monthly Retirement Income? - Life Settlement Advisors (2024)

FAQs

What is a good monthly income for retirement? ›

65-74 years: $59,872 per year or $4,989 per month. 75 and older: $43,217 per year or $3,601 per month.

First, let's look at some statistics to establish a baseline for what a solid retirement looks like: Average monthly retirement income in 2021 for retirees 65 and older was about $4,000 a month, or $48,000 a year; this is a slight decrease from 2020, when it was about $49,000.

As a general rule, financial advisors often suggest that retirees should aim to replace at least 70% to 80% of their pre-retirement income. This means if you currently make $100,000 per year, you should aim to have $70,000 to $80,000 per year in retirement income.

The 2022 CPS ASEC asked participants to report their household income for 2021. Based on that data, the average retirement income for U.S. adults aged 65 and older is $75,254. However, the median income for that age group is $47,620.

That means that many will need to rely on Social Security payments—which, in 2021, averages $1,544 a month. That's not a lot, but don't worry. There are plenty of places in the United States—and abroad—where you can live comfortably on $1,500 a month or less.

That means that even if you're not one of those lucky few who have $1 million or more socked away, you can still retire well, so long as you keep your monthly budget under $3,000 a month.

People ages 65 and older had an average income of $55,335 in 2021. Average annual expenses for people ages 65 and older totaled $52,141 in 2021. 48% of retirees surveyed reported spending less than $2,000 a month in 2022. 1 in 3 retirees reported spending between $2,000 and $3,999 per month.

With $6,000 a month, you have more money than the average retiree—Americans aged 65 and older generally spend roughly $4,000 a month—and therefore more options on where to live. Below, we list five spectacular places where you might consider spending your golden years.

How much does the average 70-year-old have in savings? Just shy of $500,000, according to the Federal Reserve. The better question, however, may be whether that's enough for a 70-year-old to live on in retirement so that you can align your budget accordingly.

What percentage of retirees have a million dollars? ›

However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.

If your highest 35 years of indexed earnings averaged out to $100,000, your AIME would be roughly $8,333. If you add all three of these numbers together, you would arrive at a PIA of $2,893.11, which equates to about $34,717.32 of Social Security benefits per year at full retirement age.

To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.

The national average for retirement savings varies depending on age, but according to the Economic Policy Institute, the median retirement savings for all working age households in the US is around $95,776. This figure includes both employer-sponsored retirement accounts and individual retirement accounts (IRAs).

MORE LIKE THISInvestingSocial Security. A good monthly retirement income is typically 80% of pre-retirement income; advisors often suggest a range between 70% and a more conservative 90%. Median income for households headed by someone over 65 was $47,620, or $3,968 per month, in 2021 according to the U.S. Census Bureau.

Yes, you can retire at 55 with $500k. According to the 4% rule, if you retire with $500,000 in assets, you should be able to take $20,000/ yr for a 30-year or longer. Additionally, putting the money in an annuity will offer a guaranteed annual income of $24,688 to those retiring at 55.

If you manage to stay healthy and never need long-term care then $600,000 could be enough to sustain you in retirement. On the other hand, if you need long-term care in a nursing facility that could take a large bite out of your savings. Medicare doesn't cover extended nursing home care.

Yes, you can! The average monthly Social Security Income in 2021 is $1,543 per person. In the tables below, we'll use an annuity with a lifetime income rider coupled with SSI to give you a better idea of the income you could receive from $500,000 in savings.

Average Social Security retirement benefits in 2023

Average payments for all retirees enrolled in the Social Security program increased to approximately $1,827, according to the Social Security Administration (SSA).

According to the Social Security Administration (SSA), the average monthly retirement benefit for Security Security recipients is $1,781.63 as of February. Several factors can drag that average up or down, but you have the most control over the biggest variable of all — the age that you decide to cash in.

Which is the biggest expense for most retirees? ›

Housing. Housing expenses—which include mortgage, rent, property tax, insurance, maintenance and repair costs—remained the largest expense for retirees.

Housing—which includes mortgage, rent, property tax, insurance, maintenance and repair costs—is the largest expense for retirees. More specifically, the average retiree household pays an average of $17,472 per year ($1,456 per month) on housing expenses, representing almost 35% of annual expenditures.

Common expenses in retirement include housing, health care, transportation, food, and entertainment. Of course, where you spend — and how much you spend in each category — will vary from retiree to retiree.

