What is a good retirement income?
At age 30, some financial professionals suggest accumulating the equivalent of your current annual income. By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10-12 times your income at that time to be reasonably confident that you'll have enough funds.
After analyzing many scenarios, we found that 75% is a good starting point to consider for your income replacement rate. This means that if you make $100,000 shortly before retirement, you can start to plan using the ballpark expectation that you'll need about $75,000 a year to live on in retirement.
Some experts say to have at least eight to 10 times your annual salary available to you once you enter retirement. Others say you need at least 65% to 80% of your pre-retirement income available to you each year.
As of 2022, the median household income in the U.S. was $74,580, according to the U.S. Census Bureau. Assuming a middle-class retiree earned this salary and retired at age 65 — specifically 65 and 11 months — their Social Security benefit would be $1,867 per month.
In a world in which the average monthly Social Security benefit is just over $1,792, it may seem like a pipe dream to live off $10,000 per month in retirement. But the truth is that with some preparation, dedication and resolve, many Americans can reach this impressive level of retirement income.
Estimate Your Income
Following the conservative rule of thumb and withdrawing 4% a year will provide this couple with another $1,500 monthly or $18,000 a year. Combining these two sources of income gives this average couple a total of $5,100 per month or $61,200 in retirement income per year.
Safe Withdrawal Rate
Using our portfolio of $400,000 and the 4% withdrawal rate, you could withdraw $16,000 annually from your retirement accounts and expect your money to last for at least 30 years. If, say, your Social Security checks are $2,000 monthly, you'd have a combined annual income in retirement of $40,000.
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
| State | Average Retirement Income |
|---|---|
| California | $34,737 |
| Colorado | $32,379 |
| Connecticut | $32,052 |
| Delaware | $31,283 |
What is the average Social Security check at 62?
62 Years Old
If people born after 1960 claim their benefits the month they turn 62, they'll get only 70% of what they would have received had they waited until the full retirement age of 67. The average monthly payment of $1,782 drops by 30% during the first month of eligibility to $1,247.40.
2022. Meanwhile, the average Social Security check for the 2.27 million retired workers at age 66 is $1,719.85. Lastly, the close to 2.96 million retired-worker beneficiaries who were 70 years old in Dec. 2022 were bringing home $1,963.48.
Top the amount with 401(k) savings, living on $3,000 a month after taxes is possible for a retiree. For those who only have social security benefits to rely on, there are many places where they can retire on their checks both in the USA and around the world.
With $800,000 in savings, you can probably cover $4,000 in monthly living costs. However, retirement accounts alone cannot safely sustain that spending for a 25- or 30-year retirement.
According to Maslyk, living comfortably on less than $2,000 per month during retirement is challenging. He emphasizes that even with a paid-off house, essential monthly costs can amount to about $1,200 per month. This includes expenses like utilities, internet, insurance, property taxes, maintenance and improvements.
You can retire comfortably on $3,000 a month in retirement income by choosing to retire in a place with a cost of living that matches your financial resources. Housing cost is the key factor since it's both the largest component of retiree budgets and the household cost that varies most according to geography.
$50,000 per year is considered a moderate income in the United States, and many individuals and families manage to live comfortably on this income.
Plan to maintain your standard of living
To accomplish this, financial experts say you'll need between 70-80% of your pre-retirement income. So, for example, a couple earning $60,000 per year would need between $42,000 ($60,000 x . 70) and $48,000 ($60,000 x . 80) each year during retirement.
Key takeaways: Most people in the U.S. retire with less than $1 million. $500,000 is a healthy nest egg to supplement Social Security and other income sources. Assuming a 4% withdrawal rate, $500,000 could provide $20,000/year of inflation-adjusted income.
Summary. $300,000 can last for roughly 26 years if your average monthly spend is around $1,600. Social Security benefits help bolster your retirement income and make retiring on $300k even more accessible. It's often recommended to have 10-12 times your current income in savings by the time you retire.
What is the magic number to retire?
“If you plan to live at least 25 years past retirement,” Paiva said, “you need at minimum 25 times your income in your retirement savings account.” That means $1.25 million off a $50,000 salary. Early retirement means you would need even more — at age 50, perhaps $1.75 million.
Social Security can potentially be subject to tax regardless of your age. While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
In 2024, the maximum Social Security benefit is $4,873 per month. Getting that much, however, depends on several factors, including how many years you worked, your level of income during your working years and age you choose to begin collecting benefits.
Yes, $800k provides a healthy nest egg that allows for annual withdrawals of around $32,000 from the age of 60 to 85, spanning 25 years. If $32,000 per year, or $2,667 per month, is sufficient to cover your retirement lifestyle, then $800k gives you an adequate buffer.
