Among the various transitions in life, retirement is perhaps one of the most anticipated and anxiety-provoking. On one hand, it represents freedom from the daily grind, letting you spend your time as you like. But there are also significant financial considerations, including whether your savings and income will be enough to support the lifestyle you want.

In the U.S., the average retirement age is 62, but inflation and rising healthcare costs often keep many working longer. Whether you’re already retired, approaching the end of your career, or decades away from leaving the workforce, understanding the average retirement income can help you better prepare for the future.

Explore what retirees typically earn and how savings and income sources compare across different groups so you can get a clearer idea of what your retirement finances may look like.

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Understanding average retirement income

The first step in planning for retirement is understanding what the average income in retirement looks like. This provides a benchmark to help you better assess your own financial health and budget. From there, you can identify potential gaps, make adjustments, and take proactive steps toward greater stability, such as consulting a financial advisor or diversifying your income sources.

When looking at average retirement incomes, it's important to distinguish between the mean and the median: 

• Mean income: This is what most people think of as the “average.” It’s determined by adding up all retiree incomes and dividing the total by the number of retirees. However, it can be skewed upward by very high earners.
• Median income: This represents the middle value of the distribution — half of retirees earn more, half earn less. Because it avoids distortion from outliers, the median often gives a clearer picture of what a typical retiree earns.

Considering both figures can give you a more balanced view of retirement income, making it easier to gauge your financial health and refine your retirement investment strategy accordingly.

What's the average retirement income?

The average retirement income in the U.S. for 2025 varies depending on the source of data. According to the U.S. Census Bureau, the median annual income for Americans 65 and older is $54,710, while the mean income is $83,950, which means half of retirees earn less than this amount. The disparity between these figures underscores how a small number of high earners can skew the mean upward, making the median a more practical benchmark for most individuals. 

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What's a good monthly retirement income? 

What a “good” retirement income is for you depends on factors like lifestyle, location, and expected expenses. Financial experts generally recommend replacing 70–80% of pre-retirement income to maintain financial security. This guideline can help enable you to cover essentials like housing, healthcare, and groceries, while still leaving room for discretionary spending, such as travel or hobbies. Planning with this replacement rate in mind gives you a target to save toward and lets you evaluate whether your income sources will be sufficient. 

Keep in mind, though, that the exact figure will vary depending on your lifestyle choices. If you plan to live modestly, your finances may lean toward the lower end of the range, while those who want to pursue a more active retirement or continue supporting dependents will likely aim for a higher replacement rate. 

What is a good monthly retirement income for a couple?

For couples, financial advisors typically recommend aiming for 75–85% of their combined pre-retirement income. For example, suppose a couple earned $8,000 per month before retiring. In that case, they should aim for $6,000–6,800 monthly in retirement to maintain their lifestyle without needing to deplete principal investments too quickly.

The target is slightly higher than the recommendation for individuals because many costs naturally rise with two people. Couples also need to account for longer retirement horizons, since one partner may outlive the other, extending the period their income must cover. 

Reliable income streams are vital in achieving security. Beyond Social Security and pensions, Gainbridge annuities can help couples create guaranteed monthly payouts, offering protection against market volatility and inflation while ensuring predictable cash flow.

Average monthly retirement income by state

While it’s advisable for individuals to replace 70–80% of their pre-retirement income, the actual amount needed can vary widely depending on where you live. Factors such as cost of living, state taxes, and local economies play a crucial role in determining how far your retirement income will stretch. 

When planning for retirement, it’s important to understand how your state may impact your budget. Here’s a breakdown of the average monthly retirement income by state:

Average retirement savings by age

It’s never too early to start saving for retirement — the earlier you begin, the more time your investments can grow. Here are the mean and median retirement savings across age groups:

Top 5 retirement income sources

Adopting a diversified approach to retirement income can help increase your long-term financial security. Relying on multiple sources helps to reduce risk and can help your income withstand inflation, market fluctuations, and unexpected expenses. Here are five primary sources of income for retirees.

1. Pensions

Pensions are retirement plans where employers make contributions to a fund that can pay an employee a fixed, regular benefit after they retire. The average monthly pension payout varies depending on employer, years of service, and salary history. 

2. Social Security

Social Security is the most widely used source of retirement income. The benefit amount is calculated based on your lifetime earnings and the age at which you begin claiming, typically replacing around 40% of pre-retirement income. 

3. Personal investments and financial assets

Individual investment portfolios, including stocks, bonds, and real estate, can provide additional retirement income through dividends and growth. By maintaining a diversified portfolio, retirees can generally withdraw about 3-4% of their portfolio annually, helping keep pace with inflation and reducing the risk of outliving savings.

