Here is the average income for retirees in the US — how do you compare?

Here's the average income for retirees in the US

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Americans hoping to retire soon aren’t likely to feel that the timing’s ideal. Even those with decades worth of savings are taking huge hits, no thanks to the triple whammy of inflation, high interest rates and a volatile stock market.

Yes, inflation dropped to 3.2% in October. But have incomes kept up? With fears of a pending recession and worries about the country defaulting on its debt, that question suddenly matters much more. And is there any hope Social Security can come to a retiree’s rescue?

For many Americans who count on Social Security as the foundation of retirement income, it’s next to impossible to make do. Social Security retirement benefits averaged $1,793.51 per month in September, for a total of $21,522.12 per year, according to the Social Security Administration. Broken down weekly, that’s roughly $414 - not exactly a king’s ransom.

And even if the total income for retirees includes other sources, is the final tally enough?

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What the average American retiree makes

Americans 65 years and older reported a median annual income of $50,290 in 2022, according to the United States Census Bureau. However, the median for all households came in much higher, at $74,580. Furthermore, the 65-and-older figure, while not staistically different from 2021, was still about 2.6% lower than in 2020. Especially once medical expenses are factored in, it’s risky at best to count on Social Security to cover all retirement expenses.

Still, not all Americans over 65 are actually retired; they may still bring in income from work. So the big question is this: what will your quality of life look like?

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The many sides of retirement expenses

To answer that question, a number of critical factors must be addressed: the place you live and its cost of living, your overall health, and the expenses you carry, discretionary versus necessary.

The Bureau of Labor Statistics broke down the expenses of those 65 and older. Taking into account combined income sources, including savings and Social Security benefits, Americans aged 65 and over spent an average of $57,818 as of 2022 — higher than that $50,290 median annual income figure cited above. The expenses break down to $60,844 for those 65 to 74 and $53,48 for those 75 and over.

No wonder, then, that many American retirees re-enter the workforce later on. About one-in-six retired Americans continue to consider a return to work, according to a February study by PayChex. It should be noted, though, that boredom may play a role here; slightly more than half of retirees (55%) went back to work because they needed more money.

So what will it be: Back to the grind or back to the drawing board? To the latter point, consider meeting with a financial adviser to work out smart solutions with the money you’ve got: how you can cut back, downsize or unlock the potential of your assets.

The key is to make the numbers work in your favor. And if the numbers show more red than black, fear not: Stories abound of creative seniors with below-average incomes who enjoy far-above-average retirements.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.