Average retirement income research summary. The average retirement income in the US has changed over time, and it’s important that current and future retirees know all of the latest retirement income trends. If you want to know more about the average retirement income, we’ve gathered all of the latest insights. According to our research:
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US adults 65+ have an average retirement income of $75,254.
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The median retirement income for those 65+ is only $47,620.
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The average monthly social security benefit is $1,827 in 2023.
For further analysis, we broke down the data in the following ways: Income and Spending by Age | By State
Sources of Retirement Income
Retirement income can come from different sources, the most common of which is social security. To dive deeper into the different sources of retirement income, here are some insightful statistics:
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Social Security makes up 33% of the average retiree’s income.
Social security typically only covers around 37% of a retiree’s previous income before retiring. For the most part, 67% of a retiree’s income actually comes from savings and pensions.
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40.2% of those over 60 receive their entire income from social security only.
There is a surprising lack of retirees utilizing savings and pensions after they retire. For instance, only 27.3% of retirees have a defined benefit, while only 33.8% have a defined contribution.
Sources of retirement income for retirees
| Sources of retirement income | Share of retirees |
|---|---|
| SS only | 40.2% |
| Defined benefit and SS | 15.4% |
| Defined contribution and SS | 15.1% |
| No defined benefit, defined contribution and SS | 14.9% |
| Defined benefit, defined contribution, and SS | 6.8% |
| Defined benefit only | 3.8% |
| Defined contribution only | 2.5% |
| Defined benefit and defined contribution | 1.3% |
Retirement Income and Spending by Age
Retirement age can make a big difference in how affordable retirement income and spending is for retirees. Retiring older can make savings go a lot farther, but it certainly isn’t the first choice for future retirees. Consider these facts:
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50.3% of all Americans 55+ are retired.
More Americans 55+ are retired now than in 2019; however, the vast majority of retirees are older. For example, only 11% of people 55-59 are retired in 2022, compared to 19% in 2007. On the other hand, 88% of those 75+ are retired.
Share of Americans who are retired by age
Age range Share of Americans who are retired 40-44 1% 45-49 2% 50-54 6% 55-59 11% 60-64 32% 65-69 70% 70-74 83% 75+ 88% -
The median income of retirees 65+ is just under 25% higher than those 75+.
The median retirement income for those 65+ is $47,620, while the median retirement income for those 75+ is only $38,239. This same trend follows for average income as well.
Average and median retirement income per year
Age range Median retirement income Average retirement income 65+ $47,620 $75,254 65-74 $55,747 $84,975 75+ $38,239 $61,547 -
The average annual spending for retirees 65+ is $52,141.
Divided into age group, younger retirees tend to spend more than older ones. For instance, retirees 55-64 spend an average of $66,133 annually, while retirees 75+ only spend $44,094.
Average retiree spending by age
Age range Average annual spending Under 55 $70,172 55-64 $66,133 65-74 $52,968 75+ $44,094
Retirement Income by State
Retirement income can also vary a lot by state, as each state has different laws and different costs of living. Here are the average retirement incomes for each state outlined:
Average retirement income by state
| State | Average retirement income | Share of households with retirement income |
|---|---|---|
| Alabama | $24,896 | 54.3% |
| Alaska | $36,023 | 61.4% |
| Arizona | $28,725 | 59.6% |
| Arkansas | $21,967 | 51.5% |
| California | $34,737 | 52.9% |
| Colorado | $32,379 | 58.9% |
| Connecticut | $32,052 | 62.0% |
| Delaware | $31,283 | 68.1% |
| Florida | $30,158 | 54.4% |
| Georgia | $27,961 | 54.3% |
| Hawaii | $32,294 | 61.1% |
| Idaho | $24,752 | 59.5% |
| Illinois | $31,223 | 58.9% |
| Indiana | $20,542 | 62.6% |
| Iowa | $22,308 | 59.5% |
| Kansas | $23,294 | 57.5% |
| Kentucky | $24,419 | 57.1% |
| Louisiana | $26,512 | 50.9% |
| Maine | $25,545 | 56.0% |
| Maryland | $35,732 | 64.1% |
| Massachusetts | $31,198 | 54.6% |
| Michigan | $24.389 | 65.7% |
| Minnesota | $26,385 | 63.0% |
| Mississippi | $23,347 | 49.8% |
| Missouri | $24,125 | 59.7% |
| Montana | $25,463 | 54.4% |
| Nebraska | $23,821 | 52.8% |
| Nevada | $31,171 | 59.3% |
| New Hampshire | $26,395 | 59.3% |
| New Jersey | $30,660 | 58.3% |
| New Mexico | $29,707 | 54.5% |
| New York | $30,326 | 57.8% |
| North Carolina | $25,324 | 56.3% |
| North Dakota | $23,347 | 50.5% |
| Ohio | $26,316 | 62.3% |
| Oklahoma | $23,963 | 51.8% |
| Oregon | $28,565 | 59.5% |
| Pennsylvania | $24,392 | 62.6% |
| Rhode Island | $27,118 | 58.6% |
| South Carolina | $26,227 | 57.6% |
| South Dakota | $24,020 | 49.8% |
| Tennessee | $23,715 | 54.8% |
| Texas | $27,471 | 49.9% |
| Utah | $28,632 | 61.8% |
| Vermont | $24,870 | 57.5% |
| Virginia | $35,306 | 62.3% |
| Washington | $29,351 | 62.0% |
| West Virginia | $21,118 | 60.2% |
| Wisconsin | $25,378 | 64.2% |
| Wyoming | $26,465 | 60.0% |
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Alaska has the highest average retirement income of $36,023.
