The average retirement income for Americans aged 65 and older sits at $58,680 per year in 2026. You’re looking at a median figure that represents the middle point of all retirement incomes. Half of retirees earn more than this amount, and half earn less. The mean income, which includes extremely high earners, reaches $89,120 annually. This difference matters because it shows how much wealth inequality affects retirement planning.
Social Security benefits increased by 2.8% in 2026, bringing the average monthly payment to $2,071. That’s $24,852 per year. Most retirees need additional income sources to cover their expenses, which average around $62,000 annually for people over 65.
This guide breaks down retirement income by age, state, and income source. You’ll see where you stand compared to other retirees and learn what you can do to close any gaps in your retirement plan.
What Is the Average Retirement Income in the United States?
The median retirement income in 2026 is $58,680 per year for households where the primary earner is 65 or older. That works out to roughly $4,890 per month. The mean income is higher at $89,120 annually because a small percentage of wealthy retirees pull the average up.
You need to understand the difference between these two numbers. The median gives you a better picture of what typical retirees actually earn. Think of it this way: if you lined up 100 retirees by income, the person in the middle would earn about $58,680. The mean adds up everyone’s income and divides by 100, which means a few millionaires skew the number higher.
Here’s what changed in 2026:
- Social Security benefits rose 2.8% due to cost-of-living adjustments
- Average Social Security payment reached $2,071 per month
- Medicare Part B premiums increased to $185 per month
- 401(k) contribution limits rose to $24,500 for people under 50
- IRA contribution limits increased to $7,500
These updates affect how much you can save and what you’ll receive in benefits. The Social Security increase helps, but Medicare premiums eat into that gain.
Most retirees pull income from multiple sources. Social Security forms the foundation, but you’ll need savings from retirement accounts, pensions if you have them, and possibly part-time work. Only 12% of male retirees and 15% of female retirees depend on Social Security for 90% or more of their income.
The gap between income and spending is worth watching. Retirees spend an average of about $62,000 per year, which is roughly $3,320 more than the median income. This shortfall can lead some retirees to draw down savings faster than planned or consider part-time work which is one reason working with an financial advisor in Long Beach early in the process can help identify potential gaps before they become a problem.
How Much Income for Retirement Do You Actually Need?
Most financial advisors recommend replacing 70% to 80% of your pre-retirement income. Someone earning $100,000 before retirement would need $70,000 to $80,000 per year to maintain their standard of living.
But this rule doesn’t work for everyone. Your actual needs depend on several factors:
Your location makes a difference. Retirees in California need about 15% more income than those in Alabama due to housing costs, taxes, and general cost of living. If you plan to stay in Long Beach or the greater Los Angeles area, it may be worth budgeting for higher expenses than the national average. A financial advisor in Los Angeles can help model what local costs may mean for your specific plan.
Healthcare costs increase with age. Medicare covers many expenses, but you’ll still pay premiums, deductibles, and out-of-pocket costs. The average 65-year-old couple needs about $315,000 saved just for healthcare expenses throughout retirement. That number doesn’t include long-term care, which can cost $100,000 per year or more.
Your lifestyle choices drive your budget. Do you plan to travel? Take up expensive hobbies? Help your grandchildren with college? These decisions add thousands to your annual expenses. A retiree who travels internationally several times per year needs far more than someone who stays close to home.
Debt changes everything. Retirees who enter retirement with a paid-off home need less income than those with a mortgage. Credit card debt, car payments, and other obligations eat into your fixed income quickly.
Calculate your needs by listing your expected expenses:
- Housing (mortgage/rent, property taxes, insurance, maintenance)
- Healthcare (Medicare premiums, supplemental insurance, medications, out-of-pocket costs)
- Food and groceries
- Transportation (car payment, insurance, gas, maintenance)
- Utilities and home services
- Entertainment and hobbies
- Travel
- Gifts and charitable giving
Adding these up can offer a clearer starting point than a general rule of thumb. From there, comparing that figure to your expected income sources can help reveal how large any potential gap might be — something the retirement planning team at Randall Wealth Management Group can walk through with you in detail.
Average Retirement Income by Age: What to Expect as You Get Older
Your retirement income will decline as you age. The data shows a clear pattern: the older you get, the less income you receive.
| Age Group | Median Annual Income | Mean Annual Income |
|---|---|---|
| 55-59 | $103,200 | $150,800 |
| 60-64 | $85,650 | $127,900 |
| 65-69 | $70,400 | $104,300 |
| 70-74 | $63,150 | $94,700 |
| 75+ | $48,850 | $75,480 |
Notice the drop between ages 55-59 and 75+. The median income falls by more than $54,000, a decline of nearly 53%. This happens for three main reasons.
