What Is the Median Retirement Income?

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on August 17, 2023

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What Is the Median Retirement Income?

Median retirement income refers to the midpoint income received by retirees, meaning that half of all retirees have income above this value and the other half below it.

Understanding this concept is vital for anyone planning for retirement as it provides an idea of the typical income one might expect during retirement years. It gives context and a reference point to evaluate personal retirement plans and goals.

As of 2023, the median retirement income for U.S. households aged 65 and older was approximately less than $52,575.

However, this figure varies widely based on various factors, including geographic location, education level, pre-retirement income, and more.

Recognizing the median retirement income can impact readers by encouraging proactive financial planning to secure a comfortable retirement.

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Factors That Influence Median Retirement Income

Age of Retirement

The age at which an individual retires directly affects their retirement income. Those who retire early may have less retirement income due to a shorter period of contributions to retirement plans and pensions.

Years in the Workforce

The length of time a person has worked also influences retirement income. Individuals with more years in the workforce tend to have higher retirement income as they have had more time to contribute to retirement funds and accrue savings.

Pre-retirement Income

High earners tend to have higher retirement incomes as they are often able to save more during their working years and contribute more to retirement plans.

Level of Education

Education influences earning potential during working years and, thus, affects retirement income. Individuals with higher education often have higher earnings, leading to higher retirement income.

Geographic Location

The cost of living and wage standards in various locations can impact retirement income. Individuals in high-cost-of-living areas may need a higher retirement income to sustain their lifestyle.

Gender and Racial Disparities

Unfortunately, systemic gender and racial disparities in earnings often carry into retirement. Women and people of color tend to have lower retirement incomes due to these disparities.

Factors That Influence Median Retirement Income

Sources of Retirement Income

Retirement income comes from various sources, including Social Security benefits, pensions, retirement savings accounts like 401(k)s and IRAs, annuities and insurance contracts, investments and dividends, and part-time work during retirement.

Social Security Benefits

In the U.S., Social Security is a significant source of retirement income for many people. The Social Security Administration provides monthly payments to retirees based on their past earnings.


Pensions, although less common today, provide regular payments to retirees based on their years of service and final salary.

Retirement Savings Accounts

Individual retirement accounts (IRAs) and 401(k) plans allow individuals to save for retirement with tax advantages.

Annuities and Insurance Contracts

Annuities provide a steady income for a specified period or for life, offering a reliable income stream for retirees.

Investments and Dividends

Investments in stocks, bonds, and real estate can provide income through dividends, interest, and rent.

Part-Time Work During Retirement

Some retirees choose to work part-time to supplement their retirement income and stay active and engaged.

Influence of Inflation on Retirement Income

Inflation has a profound effect on the real worth of retirement income. As it gradually reduces the purchasing power of money, the same sum of retirement income will afford less in the future due to increasing prices. Hence, considering inflation in retirement planning is critical.

It is necessary to adjust retirement income in relation to inflation rates to uphold its value and ensure it sustains the retiree's purchasing power, thereby maintaining their standard of living.

Strategies to Increase Retirement Income

There are various strategies to increase retirement income, including delaying retirement, increasing savings, smart investment strategies, utilizing tax-advantaged retirement accounts, and diversifying income streams in retirement.

Delaying Retirement

Working a few extra years can significantly increase retirement income. It allows more time for contributions to retirement savings and reduces the number of years retirement savings need to last.

Increasing Savings

The more an individual can save during their working years, the higher their retirement income will be. It's recommended to start saving early and consistently over time.

Smart Investment Strategies

Investing in a diversified portfolio can increase retirement income. It's essential to balance risk and return and consider professional advice if necessary.

Utilizing Tax-Advantaged Retirement Accounts

Making the most of tax-advantaged retirement accounts, such as 401(k)s and IRAs, can significantly boost retirement income.

Diversifying Income Streams in Retirement

Having multiple income sources in retirement can provide a safety net. These could include Social Security, pensions, savings, investments, and part-time work.

Strategies to Increase Retirement Income


Understanding the concept of median retirement income is crucial to preparing for a secure and comfortable retirement.

This figure, affected by factors such as the age of retirement, years in the workforce, pre-retirement income, education level, geographic location, and systemic disparities, provides a helpful benchmark for financial planning.

A retiree's income can come from varied sources, including Social Security, pensions, savings accounts, annuities, investments, and even part-time work.

Being mindful of inflation's impact and deploying strategies such as delaying retirement, increasing savings, wise investments, and diversification of income sources can elevate retirement income levels.

Proactive planning is key to ensuring financial security and the ability to cover expenses in retirement, reducing reliance solely on Social Security. Ultimately, understanding and navigating these elements are instrumental to achieving a financially sound and fulfilling retirement.

What Is the Median Retirement Income? FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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