This Is The Average Retirement Income (Unexpected)
Summary
TLDRThe video delves into the average retirement income, highlighting the financial struggles many face as they rely heavily on Social Security. It reveals that 12% of men and 15% of women aged 65 and older depend on Social Security for over 90% of their income. With the median monthly income for this age group being $4,199, or just over $50,000 annually, many are forced to work past traditional retirement age or depend on family and government assistance. The video underscores the importance of early planning and investment for a secure retirement, addressing the impact of inflation and the varying retirement incomes across states.
Takeaways
- πΌ Many people are not saving enough for retirement, leading to a reliance on Social Security or other forms of assistance.
- π΄ 12% of men and 15% of women aged 65 and older depend on Social Security for 90% or more of their income.
- π‘ The median monthly income for US adults aged 65 and older is $4,199, which is just over $50,000 per year.
- π A third of Americans are aiming for a phased retirement, working part-time before fully retiring.
- π 70% of Americans aged 65 to 69 were retired between 2016 and 2022, with higher percentages in older age groups.
- π° Average retirement income varies by state due to differences in wages, cost of living, and tax rules.
- πΈ Retirees in the US spent an average of $57,818 in 2022, which is above the median income for this age group.
- π Housing costs often decrease as people age, with many having paid off their mortgages or downsizing to more affordable homes.
- π The average net worth of households headed by someone aged 65-74 is about $410,000, but this includes the value of their home.
- π Inflation is hitting retirees hard, causing the value of their fixed incomes to shrink as the cost of living increases.
Q & A
What is the average retirement income for Americans aged 65 and older?
-The average retirement income for U.S. adults 65 and older is reported to be $75,020 per year, while the median income is $50,290 according to data from the Census Bureau and Bureau of Labor Statistics [^3^].
How much do retirees typically spend on health care during their retirement?
-A 65-year-old retiring can anticipate spending an average of $157,500 on health care throughout their retirement [^9^].
What percentage of retirees rely on Social Security as their primary source of income?
-Approximately 40% of seniors rely on Social Security funds for their retirement [^9^].
What is the average monthly Social Security benefit for retirees?
-As of January 2024, the average monthly Social Security benefit check was $1,907 [^3^].
How does the retirement income vary by gender?
-Retirement-age men have a median income of $31,220 compared to women, who take in $27,350. On average, men 65 and older earn $50,490 per year compared to $40,830 for women [^3^].
What is the average annual spending for Americans aged 65 and older?
-Americans 65 and older spent an average of $57,818 in 2022 [^3^].
What percentage of nonretired individuals have no retirement savings?
-About 28% of nonretired individuals had no retirement savings, but more than three-fourths of them had at least some [^9^].
How much of their monthly income do retirees typically spend on housing expenses?
-Retirees reported that nearly one-third of their monthly income goes toward housing expenses [^9^].
What is the average retirement account balance for an IRA?
-The average retirement account balance for an IRA was $135,600 in 2021 [^9^].
How many Americans expect to work after retirement?
-57% of Americans expect to work after retirement [^9^].
Outlines
πΌ Retirement Income Realities
The video script discusses the challenges many individuals face in saving for retirement, with a significant number needing to work beyond traditional retirement age. It highlights the reliance on Social Security as a primary income source for many retirees, with 12% of men and 15% of women aged 65 and older depending on it for 90% or more of their income. The median monthly income for US adults aged 65 and older is reported to be $4,199, or just over $50,000 annually. The video emphasizes the importance of planning for retirement, as the average retirement income varies greatly across the US due to factors like local wages, cost of living, and tax rules. It also points out that retirees tend to spend less, with their average spending being about $20,000 less than those under 65, often due to fixed incomes, different spending habits, and fewer work-related expenses.
π‘ Financial Planning for Retirement
This section of the script delves into the financial planning aspect of retirement, noting that the median net worth for households headed by individuals aged 65 to 74 is approximately $410,000, and for those 75 and older, it's about $335,000. However, these figures include the value of one's home, and once that is subtracted, the liquid assets for many retirees may be considerably lower. The video points out that the average monthly Social Security check is $1,977, which may not be sufficient to cover all expenses, leading many to rely on additional income sources. It also addresses the issue of debt among retirees, with around 60% carrying some form of debt, which can be a significant burden due to fixed and limited retirement incomes. The impact of inflation on retirees is highlighted, as rising costs for essentials like groceries, healthcare, and housing erode the purchasing power of fixed incomes. The script concludes with advice on the importance of early planning and investment for a comfortable and secure retirement.
