Retirement is a stage of life that many people look forward to, but it can also be a source of anxiety if you're not sure how you're going to pay for it. Knowing the average retirement income in the United States can help you understand how it compares to the national average and give you a reference point when planning for this stage of life. This article will review the median and average retirement income in the U. S., as well as the sources of retirement income and how to protect your assets against inflation. 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. 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. Because retirees with higher incomes tend to skew the median retirement income, the median income is a more accurate measure of the national average. The Census Bureau shows the average retirement income in each state, ranging 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. Social Security also pays a portion of your retirement income with money taken out through taxes.
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. Statistically speaking, your income slowly decreases as you age 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. To get a better view of retirement income in the U. S., review your answers to questions such as: How much money do I need to retire? How much will I need to live comfortably in those years? What sources of retirement income do I have? How can I protect my assets against inflation?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. 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. As you prepare for retirement, understanding what a good monthly retirement income looks like can help give you an idea of where to start planning and how much money you'll need for a comfortable lifestyle. With this information in hand, you can start taking steps towards achieving your financial goals.
