Average Retirement Income 2023: How Do You Compare?

How are you going to pay for retirement? How is everyone else doing it? What is the average retirement income for 2023? Has it changed a lot from past years as we put the pandemic behind us and the economy tries to figure out if things are going to get better or worse? Are you anywhere close to average?

Especially given today’s economy. The past year has held mixed financial results for different households. The rise of inflation has been challenging and the stock market has remained depressed. Housing prices have gone lower, but not as low as people have expected, and they have risen in certain areas. As usual, the well off continue to get by just fine and those with less resources have struggled more to keep up with rising prices. 

But, where do YOU stand now and how does that impact your future retirement? Have you been able to keep up with your savings? How will that translate into retirement income?

Figuring out if you are going to have a secure future can be difficult. There are a lot of questions to answer and some things can be estimated by comparing yourself to averages.

However, there is no way YOU are average. When reviewing the numbers below, remember that your retirement security is based on hundreds of different factors. The best way to plan and feel good about your future is by creating a detailed retirement plan. The NewRetirement Planner will give you reliable projections — unique to you. And, it will help you find a path to more confidence about your finances, plus more wealth and security.

Average Retirement Income and the Risk of Running Out of Money

The Boston College Center for Retirement Research publishes the National Retirement Risk Index (NRRI). It measures the share of American households that are at risk of being unable to maintain their pre-retirement standard of living in retirement. The index is updated each year.

Most households don’t have enough

According to their 2023 analysis, the percentage of retirees who are at risk of not having enough is about 50%.

The most recent analysis uses data from 2019, but recent economic factors have been considered.

Their conclusion? “After recalculating the NRRI using the most updated methodology, the bottom line from our previous studies still holds: about half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 and annuitize all their financial assets, including the receipts from a reverse mortgage on their homes.  The robustness of the results confirms the retirement saving issue faced by today’s working-age households, and that we need to fix our retirement system so that employer plan coverage is universal.  Only with continuous coverage will workers be able to accumulate adequate resources to maintain their standard of living in retirement”.Jump down to see average projected retirement income numbers for 2023. Or, use the NewRetirement Planner to calculate your own retirement income, assess if it is enough, and learn about moves to make now so you can feel great about your financial future.

Differences Between Mean and Median

The numbers you will review below represent median income. Median income is closer to the actual average for most households of retirement age. (Mean is the actual average.)

Here are the differences between mean and median:

Mean retirement income

Mean or average income is calculated by totaling each household’s income and then dividing by the number of households. This number can be very deceiving. Households earning the highest amounts of money will skew the data and make “average” incomes seem high.

In fact, mean (average) is particularly meaningless in 2023. Wealthy households are doing just fine. And, poor households have mostly simply held on or taken on more debt. 

Median retirement income

Median income is determined by organizing all income in order from low to high. The median income is the income in the exact middle of the list with half of the incomes being higher and half being lower. Many statisticians think that median income is a more representative number.

Median is probably more representative now with increasingly divergent income levels.

What is Median Income 2023 for All Ages?

Using data from 2021, the latest available, the median income for all ages in 2023 is $70,784. This represents only a very minor drop from 2020.

Average Retirement Income 2023 by Household Age: Income Falls as Households Get Older

The median income number above might seem “above average” — relatively healthy. However, the number doesn’t tell the whole story. Nor does it reflect the “retirement crisis” that is so often reported.

And, there is a reason. The number doesn’t show the reality of all retirees — especially those who are older.

Compare the median income by age range:

Age of Household Median Income Median Post Tax Income
Households Aged 45–54$97,089$85,444
Households Aged 55–64$75,842$66,638
Households Aged 65–74$55,474unknown
Households Aged 75 and Older$36,925unknown
SOURCE: Data is summarized from theUS Census Bureau’s Current Population Survey (CPS) Annual Social and Economic (ASEC) Supplement. The CPS is a joint effort between the Bureau of Labor Statistics and the Census Bureau.

You see, for most people, retirement income falls dramatically as you age. The median household income for households older than 75 is under half that of the income for households ages 55-64 and significantly below the average for those 45-54.

Much Worse Retirement Income for Single Female Households

Declining average retirement income as people age is not the worst of it!

The averages are more distressing for people who are single, especially women. The Pension Rights Center reports that “Half of all Americans age 65 or older have incomes of less than around $25,000 a year — far less than the amount that most need to meet their day-to-day living and health care expenses.”

The 2020 Census Data shows this for non-family (single) female households:

Age of Household Median Income Mean Income 
Households Aged 65-69$28,311$39,945
Households Aged 70-74$26,558$37,159
Households Aged 75 and Older: $21,666$32,233

Do Nationwide Averages Matter? What is the Average Retirement Income in YOUR State?

Age matters when it comes to assessing average retirement income. Where you live is another big factor.

The national retirement income averages might be interesting, but not useful to you. After all, there are huge differences in the costs of living and income across different cities and regions in the United States.