Mindmap
Keywords
π‘Retirement Income
π‘Social Security
π‘Median Monthly Income
π‘Phased Retirement
π‘Retirement Savings
π‘Cost of Living
π‘Inflation
π‘Debt in Retirement
π‘Net Worth
π‘Financial Planning
Highlights
Many people are behind on saving for retirement, needing to work past traditional retirement age.
Some retirees rely on family, friends, or government assistance to make ends meet.
The idea of a comfortable retirement seems increasingly out of reach for many.
12% of men and 15% of women aged 65 and older depend on Social Security for 90% or more of their income.
Social Security, originally a supplement, is becoming a primary source for many retirees.
Median monthly income for US adults aged 65 and older is $4,199, or over $50,000 per year.
Data sources often do not distinguish between retirees and non-retirees when reporting income.
Two-thirds of Americans aim for a phased retirement, working part-time and fully retiring at some point.
Between 2016 and 2022, 70% of Americans 65 to 69 were retired, and 83% of those 70 to 74 were retired.
Average retirement income varies across the US, with some states having retirees earning over twice as much as others.
Differences in local wages, cost of living, and tax rules contribute to the variation in retirement income.
Retirees in cheaper states might need less money, while those in more expensive areas need more.
Tax policies and pension plans can significantly affect retirees' net income.
In 2022, Americans age 65 and older spent an average of $57,818, which is above the median income for this age group.
Average spending for those aged 65 and older is about $20,000 less than what people younger than 65 spent.
Retirees tend to spend less due to fixed incomes and changes in expenses after retirement.
The median net worth of households with the head of household aged 65 to 74 is approximately $410,000.
For households with the head aged 75 and older, the median net worth is about $335,000.
Many retirees' homes represent a significant portion of their assets, and their liquid savings might be lower.
The average monthly Social Security check at the start of 2024 is $1,977, totaling $22,884 per year for individuals.
Married couples receive roughly double the Social Security amount, totaling over $3,800 per month.
Around 60% of individuals over the age of 65 carry some form of debt.
Inflation is hitting retirees hard, making it tougher for them to get by as prices for everyday things go up.
Many older adults have to cut back on essentials or use their savings faster than planned due to inflation.
Planning and investing early can help build a comfortable retirement fund and secure future.
Transcripts
what is the average retirement income
it's well known that many people are
behind when it comes to saving for
retirement with many people needing to
work well past the traditional
retirement age just to make ends meet
this struggle forces some to rely on
family friends or government assistance
to stay afloat the idea of a comfortable
and carefree retirement seems
increasingly Out Of Reach for many in
this video we'll take a look at the
average retirement income as well as
some other eye-opening information my
name is Chris and I help teach people
about money personal finance and
investing if you're interested in
improving your financial future make
sure to subscribe to the channel and hit
the like button if this video is helpful
even though retirement savings are
higher than they've been since 2022 many
seniors still rely heavily on social
security for most of their income the
Social Security Administration says that
12% of men in 15% of women age 65 and
older depend on the program for 90% or
more of their income this shows that for
many retirees Social Security isn't just
a small supplement but a major part of
their financial support this heavy
Reliance can come from not having enough
personal savings or Investments High
health care costs or the need to support
family members originally designed to
supplement retirement income rather than
serve as the primary source Social
Security is increasingly becoming
essential for many older adults without
this income where would these people be
they might be struggling physically to
continue working well into retirement
age relying on friends or family for a
place to stay or living on the dime of
their kids until their eventual
expiration the median monthly income for
us adults aged 65 and older is
$4,199 per month or just over $50,000
per year according to the mly fool
although not everyone 65 and older is
retired some might still be working so
these figures should be taken with a
grain of salt since most data sources do
not disting between retirees and non-
retirees when providing information
about reported income based on age
there's a little bit of a gray area
2third of Americans are aiming for a
phase retirement in which they'll work
full-time part-time and retire fully at
some point according to a 2024 survey
from Fidelity between 2016 and 2022 70%
of Americans 65 to 69 were retired 83%
of those 70 to 74 were retired in 88% of
Americans 75 and older were retired
according to Gallup few Americans are
retiring earlier than age 65 among those
60 to 64 32% were retired between 2016
and 2022 just 11% of those 55 to 59 were
retired and only 6% of Americans 50 to
54 were retired average retirement
income varies a lot across the US with
some states seeing retirees earning over
twice as much as those and others this
happens for several reasons like
differences in local wages and salaries
cost of living and tax rules in states