Fewer people work as they age. Many retirees in their early 60s still earn income from part-time jobs or consulting work. By 75, most people have stopped working entirely. That employment income disappears from their total.
Required minimum distributions from retirement accounts can run out. If you don’t plan withdrawals carefully, you could deplete your 401(k) or IRA faster than expected. The older you get, the more likely you’ve drawn down these accounts.
Investment returns matter less over time. Someone at 65 might have 25 years of potential market growth ahead. At 85, that runway is much shorter, so portfolios shift toward preservation rather than growth.
The data also reveals something interesting about the pre-retirement years. People aged 55-59 earn more than any other group, including those in their peak working years. This makes sense because many professionals reach their highest salaries in their late 50s before retiring.
You can see this pattern in your own planning. If you’re 60, expect your income to drop by about 18% over the next five years, even if you continue working part-time. By 70, your income will likely be 30% to 40% lower than it is today.
It can help to plan for this decline well ahead of time rather than assuming spending needs will drop at the same rate: healthcare costs, in particular, often rise enough to offset other savings. This is an area where income planning strategies can make a meaningful difference.
Retirement Income by State: Where You Live Changes What You Need
The state where you retire affects how far your income stretches. California retirees have an average income of $35,490, ranking 5th highest in the nation. But California’s cost of living means that income doesn’t go as far as it would in other states.
Compare California to Alabama, where the average retirement income is $24,896. That’s $10,594 less per year, but Alabama’s cost of living is 38% lower than California’s. A dollar in Birmingham buys more than a dollar in Long Beach.
States with the Highest Average Retirement Income:
| State | Average Annual Income |
|---|---|
| District of Columbia | $43,080 |
| Alaska | $36,023 |
| Maryland | $35,732 |
| Virginia | $35,306 |
| California | $35,490 |
States with the Lowest Average Retirement Income:
| State | Average Annual Income |
|---|---|
| Indiana | $20,542 |
| West Virginia | $21,118 |
| Arkansas | $21,967 |
| Iowa | $22,308 |
| Mississippi | $23,347 |
The numbers alone don’t tell you where to retire. You need to factor in taxes, healthcare access, climate, and proximity to family. Some states tax Social Security benefits while others don’t. Nine states have no income tax at all, which can save you thousands per year.
Tax-Friendly States for Retirees:
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax. New Hampshire doesn’t tax earned income but does tax dividends and interest.
States That Don’t Tax Social Security:
37 states plus the District of Columbia don’t tax Social Security benefits. The 13 that do tax them are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, West Virginia, and Wisconsin. Some of these states offer exemptions based on income levels.
California taxes retirement income but offers some breaks. Pension income receives no special exemption, and distributions from 401(k)s and IRAs are treated as taxable income, though Social Security benefits aren’t taxed at the state level. If you’re in Long Beach, retirement income needs may run above the national average — housing costs alone run roughly 150% higher than the U.S. median, and California’s income tax rates top out at 13.3% for higher earners. This is where working with a financial advisor in Long Beach who understands the local market can be particularly useful.
If you’re in Long Beach, your retirement income needs are higher than the national average. Housing costs alone run 150% higher than the U.S. median. Factor in California’s income tax rates, which top out at 13.3% for high earners, and you see why California retirees need more income despite having higher savings.
Moving to a lower-cost state can stretch your retirement savings significantly. But don’t make this decision based solely on money. Quality of life, healthcare access, and family considerations often outweigh tax savings.
Where Does Your Retirement Income Come From?
Retirees piece together income from multiple sources. Understanding each source helps you build a more secure retirement plan.
Social Security Benefits
Social Security tends to form the foundation of most retirement income plans. The average monthly benefit in 2026 is about $2,071, or roughly $24,852 per year, though actual benefits depend on earnings history and the age at which someone starts collecting. Reviewing your options with a Social Security analysis specialist can help clarify which claiming strategy may suit your situation.
Benefits can be claimed as early as 62, though doing so generally reduces the monthly payment by up to 30%. Waiting until full retirement age (66 or 67, depending on birth year) generally provides 100% of the benefit, and delaying until 70 can increase the benefit by roughly 8% for each year of delay beyond full retirement age.