Highest earning states: Maryland has the highest average household income at $94,789 followed by the District of Colombia, New Hampshire, New Jersey, and Utah.

Lowest earning states: The lowest average household income is found in Mississippi which at $45,134 is less than half that earned in Maryland. The other lowest income states are West Virginia, Arkansas, New Mexico, and Kentucky. 

Compare Your Income to Others in Your Zip Code

The Census Bureau will enable you to look up the average income and various other demographic data for your zip code. This may be a relevant measure to how you are doing compared to your peers, although it is really important to remember that all that matters is that you have sufficient income for you and your needs.

Using the Census Bureau Search: Find the search here. Plug in your own zip code (or in a zip code where you might relocate for retirement) and select the fact you would like. They offer “median household income.”

Where Does Most Retirement Income Come From… And How Can You Boost Yours?

What follows are the top 4 sources of retirement income for most retirees and how to boost your income from each of them.

1. Average Social Security income for 2023

The average monthly Social Security income got an 8.7% boost for 2023 due to rising inflation. This Cost of Living Adjustment (COLA) raised the average monthly Social Security payment to $1,827 a month or approximately $22,000 a year.

NOTE: The average income for female households 75 and over is roughly equal to the average Social Security income.

Social Security was never intended to be a primary source of income. It was only ever intended to supplement retirement income. However, maximizing your payout can really add up over your lifetime!

How to increase your Social Security income

What is the best way to get more Social Security income? Here are 2 tips:

Postpone the Start: Postpone collecting your benefits until at least full retirement age or longer (age 70) to get the maximum monthly payment. Delaying the start of Social Security can mean a BIG boost to your overall retirement wealth.

And, more and more retirees are getting the message. It used to be that the most popular age to start benefits was 62. However, now the most popular age for men to start benefits is 66 with 36% starting benefits at that age, followed closely by age 62 with 27% starting at this early age. The most popular age for women to start is a tie. Thirty-one percent of women start at 62 and another 31% start at 66.

Plan for Your Spouse’s Income, Not Just Your Own: If you are married, it is probably a good idea for the higher earning spouse to defer the start of benefits for as long as possible. As you saw above, retirement income for people living on their own is extremely low.

You can help mitigate that problem with the right claiming strategy. Learn more about smart strategies for Social Security if you are married.

2. Average Retirement Income from Assets for 2023

According to the most recent Transamerica Retirement Survey, 50% of workers expect their primary source of income in retirement to come from self-funded savings such as 401(k)s, 403(b)s, IRAs (38%) or other savings and investments. The expected reliance on retirement accounts (e.g., 401(k)s, 403(b)s, IRAs) is higher among workers of large and medium companies than those of small companies (45%, 39%, 29%, respectively). 

And, the Pension Rights Center reports similar estimates. However, they have found that most older adults have little in savings. Only 66% receive income from financial assets. Half of those receive less than $1,754 a year.

Most people don’t have enough assets to meet their needs. The estimated median for baby boomer’s total retirement savings is inadequate to provide the income needed.

Transamerica reports that workers have saved $93,000 (estimated median) in total household retirement savings as of late 2020. Full-time workers have significantly more in retirement savings at $104,000, which is more than twice as much as the $48,000 part-time workers have saved (estimated medians). Eighteen percent of workers have saved less than $10,000 in retirement accounts. Seven percent of workers report having $0 in retirement savings, including six percent of full-time workers and 12 percent of part-time workers..

How much retirement income does the average savings produce?

If you were to use a common (though flawed) rule of thumb to withdraw 4 percent each year — adjusting for inflation as you go along — then a savings of $164,000 (a value twice that of the averages cited above) would only produce about $6,560 in retirement income in your first year of retirement.

This is not enough for most households.

How to boost your income from savings

This is easy… save more! Okay, maybe not so easy.

  • If you are young, max out your 401(k) contributions and start an IRA. Keep up the contributions, and you’ll have a tidy sum when you retire.
  • If you’re midway through your working years, it’s a little tougher. Be careful about what you spend on family in this phase of your life. Try to focus on making catch-up contributions.
  • Retired or almost retired? Perhaps the best way to boost your retirement income from savings is to actually spend less or work longer! Your savings will last a lot longer if you are spending less (here are 20 ways to cut retirement costs).

You may also want to explore the best way for you to turn your savings into retirement income. Or, explore using a bucket strategy. It maximizes the growth of some of your assets while minimizing risk on others.

Working with a financial advisor to identify opportunities to efficiently turn assets into income can be another good opportunity for you. NewRetirement Advisors is a new, cost-effective, and comfortable way to work with a Certified Financial Planner.

Or, model different scenarios using the NewRetirement Planner to find a set of inputs and opportunities that give you a secure future.

3. Average Retirement Income from Pensions

The Pension Rights Center has reported that one out of three older adults have retirement income from a pension. This number is trending further downward. Consider yourself extremely lucky if you have this income!