Alaska has the highest average retirement income when compared to any other state, with others among the top 5 including Maryland ($35,732), Virginia ($35,306), California ($34,737), and Colorado ($32,379).
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Indiana has the lowest average retirement income of $20,542.
Indiana has the lowest average retirement income when compared to any other state, with others among the bottom 5 including West Virginia ($21,118), Arkansas ($21,967), Iowa ($22,308), and Kansas ($23,294).
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Delaware is the state where the largest share of households over 65 have a retirement income (68.1%).
Other states where over 63% of households 65+ have a retirement income include Michigan (65.7%), Wisconsin (64.2%), Maryland (64.1%), and Minnesota (63.0%).
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South Dakota and Mississippi have the smallest share of households over 65 who have a retirement income, both at 49.8%.
The only other state where less than 50% of households over 65 receive a retirement income is Texas.
Retirement Income FAQ
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What is the average retirement income for a single person?
The average monthly retirement income for a single person is $4,381 in 2023. That equates to roughly $52,572 per year. As far as Social Security, though, the average monthly Social Security income is only $1,827, or just under $22,000 per year.
This means that, in general, the average retiree receives more than half their income from sources outside of SS.
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What is a good monthly retirement income?
A good monthly retirement income for a single person is at least $3,500 or more. In comparison, a good retirement income for a couple is at least $5,000 or more per month. Retirees should generally aspire to have a monthly income of at least 70% of their pre-retirement income.
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Is retirement income taxable?
Retirement income is fully or partially taxable, depending on the state. For example, California exempts Social Security from taxation, but has very high taxes for other sources of retirement income.
On the federal level, retirees owe federal income tax at a regular rate over time when receiving money from pension annuities and periodic payments.
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What are the states that do not tax retirement income?
There are 13 states that do not tax retirement income. Most of these states (9 total) have no income tax, but the other 4 have made specific exemptions for retirement income. Here are the states:
States with no tax on retirement income
State No income tax/retirement income exemption Alaska No income tax Florida No income tax Illinois Retirement income exemption Iowa Retirement income exemption Mississippi Retirement income exemption Nevada No income tax Pennsylvania Retirement income exemption South Dakota No income tax Tennessee No income tax Texas No income tax Washington No income tax Wyoming No income tax -
What types of income can you use in retirement to support yourself?
There are many types of income that can support you in retirement, the most common of which is Social Security. The U.S. Treasury Department provides Social Security, and it’s fairly easy to apply for. However, if you’re interested in other forms of retirement income as well, here are some noteworthy options:
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Pension plans
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IRAs
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Qualified employer-sponsored retirement plans (QRP) such as (i.e. 401(k)
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Brokerage accounts
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Savings accounts
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Certificates of deposit (CDs)
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Conclusion
Retirement income is on the minds of anyone currently retired, or looking to retire in the future. The average retirement income in 2023 is $75,254, while the median income is only $47,620. While a large chunk of this does come from Social Security, the average SS payout of only $22,000 per year means that most retirees are pulling income from other sources.
While this might be nerve-wracking news for gig workers, part-timers, and others without much money put away, it’s never too late to start saving. The more you can save now, the more income you’ll have for retirement in the future, regardless of whether you choose to live in a high or low-payout state.
References
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CNBC – Here’s where most Americans are really getting their retirement income
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CBPP – Top Ten Facts About Social Security
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Gallup – More in U.S. Retiring, or Planning to Retire, Later
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Pew Research Center – Amid the pandemic, a rising share of older U.S. adults are now retired
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Annuity – Average Retirement Income: What Is a Good Income for Retirees?
Author
Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.