The math often favors waiting, for those who are able to. Someone with a full retirement age benefit of $2,500 per month might receive only about $1,750 if claiming at 62, but that same benefit could grow to roughly $3,100 per month by waiting until 70. Over a 20-year retirement, waiting could mean collecting an estimated $144,000 more, depending on individual circumstances.
401(k) and IRA Withdrawals
Tax-advantaged retirement accounts often serve as a second pillar of retirement income. 2026 contribution limits are $24,500 for 401(k) plans (plus a $7,500 catch-up for those 50 or older) and $7,500 for IRAs (plus a $1,000 catch-up). Investment management strategies can help determine how these accounts should be allocated as retirement approaches.
Once you turn 73, you must take required minimum distributions from traditional 401(k)s and IRAs. These forced withdrawals are taxed as ordinary income. Roth accounts don’t have RMDs during your lifetime, which makes them valuable for estate planning.
The 4% rule suggests withdrawing 4% of your retirement savings in the first year, then adjusting for inflation each year after. Someone with $500,000 saved would withdraw $20,000 in year one. This strategy aims to make your money last 30 years, but market conditions and your spending needs affect whether it works.
Pension Income
Pensions provide guaranteed monthly income for life, but they’re becoming rare. Only 15% of private-sector workers have access to a traditional pension plan. Government employees still commonly receive pensions, which can pay 50% to 80% of final salary.
If you have a pension, you’ll typically choose between a single-life annuity (higher payments but nothing for your spouse after you die) or a joint-and-survivor annuity (lower payments but your spouse continues receiving benefits). This decision is permanent, so get it right.
Investment Income
Dividends, interest, and capital gains from taxable investment accounts provide flexibility that retirement accounts don’t. You can access this money at any age without penalties, and qualified dividends and long-term capital gains receive preferential tax treatment.
Building a portfolio of dividend-paying stocks can generate reliable income. Blue-chip companies often pay dividends that grow over time, which helps offset inflation. Bond interest provides stability, though rates in 2026 are lower than they were a few years ago.
Part-Time Work
About 32% of retirees aged 60-64 continue working, and 19% of those 65-69 stay in the workforce. Part-time work supplements retirement income and keeps you engaged. Many retirees consult in their former fields or take on flexible work through the gig economy.
Working after claiming Social Security can reduce your benefits temporarily if you’re under full retirement age. In 2026, you can earn up to $22,320 without affecting your benefits. Earn more than that and Social Security withholds $1 for every $2 above the limit. Once you reach full retirement age, you can earn unlimited income without any reduction.
Retirement Planning Services: Income Strategies That Work
Building reliable retirement income takes more than saving money. You need a strategy that coordinates your different income sources, manages taxes, and adjusts for changing needs over time.
Income Planning
A thoughtful income plan maps out when to draw from each source of retirement money, factoring in the tax implications of each withdrawal. Taking Roth IRA distributions before traditional IRA withdrawals, for example, can sometimes reduce taxable income and potentially lower Medicare premiums.
Withdrawal sequencing matters. Many retirees benefit from spending taxable accounts first, then tax-deferred accounts, and finally tax-free Roth accounts, an approach that allows Roth funds to continue growing tax-free while potentially avoiding higher tax brackets later.
Investment Management
Investment strategy often shifts with age. Growth-focused portfolios may work well earlier in life, but more stability is often appropriate closer to retirement. A balanced approach typically blends stocks for growth, bonds for stability, and cash for emergencies, the kind of allocation a financial advisor in Los Angeles or Long Beach-based planner can help tailor to your timeline.
Rebalancing periodically helps keep a portfolio aligned with risk tolerance. If stocks rise faster than bonds, the portfolio can become riskier than intended; selling some stocks and buying bonds can bring allocation back toward target. Reviewing this at least annually, and more often in volatile markets, is a common practice.
Retirement Plan Rollover
Leaving a job often raises questions about what to do with a 401(k). Options generally include leaving it with the former employer, rolling it into a new employer’s plan, moving it to an IRA, or cashing it out (typically not recommended). Retirement plan rollover services can help walk through which option may fit your situation.
Rolling a 401(k) into an IRA can provide more investment options and potentially lower fees, and multiple old 401(k)s can sometimes be consolidated into a single IRA to simplify tracking. A direct rollover is generally used to avoid taxes and penalties.
Estate Planning
A retirement plan often needs to address what happens to assets afterward. Beneficiary designations on retirement accounts generally override a will, so reviewing them regularly, especially after life changes like marriage, divorce, or the loss of a beneficiary — is worthwhile. Estate planning services can help keep these documents current.