Very lucky in fact: Older adults who have pensions typically have at least twice the income of those living only on Social Security

The median annual pension benefit ranges between $9,262 for private pensions to $22,172 for a state or local pension, and $30,061 for a federal government pension and $24,592 for a railroad pension.

How to boost your pension income

You cannot exactly boost your pension payments. You can make sure that you are making the right choice between getting monthly payments vs a lump sum. Additionally, you should periodically check with your plan administrator about the health of the funds. Many pensions are underfunded.

If you are lucky enough to have a pension, be sure to use a retirement calculator with pension controls to accurately factor your pension into your overall plan! The NewRetirement Planner fits the bill!

4. Average Retirement Income from Work:

Work after retirement could be an important part of retirement income.

Before the pandemic, the Bureau of Labor Statistics reported that increasing numbers of people over 65 and even over 75 would be remaining in the work force. 

However, as of the third quarter of 2021, 50.3% of U.S. adults 55 and older said they were out of the labor force due to retirement, according to a Pew Research Center analysis of the most recent official labor force data. This indicates that fewer people are working after retirement age than in previous years.

In the third quarter of 2019, before the onset of the pandemic, 48.1% of those adults were retired. In regard to specific age groups, in the third quarter of 2021 66.9% of 65- to 74-year-olds were retired, compared with 64.0% in the same quarter of 2019.

How to boost retirement work income

Delaying your retirement is the first option you might want to look at. Or, if you don’t already have a retirement job, you should consider one.

It doesn’t need to be a 9–5. It does not need to be high stress. In fact, you should look for work that you really enjoy doing and let the income be a bonus.

Any work income is going to be tremendously beneficial — both financially and for your intellectual and social well-being as well. Explore the benefits of work after retirement and the best jobs for retirees. Also, have you considered passive income sources?

Use the NewRetirement Planner to see how work income impacts your long term financial health. Try different scenarios with different levels of work income over varying time periods to discover your optimal plan.

Average retirement income in 2023 is somewhat driven by choices retirees made long ago — where did they work, how much did they save, did they buy a home, and more. However, retirement income is also driven by decisions retirees make today and trends driving the overall economy.

Here are some financial trends that may impact your retirement income:

The threat of recession

Economists do not agree about whether or not we’ll see a recession in the near future. The biggest problem with a recession is job loss, which could certainly impact your income and ability to save.


No matter how much income you have, when inflation is high, the amount you can buy is less. Inflation can be one of the most dangerous economic conditions for retired people who can not get a raise to keep pace with the increase in prices.

12 month percentage change, Consumer Price Index for all items

Source: U.S. Bureau of Labor Statistics

Social Security and Medicare solvency

Social Security and Medicare are in real financial trouble. Nothing is certain, but if you dive into the numbers, you can see that there are very real concerns about the future of these programs that provide the lion’s share of retirement income.

While, if you are of retirement age now, your benefits are probably not in peril, future claimants may face reduced benefits.

Pension Plan Solvency

Like Social Security and Medicare, many pension plans are underfunded. If you are lucky enough to have a pension, it may be worthwhile to investigate your plan’s solvency.

Interest rates

While interest rates have risen significantly since 2020, they are still at historic lows. 

Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, June 13, 2023.

Stock market uncertainty 

The stock market is not predictable and the last two years have seen significant losses. However, in case you haven’t noticed, the recent trends have been upward since a low in October of 2022. 

What happens next is anyone’s guess.

Increased interest in deferred lifetime annuities

According to LIMRA, deferred lifetime annuities (also known as longevity annuities) are growing in popularity. A deferred lifetime annuity is an insurance product that guarantees a monthly paycheck to start at a future date you determine. See what kind of future income you could afford by using the lifetime annuity calculator.

Annuities can also be a part of a Lockbox Strategy, a retirement income methodology developed by Nobel Laureate William Sharpe.

Tight real estate market

Home prices in your neighborhood might be up or they might be down, but nationally they are up. CoreLogic reports that home prices rose 2 percent year-over-year in April, compared to 3.1 percent in March; it predicts growth to continue slowing throughout 2023. 

This despite the rising interest rates. 

You might not immediately think of your home as having an impact on your retirement income. However, your home is most likely your most valuable financial asset and there are various ways to turn your equity into retirement income.

You can tap into your home equity to help maximize your wealth, add to your retirement income, or make other assets last longer.Downsizing, cash out refinancing, or securing a reverse mortgages are possibilities.

You can model future housing changes as part of your long term financial plan in the NewRetirement Planner.

Retirement Income for 2023 is Only Part of the Equation

Knowing about average retirement income for 2023 is interesting and one way to benchmark your financial health.

However, knowing your own projected retirement income from now throughout retirement and also calculating your future spending is the key to a secure retirement.

The NewRetirement Retirement Planner isn’t a magic 8-ball (although it very well seems like one), but it can give you very personalized and detailed answers and forecasts for your retirement income and spending.

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