Social Security benefits may or may not be taxed after 62, depending in large part on other income earned. Those only receiving Social Security benefits do not have to pay federal income taxes.

The quick answer is “yes”! With some planning, you can retire at 60 with $500k. Remember, however, that your lifestyle will significantly affect how long your savings will last.

If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement. So, if you retire at 60, the money should ideally last through age 90. If 4% sounds too low to you, remember that you'll take an income that increases with inflation.

More than one quarter of Americans have no money saved for retirement, according to a new survey. Almost one in five people age 59 and older said they didn't have a retirement account, which compared to a quarter of Generation X respondents.

In most cases, you will have to wait until age 66 and four months to collect enough Social Security for a stable retirement. If you want to retire early, you will have to find a way to replace your income during that six-year period. In most cases $300,000 is simply not enough money on which to retire early.

1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.

Is $500000 enough to retire on at 70? ›

The bottom line is that you can retire at 70 with $500k if you are comfortable with the resulting lifestyle. Your savings will provide you with approximately $20k per year, and the average Social Security benefit will add another $18k or so.

According to SSA data, as of December 2021, the most recent year for which the information is available, the average Social Security benefit at age 70 was $1,768.94.

You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.

Nearly Three-Quarters of Retired Americans Have Non-Mortgage Debt. Because so many retirees have little to no savings, it's not too surprising that the majority are carrying debt. The most common types of debt held by retirees are credit card debt (49%), mortgages (24%), car payments (20%) and medical bills (18%).

The majority of retirees are not millionaires but it's possible to reach $1 million in savings if you're strategic in your approach. Getting an early start can be one of the best ways to reach your goal, as you'll have more time to benefit from compounding interest.

You must have worked and paid Social Security taxes in five of the last 10 years. If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.

What is the maximum Social Security benefit? In 2023, the maximum amount someone can receive in Social Security retirement benefits is $3,627 per month if they retire at 67. Someone who starts collecting benefits at age 62 can receive a maximum of $2,572 per month.

In 2023, the average senior on Social Security collects $1,827 a month. But you may be eligible for a lot more money than that. In fact, some seniors this year are looking at a monthly benefit of $4,555, which is the maximum Social Security will pay. Here's how to score a benefit that high.

The $18,984 Social Security bonus most retirees completely overlook: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

Social Security recipients will get an 8.7% raise for 2023, compared with the 5.9% increase that beneficiaries received in 2022. Maximum earnings subject to the Social Security tax also went up, from $147,000 to $160,200.

Does money in the bank affect Social Security retirement benefits? ›

Social Security does not count pension payments, annuities, or the interest or dividends from your savings and investments as earnings. They do not lower your Social Security retirement benefits.

This question is problematic because it depends on many things, such as your pre-retirement annual income, expenses, and retirement goals. However, in general, $150,000 is a good retirement income. This will allow you to cover most of your living expenses and leave some money for leisure activities and travel.

In terms of median values, the 2019 figure of $5,300 is 10.65% higher than the 2016 median balance of $4,790. Transaction accounts provide account owners with immediate access to cash. They include savings, checking, money market, prepaid debit cards and call accounts.

If you have a low living cost and can supplement your income with a part-time job or a generous pension, then retiring on $3,000 a month is certainly possible.

If you start saving $1000 a month at age 20 will grow to $1.6 million when you retire in 47 years. For people starting saving at that age, the monthly payments add up to $560,000: the early start combined with the estimated 4% over the years means that their investments skyrocketed nearly $1.

In fact, if you sock away $400 a month over a 43-year period, and your invested savings generate an average annual 10.5% return, then you'll end up with $3.3 million. And that should be enough money to enjoy retirement to the fullest.

If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement. So, if you retire at 60, the money should ideally last through age 90. If 4% sounds too low to you, remember that you'll take an income that increases with inflation.

With some planning, you can retire at 60 with $500k. Remember, however, that your lifestyle will significantly affect how long your savings will last. If you're content to live modestly and don't plan on significant life changes (like travel or starting a business), you can make your $500k last much longer.

In fact, statistically, around 10% of retirees have $1 million or more in savings.

Can I live off interest on a million dollars? ›

Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.

Median retirement income for seniors is around $24,000; however, average income can be much higher. On average, seniors earn between $2000 and $6000 per month. Older retirees tend to earn less than younger retirees. It's recommended that you save enough to replace 70% of your pre-retirement monthly income.