It’s a natural behavior to look around and compare yourself with your neighbors to know if you are doing better than them or not. It is common to have similar question in retirement. You would be keen to know how much retirement income they are receiving. It is useful to know what average retirement incomes actually are, but, it cannot be generalized because each of us is in a dissimilar circumstance, with unlike desires and necessities.

What is meant by average income and median income?

• Average income: It is often mentioned as mean income. It is calculated by adding up each household’s income and then dividing by the number of family members.
• Median income: Median income is calculated by arranging all individual’s income in an ascending order from low to high and recognizing the median income that is in the exact middle of the arrangement order.

So, what is average retirement income and why is it needed?

Average retirement income is the income that you will need in retirement. The average retirement income is influenced by a number of factors, and determining an average retirement income before retiring is very important in order to have a financial and tension -free future.

What are the average and median incomes for households of different ages?

The average retirement income is dependent on the age of the household and is found to decline significantly as they grow older. The median income of households aged 55-64 is $62,800 approx. and mean income is $89,900 approx. The median income of households aged 65-74 is estimated to be $47,000 and mean income is estimated to be $68,000. The median income of households aged 75 and above is $30,600 approx. and mean income is estimated to be $45,900.

Sources to generate retirement Income

• Social Security: Social security is the most common source of retirement income. Most of the retirees in US majorly rely on this as it is a major source of retirement income.
• Retirement Accounts: Retirement accounts like 401(k) or IRAs are proposed to provide you with revenue when you stop working. The retirement accounts are valuable as they offer tax savings like deferring the income tax payment on the savings until the money is pulled out.
• Real Estate: Real estate deals with the possession, rental or auction of property. This is one of the sources of generating income post retirement.
• Bonds and Stocks: Bond and Stocks are some of the sources of retirement income. Bonds pay off in two ways, one, it acts as a source of income through interest payment and two, payment can be received on reselling the bond. In case of stocks, an individual who buys stocks from a company can claim the ownership of a portion of the corporation’s assets and earnings and hence makes it one of the ways to receive income after retiring.

How to boost your average retirement income before retirement?

You can improve your average retirement income at any stage before retiring. One successful way is to start saving and investing most of your money in IRA accounts and 401 (k) plans as these will keep up the contributions and will provide you a tidy sum when you retire.

How to boost your average retirement income if you are retired or almost retired?

Retired or almost retired? You can opt for any of the following ways if you wish to improve your financial situation and get more retirement income.

• Postpone retirement: You can push your retirement date a little further and use the time to work and save more money to utilize it as income in the future.
• Postpone the withdrawal from Social Security: To avail better interest rates, postpone the withdrawal from Social Security account before retirement. It is best to collect the money after full retirement age is reached to get maximum retirement income.
• Postpone the withdrawal from savings and maximize the investments: The more you extend your working period, the more you can delay the withdrawal of the savings from savings accounts. The other advantage is that the untouched savings in the banks can grow more and yield more on withdrawal of the savings after retirement.
• Working after retirement: Working part time or full-time post retirement will enhance your Social Security benefits.
• Draw a budget and stick to it: Retirement incomes are not dependent on vast investment accounts and big salaries. Cutting down unwanted expenses and living economically can give you a secure retirement at any pay scale.
• Tap your home equity: You can rent your home or other property to maximize your capital, add to your retirement income or make the possessions last for a longer time. Also, the Average Retirement Income is partly dependent on the place where you live as some of the places are expensive.

Your retirement doesn’t have to be miserable. Your average retirement income can be above-average and above-median, if you take some action right away.