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Exploring Average American Retirement Income and How to Prepare for a Comfortable Retirement

Photo: Yahoo Finance

Exploring Average American Retirement Income and How to Prepare for a Comfortable Retirement

More Americans are forced to retire early—and are unprepared for the long haul

Navigating the Challenges and Concerns Surrounding Average American Retirement Income

According to the MoneyWise article, as retirement approaches, many Americans, particularly those nearing 60, grapple with a fundamental question: Have they adequately prepared for their retirement years? A recent survey conducted by Cerulli Associates highlights the foremost concern among retirement savers: the fear of outliving their financial resources, a concern shared by approximately 58% of savers, especially among those who have already retired.

Determining whether one’s savings, including their average American retirement income, will sustain their retirement lifestyle is a complex matter best addressed with the guidance of a financial adviser. These professionals can conduct simulation tests based on individual assets and spending habits, offering personalized insights. However, it’s also valuable to examine the broader financial landscape by considering how other Americans manage their retirement expenses, although national figures should be viewed with some caution due to individual financial variations.

For retirement-age Americans, the average American retirement income presents a nuanced picture in 2022. The median household income stood at $50,290, according to Census Bureau data, representing the regular income received before taxes and deductions, excluding certain receipts like capital gains. Conversely, the average household income for the same age group amounted to $75,020, albeit influenced by a subset of retirees with substantial earnings. Typically, comparing oneself to median income levels proves more practical than averages for personal assessment.

READ ALSO: Homeowners In California Are Concerned About The State’s House Insurance Problem

Analyzing Average American Retirement Income and Savings by Age Groups in America

According to Yahoo Finance, breaking down average American retirement income by age groups, the Census Bureau data provides a nuanced perspective. For those aged 65 to 69, the median income was $59,430, with an average of $87,860. In the 70 to 74 age group, the median income was $55,990, with an average of $79,920, while those aged 75 and over had a median income of $41,060 and an average income of $62,470.

Understanding one’s expected retirement expenses is crucial to gauging financial readiness, alongside assessing personal savings. Comparing savings to those of peers offers a valuable benchmark. In 2022, Vanguard reported median and average balances by age group for employer-sponsored plans. Balances ranged from $1,948 median and $5,236 average for those under 25 years to $70,620 median and $232,710 average for those aged 65 and over.

Ultimately, taking early steps to consult a financial adviser and strategize for retirement is essential for securing a comfortable retirement, especially for those concerned about their financial preparedness. Starting early enhances the chances of achieving a financially secure retirement.

READ ALSO: Social Security’s Cost Of Living Adjustment Could Rise The Benefits By More Than $57 A Month In 2024

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