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Average Retirement Income: It’s Grim, But You Can Beat It

Average Retirement Income: It’s Grim, but You Can Beat It

I’m living so far beyond my income that we may almost be said to be living apart. — E. E. Cummings

You can’t live beyond your income for very long without getting into trouble. It’s natural to look around at our neighbors and compare ourselves to them: Are we doing as well or better than they are? We can have the same questions in retirement, wondering how much retirement income our peers are receiving.

Older woman looking intrigued, peering over her glasses
Image source: Getty Images.

It’s helpful to know what average retirement incomes are, but the information has its limits, because each of us is in a different situation, with different needs. Let’s take a look at average retirement income, what income you are likely to need in retirement, and how you might generate additional dollars in your later years.

Average retirement income

First off, know that average income might not be the number you really want to know. Imagine, for example, five people, with incomes of $15,000, $20,000, $25,000, $30,000, and $100,000. Their average income (which can also be referred to as their “mean” income), is $38,000. But clearly, fully four of them earn considerably less than that, making it not a very representative number. In this case, the median income might be more helpful. That’s the middle number, when you list the five in ascending or descending order: $25,000.

According to recent government data, below are the average and median incomes for households of different ages:

Head of Household

Average Annual Income

Median Annual Income

All ages

$94,379

$72,165

Ages 65 to 69

$92,436

$71,249

Ages 70 to 74

$78,376

$59,518

Ages 75 and older

$62,891

$46,432

Source: U.S. Census Bureau, Current Population Survey, 2016 Annual Social and Economic Supplement.

Not surprisingly, the fact that a relatively small number of people have high incomes gives the chart higher averages than medians. Thus, more households aged 75 and older are living with incomes near $46,000 than ones near $63,000. Another thing to notice is how incomes tend to fall over time. That can make it difficult for those living on these fixed sums. Some costs in retirement do fall over time — you might travel less and go out to eat less as you enter your 80s, for example — but other costs, such as healthcare expenses, can rise.

A Social Security card nestled among dollar bills
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