Trusts can offer more control over how assets are distributed. A revocable living trust may help avoid probate while preserving flexibility during one’s lifetime, while irrevocable trusts can offer certain tax advantages at the cost of reduced access to assets.
Social Security Analysis
Deciding when to claim Social Security is one of the more consequential retirement decisions, and the right choice often depends on health, financial needs, spousal benefits, and life expectancy. A Social Security analysis can help model different claiming scenarios.
Married couples have additional strategies available. Spousal benefits can allow a lower-earning spouse to receive up to 50% of the higher earner’s benefit, and survivor benefits generally mean the surviving spouse receives the higher of the two benefits after one spouse passes. Comparing different claiming strategies can sometimes reveal a meaningful difference in lifetime benefits.
Life Insurance Services
Life insurance can serve different purposes in retirement than it did during working years. Coverage needs may decrease once children are grown and a mortgage is paid off, though some retirees maintain policies to help cover final expenses, replace lost pension income for a surviving spouse, or leave an inheritance. Life insurance services in Long Beach can help determine what level of coverage may make sense.
Permanent life insurance policies can build cash value that may be borrowed against or surrendered, offering another potential source of funds in an emergency. Some retirees also use life insurance as part of estate planning to help provide liquidity for estate taxes or to help equalize inheritances among children.
How to Increase Your Retirement Income Starting Now
You can take specific steps today to improve your retirement income tomorrow. Start with these strategies:
Max out your retirement contributions. The 2026 limits are $24,500 for 401(k) plans and $7,500 for IRAs. If you’re 50 or older, add catch-up contributions of $7,500 for 401(k)s and $1,000 for IRAs. Someone who maxes out a 401(k) from age 50 to 65 will accumulate about $700,000, assuming 7% annual returns.
Delay Social Security until 70 if possible. Every year you wait past full retirement age increases your benefit by 8%. That’s a guaranteed return you can’t get anywhere else. If you have other income sources or savings to live on, waiting pays off big over a 20-to-30-year retirement.
Create multiple income streams. Don’t rely on a single source. Combine Social Security with retirement account withdrawals, investment income, and possibly part-time work. Diversification protects you if one source underperforms or disappears.
Minimize investment fees. A 1% annual fee might not sound like much, but it can cost you hundreds of thousands of dollars over a lifetime. Low-cost index funds typically charge 0.03% to 0.20% per year. High-cost actively managed funds often charge 1% or more. That difference compounds dramatically over 20 or 30 years.
Consider guaranteed income products. Annuities convert a lump sum into guaranteed monthly payments. Immediate annuities start paying right away, while deferred annuities begin at a future date. These products aren’t right for everyone, but they eliminate longevity risk by ensuring you won’t outlive your money.
Optimize your withdrawal strategy. The order in which you tap different accounts affects your tax bill. Generally, withdraw from taxable accounts first, then tax-deferred accounts like traditional IRAs and 401(k)s, and finally tax-free Roth accounts. This sequence minimizes taxes and allows your Roth money to grow longest.
Review your portfolio regularly. Your asset allocation should shift as you age. A 35-year-old might hold 90% stocks and 10% bonds. By 65, a more typical split is 60% stocks and 40% bonds. By 75, you might be at 50-50 or even 40% stocks and 60% bonds. This gradual shift reduces risk as you have less time to recover from market downturns.
Plan for healthcare costs. Medicare doesn’t cover everything. Budget for premiums, deductibles, copays, and services Medicare doesn’t cover like dental, vision, and hearing aids. A health savings account (HSA) offers triple tax benefits: contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.
Pay off high-interest debt before retiring. Credit card debt at 18% interest will destroy your retirement plan. Prioritize eliminating this debt while you’re still working. Carrying a mortgage into retirement is common, but make sure the payment fits comfortably in your budget.
Consider your housing options. Your home is likely your largest asset. Downsizing frees up equity you can invest for income. Some retirees move to lower-cost areas to stretch their savings. Others use reverse mortgages to convert home equity into income while staying in their homes.
Average Retirement Income for Couples vs. Singles
Married couples have an average retirement income of about $100,000 per year, compared to $58,680 for single individuals. This difference comes with dual Social Security benefits, combined retirement savings, and shared expenses.
But couples face unique planning challenges. You need to plan for two lifespans, not one. If you’re both 65 today, there’s a 50% chance at least one of you will live past 90. Your retirement plan needs to last potentially 25 to 30 years.
