what is the average retirement income it's well known that many people are behind when it comes to saving for retirement with many people needing to work well past the traditional retirement age just to make ends meet this struggle forces some to rely on family friends or government assistance to stay afloat the idea of a comfortable and carefree retirement seems increasingly Out Of Reach for many in this video we'll take a look at the average retirement income as well as some other eye-opening information my name is Chris and I help teach people about money personal finance
and investing if you're interested in improving your financial future make sure to subscribe to the channel and hit the like button if this video is helpful even though retirement savings are higher than they've been since 2022 many seniors still rely heavily on social security for most of their income the Social Security Administration says that 12% of men in 15% of women age 65 and older depend on the program for 90% or more of their income this shows that for many retirees Social Security isn't just a small supplement but a major part of their financial support
this heavy Reliance can come from not having enough personal savings or Investments High health care costs or the need to support family members originally designed to supplement retirement income rather than serve as the primary source Social Security is increasingly becoming essential for many older adults without this income where would these people be they might be struggling physically to continue working well into retirement age relying on friends or family for a place to stay or living on the dime of their kids until their eventual expiration the median monthly income for us adults aged 65 and older
is $4,199 per month or just over $50,000 per year according to the mly fool although not everyone 65 and older is retired some might still be working so these figures should be taken with a grain of salt since most data sources do not disting between retirees and non- retirees when providing information about reported income based on age there's a little bit of a gray area 2third of Americans are aiming for a phase retirement in which they'll work full-time part-time and retire fully at some point according to a 2024 survey from Fidelity between 2016 and 2022
70% of Americans 65 to 69 were retired 83% of those 70 to 74 were retired in 88% of Americans 75 and older were retired according to Gallup few Americans are retiring earlier than age 65 among those 60 to 64 32% were retired between 2016 and 2022 just 11% of those 55 to 59 were retired and only 6% of Americans 50 to 54 were retired average retirement income varies a lot across the US with some states seeing retirees earning over twice as much as those and others this happens for several reasons like differences in local wages
and salaries cost of living and tax rules in states with higher wages people generally save more for retirement out of necessity leading to higher incomes in their later years the cost of living is another big factor retirees in cheaper States might need less money to get by while those in more expensive areas need more money to buy simple needs like groceries tax policies also differ with some states giving retirees better tax breaks which can make a big difference in their net income pension plans are more common in some states than others and where they're prevalent
retirees often have a significant boost to their income plus factors like access to Affordable Health Care and Social Services can affect how financially comfortable these retirees feel all these factors combined to create a wide range of retirement incomes across the country in 2022 Americans age 65 and older spent an average of 57,8 $18 according to the Bureau of Labor Statistics and if you're paying attention you'll see that this figure is above the median income for this age group the average spending for those age 65 plus is about $20,000 less than what people younger than 65
spent that year the lower spending can be attributed to several factors such as having a fixed retirement income different spending habits or fewer work-related expenses as people become older they're generally not spending as much on cars or Transportation related at ated expenses and they don't drive as far or as frequently and they often share a vehicle with their spouse additionally as people age housing cost often decrease many older adults have paid off their mortgage having a smaller remaining balance or of downsize to a more affordable home overall retirees tend to spend less due to their
income level and the changes in their expenses after they retire the decrease in average spending is also affected by the fact that people are no longer putting money into their retirement accounts the Med net worth of households where the average head of household is between 65 and 74 years old is approximately $410,000 for those aged 75 and older the media net worth is about $335,000 on the surface these figures might seem relatively comfortable however it's important to consider that these amounts include the value of one's home when you subtract the value of their home the
net worth figures can look quite different for many retirees their home represents a significant portion of their assets and once it's accounted for their liquid or accessible savings and Investments might be considerably lower this means that the financial cushion they have to cover day-to-day expenses health care and other retirement costs might be much thinner than these numbers initially suggest at the start of 2024 the average monthly social security check is $1,977 which adds up to $ 22,88200 married couples receive roughly double that totaling over $3,800 per month or $46,000 per year although this amount isn't
terrible it often isn't enough to cover all expenses leading many older adults to rely on additional income sources those who plan well might have sufficient savings but others may not have had such successful strategies according to smartasset.com around 60% of individuals over the age of 65 carry some form of debt including credit card balance mortgages car loans and more while not all debt is considered detrimental some like money owed on cash flow positive Investments can be considered good debt many retirees have also borrowed against their homes when mortgage rates were around 3% nonetheless debt can
be a significant burden during retirement due to the typically fixed and limited income that retirees have managing debt in this phase of Life can drastically increase the amount of monthly income needed to maintain a comfortable standard of living the main issue isn't just the number of retirees with debt but rather that most of the recent increase in debt is among high-risk households these are households that have significant amounts of unsecured debt or high levels of borrowing compared to their assets inflation is really hitting retirees hard making it tougher for them to get by is prices
for everyday things like groceries Health Care and housing go up the fixed incomes many retirees rely on like Social Security and pensions don't stretch as far as they used to this means that even though they might get the same amount of money each month its value is shrinking because it buys less and less with costs Rising faster than their income many older adults have to cut back on Essentials or use their savings faster than they planned this financial squeeze from inflation makes it harder for retirees to maintain their standard of living and adds extra stress
to their retirement years most people don't put that much effort into planning for a comfortable retirement they often ignore the need to plan ahead and miss out on chances to grow their savings this might be because they never learned how crucial investing is they've always delayed it or they were counting on some other plan to take care of them in the future luckily if you're watching this you've got a great shot at beating the average retirement numbers retiring early and pulling in more income than many others the trick is to start planning and investing as
early as you can by getting started now and using Financial tools wisely you can build up a nice retirement fund and set yourself up for a comfortable and secure future your early efforts can make a big difference helping you retire on your terms without worrying about your basic needs
