Retirement planning can be a daunting task, especially now that fewer employers offer pensions to help fund their golden years. If you're married or engaged to a partner, planning for the future can result in twice as much stress. You may be wondering what the average retirement income is for couples and how much money you need to retire. The amount you need as a couple depends on your individual requirements. Knowing the average retirement income in the United States can help you compare it to the national average and give you an idea of how much money you'll need to retire.
These numbers can also provide a reference point when planning this stage of life. To get a better understanding of what a good retirement income looks like for you, start by determining your answers to the points below. The median and average numbers weigh differently when considering which is most relevant to retirement planning. The median number refers to the number located exactly in the center of a set. For example, if you found the median income of 13 retirees, you would organize the values from lowest to highest.
Any number that falls into seventh place is the median retirement income within this group of retirees. Since high incomes tend to increase the average, median retirement income may be a better reference point. Statistically speaking, your income slowly decreases as you age, as shown in the table above. This is due to several factors, one of which is that most people don't earn money during this period, but instead spend their life savings. Another predominant factor in declining retirement income is the long list of retirement risks that are not taken into account when planning this stage of life.
This includes taking into account longer life expectancy, health care costs, long-term care, and more. So, while it makes sense for your income to decline slowly if you're not earning money, you'll likely need more money as you age and your health worsens. This is something to consider when you start withdrawing retirement funds and when making plans for your retirement years. The Census Bureau shows the average retirement income in each state. We have listed the averages for each state based on the region.
The five states with the highest retirement income range from 54 percent above the average to approximately 17 percent above. The District of Columbia has the highest median income for retirees, 54 percent above the average. Many people have a variety of sources of retirement income. These may include investment accounts to protect against inflation, benefits from government programs, or ongoing paychecks. Generally speaking, it's best to have several of these sources of income to ensure you have enough to live comfortably.
When considering where your retirement income will come from, an important aspect to consider is diversifying your portfolio. This can help alleviate market risks and protect your current or future revenues. Every time someone receives a payment, a Social Security tax of 6.2 percent of the gross amount is withdrawn. For the self-employed, this percentage doubles to 12.4 percent. Social Security then pays a portion of your retirement income with this money.
The amount you receive is based on what you earned during your working years and is based on the 35 years you earned the most. If you don't work 35 full years, zeros will be counted, reducing your monthly benefit. Working for at least 35 years will guarantee you a slightly higher pay according to the Transamerica Center for Retirement Studies.48 percent of U. S workers expect their primary form of retirement income to come from their personal financial assets. If this is the case for your situation, learn about ways to protect your assets against inflation.
You can do this by depositing your earnings into a retirement account or by annualizing your funds. Knowing your average retirement income can help you assess how healthy your finances are and whether you need to reevaluate your plans. It can also help you determine solid goals for your retirement savings and approximately how much you'll want to distribute on a regular basis. Once you know how much to distribute, you can focus on how you're going to do it, whether it's buying an annuity, implementing the deposit method, or following another system. If you're not sure what's best for you, talk to a trusted financial advisor who can help you develop a plan. Our free tool can help you find an advisor that fits your needs. Look for a financial advisor that fits your unique criteria and consult with them free without obligation.