IF you ask a room full of financial advisors what a “good” monthly income in retirement looks like, you’ll get a dozen different arguments, not answers.
There’s no magic number because one guy is paying a mortgage in Boston and another guy owns his place free and clear in Arkansas. But if we’re talking real numbers that actual retirees are living on, the Census data gives us a floor to stand on.
Retirement Income Numbers: What to Know
Right now, the median retirement income for Americans 65 and older is right around $58,680 a year. That shakes out to roughly $4,890 a month. I always hesitate with that number because “median” just means half the people are above it and half are below. The average is a lot higher—north of $89,000—but that’s skewed by the top few percent who retired with seven-figure portfolios.
Most people are living closer to the median, and here’s the part that makes me nervous: the average retiree household spends about $61,432 a year. Do the quick math. That’s a shortfall of nearly three grand every single year. It’s a slow bleed that explains why so many people who swore they were done working at 65 are back at the hardware store part-time by 70.
Social Security Alone Won’t Cut It
Social Security is the spine of this whole thing, but I think people mentally inflate what it actually pays. The average check right now is $2,071 a month. That’s just under $25k a year. If you’re a couple both drawing, you’re looking at about $3,200 combined.
It keeps the lights on and groceries in the fridge, but it’s not funding a cruise around the Greek islands. You’ll hear planners call it the “foundation.” I call it the floor. And the timing of when you start taking it is probably the biggest lever you can still pull.
Grab it at 62 because you’re worried about the program running dry, and you lock in a permanent haircut. Wait until 70, and you get an 8% raise for every year you held off. A benefit that’s $2,500 at 67 becomes $1,750 at 62 or $3,100 at 70. Over twenty years, that’s a six-figure mistake if you jump the gun without a good reason.
The 30% “Raise” You Get Just By Moving South
Planners will tell you to aim for replacing 70-80% of what you made while working. So if you were pulling down $100k, you need about $6k a month to not feel the pinch.
But honestly, the zip code is a bigger factor than the paycheck ever was. I’ve seen folks move from New Jersey to the Carolinas and effectively give themselves a 30% “raise” overnight just by lowering the cost of real estate and ditching state income taxes on their retirement withdrawals. Where you wake up is half the equation.
The other half—and this is the one that keeps me up for my clients—is health. It’s the landmine buried in every perfect retirement spreadsheet. Fidelity’s latest estimate says an individual retiree needs about $172,500 just for medical stuff over the course of retirement.
For a Couple, Double It
Medicare covers a lot, sure, but Part B premiums are creeping up faster than inflation. By the time you’re 85, you’re not just paying for the occasional co-pay.
You’re looking at annual healthcare costs that could easily hit $50k or more if you need help at home or, god forbid, a nursing facility. Long-term care is a separate disaster waiting to happen, and hardly anyone has insurance for it.
When You Boil It All Down, What Does “Good” Actually Look Like in Dollars?
For a single person in a medium-cost city who has the house paid off and isn’t carrying credit card debt, $4,500 to $5,500 a month usually means you can breathe. You can replace the car when it dies and you can take a trip every now and then. For a couple, you really want to be north of $6,500 to feel safe, and $8,500 is where things get comfortable.
The number that looks great at 68 can look threadbare by 82. Inflation doesn’t retire just because you did. The folks I see doing it right aren’t always the ones with the biggest 401(k) balance. They’re the ones who were honest about what they actually spend on dental work, roof repairs, and the grandkids.