4. 401(k)s and IRAs retirement accounts

Employer-sponsored 401(k)s and IRAs have largely replaced pensions as the cornerstone of modern retirement planning. Contributions and earnings can grow tax-deferred, allowing savings to compound over time, while withdrawals in retirement can be taxed as ordinary income depending on the source. 

5. Annuities

Annuities are insurance products that can convert a portion of savings into guaranteed income, either for a set period or for life. Fixed annuities, like those offered by Gainbridge, can provide predictable interest and can give retirees a stable income stream beyond Social Security and pensions. 

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Tips to maximize your income in retirement

Maximizing your retirement income takes proactive planning. Consider implementing the following tips.

Buy annuities

Purchasing fixed annuities can create a guaranteed income stream in retirement, shielding you from market fluctuations and helping to manage inflation. For retirees seeking stability, fixed annuities can offer predictable payouts that can supplement other income sources. 

Diversify your income sources

Just as a well-balanced portfolio aims to reduce risk, having multiple streams of retirement income can add financial stability. Combining Social Security benefits, pensions, and personal investments can help ensure you’re not overly reliant on any single source. 

Review your retirement plan regularly

Retirement planning is an ongoing process. Meet with a financial advisor annually (or more frequently) to reassess your strategy, account for market changes or unexpected expenses, and make adjustments to help stay on track with your goals.

Delay claiming Social Security benefits

Postponing Social Security benefits beyond full retirement age can substantially increase your monthly payments, providing higher lifetime income in the case of longer retirements. 

Maximize contributions to retirement accounts

While you’re still working, consider contributing as much as possible to 401(k)s and IRAs. Taking full advantage of employer matches and contribution limits allows your savings to grow tax-deferred and can significantly boost the funds available for retirement. 

How retirement planning is changing

Retirement planning is evolving as people take more control of their financial futures. With greater access to information, Americans are increasingly educating themselves about retirement decisions, rather than relying on traditional advisors. This shift has major implications for retirement planning, as individuals increasingly seek transparent, self-serve, and flexible tools — like those offered by Gainbridge.

Self-directed investors are turning to user-friendly digital platforms to build retirement plans that match their risk tolerance and life goals. Gainbridge supports this approach with commission-free annuities and intuitive digital solutions, enabling individuals to diversify their portfolios and secure guaranteed income without the need for intermediaries.

Main factors influencing retirement income

Several factors shape how much retirement income you need:

• Longevity: Advances in technology and healthcare mean people are living longer. 
• Inflation: Rising costs diminish purchasing power over time.
• Healthcare costs: These tend to rise as you get older.
• Investment returns: The performance of your portfolio has a direct impact on your long-term financial health. 
• Taxes: Taxes can change as you transition from working to retirement.

What financial experts say about retirement planning

Expert guidance is invaluable in navigating retirement planning, as financial advisors can help individuals and couples avoid common pitfalls around inflation and longevity risk. They often recommend fixed annuities for diversification and increased stability, balancing risk with growth potential. Gainbridge combines self-serve digital tools, a transparent fee structure, and access to dedicated specialists, empowering investors to plan for retirement confidently while maintaining ownership over their financial decisions.

Grow your retirement savings with Gainbridge

Gainbridge offers a range of retirement solutions that address key retirement risks, from protecting against inflation to delivering predictable, guaranteed income. Gainbridge annuities give self-directed investors a straightforward way to diversify income sources and help meet their retirement needs.

Explore Gainbridge today and take the first step toward a more secure financial future.

This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. For advice concerning your own situation please contact the appropriate professional. The GainbridgeⓇ digital platform provides informational and educational resources intended only for self-directed purposes. Guarantees are backed by the financial strength and claims-paying ability of the issuer.

FAQ

Is $60,000 a year enough to retire?

The average cost for essentials in retirement is around $60,000, but this amount may fall short in high-cost areas. Whether it’s sufficient depends on your lifestyle, location, and expenses. Planning ahead and adjusting your spending expectations can help ensure a comfortable retirement.

What is the average retirement income at 65?

The mean retirement income for Americans at age 65 is $83,950, while the median income is $54,710. These figures can help you gauge how your income compares to others.

How does retirement income differ by gender?

Due to factors such as wage gaps, longer life expectancies, and differences in lifetime earnings, men average $58,550 annually, while women average $44,370. Being aware of these disparities can help with planning for longevity and income needs in later years. [source]

How can annuities supplement retirement income?

Annuities can provide guaranteed payouts, offering stability against inflation and market risks while also helping bridge gaps in Social Security or pension income. Choosing the right type of annuity, such as fixed, indexed, or variable, can align with your risk tolerance and goals.

Who should you consult for advice tailored to your individual retirement situation?

Certified financial advisors or retirement specialists can provide personalized guidance to help you plan effectively for retirement. They can assess risks and income needs, and highlight strategies that fit your lifestyle. Consulting an expert early in the process can make a significant difference in creating retirement stability.