As a result, if inflation is 2% during your first year in retirement, you’ll adjust your withdrawal amount to keep up with inflation-so you can withdraw $15,300 in your second year of retirement.Īs each year passes, you adjust with inflation. But this will be an amount that increases with inflation, so it needs to start low (you can read more about the strategy and its history using the link above). For example, if you have $500,000 invested for retirement and you’re comfortable with a 3% withdrawal rate, you could pull $15,000 from your savings in your first year. With that approach, you assume that you can withdraw 3% to 4% of your retirement assets each year and adjust the amount for inflation. However, you can also make rough estimates with rules of thumb like the so-called 4% rule (or a safer 3% rule). How much can you spend from your investments each year? It’s smart to do a robust financial plan to determine an appropriate spending level. Interest rates are relatively low compared to previous decades, so the amount you could spend would be minimal. The idea of “living off the interest” is appealing, but it’s not realistic for most people.

If you’re like most people (that is, you’re not fabulously wealthy), you will probably spend down your retirement savings over the course of your lifetime. How much do you need? It depends, but you can walk through an example of retiring with $50,000 of income (and use the calculator with your own numbers). Most people spend from their retirement savings-assets built up in IRAs, 401(k) or 403(b) plans, and other investment vehicles. If Social Security or pensions don’t provide all of the money you need, you’ll likely supplement that income with any money you’ve saved for retirement.

For example, the average monthly pension payment for teachers ranges from $14,000 per year to $63,000 and depends on numerous factors.Ĭontinue reading below, or watch the companion video covering this topic: Depending on your job (if you worked for a government organization that doesn’t pay into Social Security), your pension could replace or impact your Social Security income. If you’re fortunate enough to receive pension income, those payments can supplement Social Security income. The average retirement benefit from Social Security is $1,543 per month, or $18,516 per year. Social Security makes up a significant portion of income for most retired households. As a quick math refresher, the average is higher because those with extremely high incomes can pull up the average. The median income is just over $27,000 per year. That income may come from Social Security, pensions, and other sources. The average retirement income for a single person over age 65 is roughly $42,000 per year. As long as you can meet your needs, that’s what matters most.

Plus, comparing yourself to others is “the thief of joy,” as they say, so it’s not necessarily catastrophic to be below these levels. But please remember that these numbers are national, and your comfort level depends on where you live. Some context might help you understand what retirement may look like. What Is the Average Retirement Income for a Single Person? In this article, we review some basic information about retiring solo, and we’ll cover some tips to help improve your chances of living the life you want in retirement. The math and retirement planning tools are the same whether you’re single or coupled, although there are a few areas that require extra attention. While there may be some perks of living in a dual-income household, plenty of single people retire comfortably (and thrive).

Average monthly retirement spending