Gender affects retirement income significantly. Women living alone have a median income of $29,280 per year, compared to $35,650 for men. This gap stems from lower lifetime earnings, career interruptions for caregiving, and longer life expectancies.
Women spend an average of 12 years out of the workforce caring for children or elderly parents, compared to just over one year for men. These career gaps reduce Social Security benefits and retirement savings. Women also live about five years longer than men on average, which means their money needs to last longer.
Spousal benefits can help close this gap. A spouse who didn’t work or earned significantly less can claim up to 50% of their partner’s Social Security benefit. This provides crucial income for lower-earning spouses who would otherwise receive minimal benefits.
Survivor benefits protect the remaining spouse. When one spouse dies, the survivor receives the higher of the two Social Security benefits. This helps, but the household still loses one benefit entirely. Many couples don’t plan for this income drop, which can create financial stress at an already difficult time.
Coordinating claiming strategies maximizes lifetime benefits. One common approach has the lower-earning spouse claim at full retirement age while the higher earner delays until 70, which can maximize the survivor benefit since the remaining spouse would receive that larger amount for life. A financial advisor in Long Beach who specializes in Social Security strategy can help model these scenarios for your household.
FAQs
What is the average retirement income in 2026?
The median retirement income for Americans aged 65 and older is $58,680 per year in 2026. The mean income is higher at $89,120 due to wealthy retirees raising the average. Most financial planners focus on the median because it better represents what typical retirees earn.
How much income do I need to retire comfortably?
Plan to replace 70% to 80% of your pre-retirement income. Someone earning $100,000 before retirement needs $70,000 to $80,000 per year. But your actual needs depend on your location, lifestyle, health, and debt level. Retirees in expensive areas like California need more than those in lower-cost states.
What’s the difference between median and mean retirement income?
The median is the middle number when you line up all incomes from lowest to highest. Half of retirees earn more than the median, and half earn less. The mean is the mathematical average calculated by adding all incomes and dividing by the number of people. The mean gets pulled higher by wealthy retirees, making the median a better indicator of typical income.
How does retirement income vary by state?
States with high costs of living tend to have higher average retirement incomes. The District of Columbia leads at $43,080 per year, while Indiana has the lowest at $20,542. Tax policies also vary widely. Some states don’t tax Social Security benefits or have no income tax at all, which stretches your retirement dollars further.
When should retirement income planning begin?
Starting earlier generally gives compound growth more time to work in your favor. Someone who begins saving at 25 may be able to save considerably less per month than someone who starts at 45. Even later in life, thoughtful planning can still meaningfully improve a retirement outcome, something a financial advisor in Long Beach can help assess regardless of where you’re starting from.
When should I start planning for retirement income?
Start now, regardless of your age. The earlier you begin, the more time compound growth has to work in your favor. Someone who starts saving at 25 needs to save far less per month than someone who waits until 45 to start. Even if you’re in your 50s or 60s, proper planning can still improve your retirement outcome significantly.
How can I increase my retirement income?
Max out retirement contributions, delay Social Security until 70, create multiple income streams, minimize investment fees, and optimize your withdrawal strategy. Working with a financial professional helps you coordinate these strategies for maximum benefit. Small changes today compound into large differences over a 20-to-30-year retirement.
Final Thoughts
Many retirees live on less than $60,000 per year, and that figure tends to decline further with age. But national averages don’t determine any one household’s outcome, your retirement will largely reflect the decisions made today and the strategies put in place along the way.
It can help to look at your own situation honestly: add up expected income from all sources and compare it to what you’re likely to spend. If a gap appears, there’s often still time to address it, through additional savings, an adjusted retirement timeline, or a different cost-of-living area. Small course corrections now can help prevent larger issues later.
Retirement planning involves a lot of moving parts. Social Security claiming strategy, tax-efficient withdrawals, required minimum distributions, Medicare decisions, and investment allocation all interact in ways that aren’t always obvious, and getting one piece wrong can be costly over a 20-year retirement.
You don’t have to work through this alone. If you’re in the Long Beach area or anywhere in California, the team at Randall Wealth Management Group, a financial advisor in Long Beach, can help you think through a retirement income plan that fits your situation. Clients throughout the region, including those working with our financial advisor in Los Angeles team, can review where they stand and explore what adjustments may be worth considering.
Call (562) 552-3367 or contact us here to schedule a consultation. We’ll review where things stand and talk through what might be worth changing.