with higher wages people generally save
more for retirement out of necessity
leading to higher incomes in their later
years the cost of living is another big
factor retirees in cheaper States might
need less money to get by while those in
more expensive areas need more money to
buy simple needs like groceries tax
policies also differ with some states
giving retirees better tax breaks which
can make a big difference in their net
income pension plans are more common in
some states than others and where
they're prevalent retirees often have a
significant boost to their income plus
factors like access to Affordable Health
Care and Social Services can affect how
financially comfortable these retirees
feel all these factors combined to
create a wide range of retirement
incomes across the country in 2022
Americans age 65 and older spent an
average of
57,8 $18 according to the Bureau of
Labor Statistics and if you're paying
attention you'll see that this figure is
above the median income for this age
group the average spending for those age
65 plus is about $20,000 less than what
people younger than 65 spent that year
the lower spending can be attributed to
several factors such as having a fixed
retirement income different spending
habits or fewer work-related expenses as
people become older they're generally
not spending as much on cars or
Transportation related at ated expenses
and they don't drive as far or as
frequently and they often share a
vehicle with their spouse additionally
as people age housing cost often
decrease many older adults have paid off
their mortgage having a smaller
remaining balance or of downsize to a
more affordable home overall retirees
tend to spend less due to their income
level and the changes in their expenses
after they retire the decrease in
average spending is also affected by the
fact that people are no longer putting
money into their retirement accounts the
Med net worth of households where the
average head of household is between 65
and 74 years old is approximately
$410,000 for those aged 75 and older the
media net worth is about
$335,000 on the surface these figures
might seem relatively comfortable
however it's important to consider that
these amounts include the value of one's
home when you subtract the value of
their home the net worth figures can
look quite different for many retirees
their home represents a significant
portion of their assets and once it's
accounted for their liquid or accessible
savings and Investments might be
considerably lower this means that the
financial cushion they have to cover
day-to-day expenses health care and
other retirement costs might be much
thinner than these numbers initially
suggest at the start of 2024 the average
monthly social security check is
$1,977 which adds up to $ 22,88200
married couples receive roughly double
that totaling over $3,800 per month or
$46,000 per year although this amount
isn't terrible it often isn't enough to
cover all expenses leading many older
adults to rely on additional income
sources those who plan well might have
sufficient savings but others may not
have had such successful strategies
according to smartasset.com around 60%
of individuals over the age of 65 carry
some form of debt including credit card
balance mortgages car loans and more
while not all debt is considered
detrimental some like money owed on cash
flow positive Investments can be
considered good debt many retirees have
also borrowed against their homes when
mortgage rates were around 3%
nonetheless debt can be a significant
burden during retirement due to the
typically fixed and limited income that
retirees have managing debt in this
phase of Life can drastically increase
the amount of monthly income needed to
maintain a comfortable standard of
living the main issue isn't just the
number of retirees with debt but rather
that most of the recent increase in debt
is among high-risk households these are
households that have significant amounts
of unsecured debt or high levels of
borrowing compared to their assets
inflation is really hitting retirees
hard making it tougher for them to get
by is prices for everyday things like
groceries Health Care and housing go up
the fixed incomes many retirees rely on
like Social Security and pensions don't
stretch as far as they used to this
means that even though they might get
the same amount of money each month its
value is shrinking because it buys less
and less with costs Rising faster than
their income many older adults have to
cut back on Essentials or use their
savings faster than they planned this
financial squeeze from inflation makes
it harder for retirees to maintain their
standard of living and adds extra stress
to their retirement years most people
don't put that much effort into planning
for a comfortable retirement they often
ignore the need to plan ahead and miss
out on chances to grow their savings
this might be because they never learned
how crucial investing is they've always
delayed it or they were counting on some
other plan to take care of them in the
future luckily if you're watching this
you've got a great shot at beating the
average retirement numbers retiring
early and pulling in more income than
many others the trick is to start
planning and investing as early as you
can by getting started now and using
Financial tools wisely you can build up
a nice retirement fund and set yourself
up for a comfortable and secure future
your early efforts can make a big
difference helping you retire on your
terms without worrying about your basic
needs
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