Retirement income statistics: what is the average retirement income in the US?

Highlights 

What is the average retirement income by state? 

According to a study by Northwestern Mutual, the financial services company, Americans believe they’ll need $1.46 million to retire comfortably.

The average retirement income varies by state, with Washington, New York, and Maryland having the highest average income.

At the other end, Louisiana, Georgia, and North Dakota have the lowest average income.

Let’s take a look at each state’s average income:  

Where does the majority of retirees' retirement income come from? 

Retirement income can come from different sources, including:
Social Security

According to Statista, over two-thirds of Americans expect their main source of retirement income to come from retirement plans, such as 401(k), 403(b), or IRAs.

Social Security is also high on the list, with two-thirds also mentioning the monthly benefit check as a significant component of their income.

Social Security benefits play a major role in how most US seniors are able to retire. In order to qualify for these benefits, citizens must earn a minimum of 40 Social Security credits, which can be earned by working and paying Social Security taxes on time.  

51% of Americans aged 71 and older expect to cover their retirement expenses with their personal savings.  

Pension vs. 401(k): what is the breakdown?

As mentioned, people use a multitude of accounts to save for retirement.

According to the Federal Reserve’s latest figures, as of 2023, 67% of US adults had assets that were specifically designated for producing income in retirement.

Of these people, 60% of adults had tax-preferred retirement accounts, such as a 401(k) plan, traditional IRA, or Roth IRA.

29% of people had a defined benefit pension through their employer.

What is the average Social Security retirement benefit? 

According to the Social Security Administration, or SSA, the monthly average retirement benefit is currently $1,783.55 in 2024.

Currently, over 72 million Americans receive a monthly benefits check, with the average breakdown as follows:

Each year, the amount of the cost of living adjustment (COLA) is announced to help recipients manage rising costs due to inflation.

In 2025, benefits will increase by 2.5%. This is the smallest COLA since 2021.

There is a limit to what you can receive in relation to Social Security retirement benefits, depending on the age at which you start to receive them.  

In 2004, the average Social Security retirement benefit was $417; in 2014, this increased to $529.

Every decade for the past three decades, the average Social Security retirement benefit has had to increase significantly due to inflation.  

Will my retirement income be enough? 

As mentioned, Northwestern Mutual put a figure of $1.45 million into a comfortable retirement.

A Schwarb participant study put this even higher, stating that the average American with a 401(k) thinks they’ll need $1.7 million to retire and half thought they would be able to reach this goal.  

However, most people aren’t investing enough to reach this retirement income goal.  

There are also multiple questions to consider when considering your future retirement income, including:  

The answer to these differ from person to person, depending on their lifestyle, dependants, and circumstances.   

A study by the Peter G. Peterson Foundation states that “labor economists attribute the increasing retirement age to a variety of factors such as improved health, changing pension and Social Security incentives, new anti-discrimination laws, evolving social norms, and new health insurance features and costs.” 

Based on the changing financial trends, overall inflation, and US retirement income statistics, seniors approaching retirement are now being prompted to cultivate more robust personal savings plans and make more diverse investments. This allows them to supplement the rising costs of living and ensure their retirement income planning will enable them to relax and remain comfortable in their senior years.  

Get expert financial advice 

To be fully prepared for a comfortable retirement, seniors may need to rely on personal savings, government pensions, and Social Security benefits, the latter of which tends to change in relation to rising inflation rates.  

If you want to learn more about retirement planning and managing your financial affairs as you prepare to leave the workforce, Unbiased will match you with an expert financial advisor. 

Find a financial advisor now.