Retirement income statistics: the average retirement income in the US, and more
Learn about the average retirement income across the US, including how it varies by state. Or connect directly to a financial advisor by answering a few simple questions below.
Summary
The average retirement income in the US is a little less than $28,000 as of early 2025.
Whether you’re taxed on your retirement income will depend on where you live and the sources of your income.
Most retirees receive Social Security benefits, and the average annual benefit for recipients is around $23,000.
Working with a financial advisor can be helpful when trying to plan for your retirement.
What is the average retirement income in the US?
Retirement income varies from household to household and may often depend on where you live. Most Americans believe they need just shy of $2 million in savings and investments socked away to retire, but most fall far short of that — as such, most will depend on some sort of income during their post-work years.
According to data from the U.S. Census Bureau's American Community Survey, the average retirement income per household in the US is slightly less than $28,000. However, the averages vary significantly from state to state.
Analyzing the data on a more granular level shows that the average retirement income is highest in Alaska, at $36,000, and lowest in Indiana, at around $20,600. This means the average retired household’s retirement income is roughly 43% lower in Indiana than it is in Alaska. Note that the District of Columbia has the highest retirement income of all states, at more than $43,000.
Here’s a look at how the averages breakdown by state:
How much tax do Americans pay on retirement income?
How much tax you pay on retirement income varies depending on where you live. You may end up paying taxes on withdrawals from your retirement accounts — depending on the specific type — and you may need to pay income taxes on Social Security payments.
There’s also the matter of if you’re still earning income from working, investments, and other sources. That can generate income tax liabilities, and the amount you need to pay will depend on your tax filing status, total income, and other factors, including where you live.
Further, and again dependent on your income level, you may also need to pay the Net Investment Income Tax (NIIT), which is a 3.8% Medicare tax on investment income above a certain threshold. It may be a good idea to speak with a financial advisor to find out if this applies to you.
Again, it all depends on the specifics of your situation and place of residence. However, many people's primary question may revolve around whether they need to pay taxes on Social Security benefits.
The answer is — you guessed it — that it depends on your state of residence for both Social Security taxes and pension income. Overall, roughly 40% of Americans will need to pay federal income taxes on their Social Security benefits.
Here’s a breakdown of how states tax retirement income, but note that federal taxes may still apply:
No state income tax (no matter the source): Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
No state tax on Social Security benefits: Alabama, Arizona, Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Wisconsin.
No state tax on pension income: Alabama, Alaska, Florida, Hawaii, Illinois, Iowa, Mississippi, Nevada, New Hampshire, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, and Wyoming
What is the average Social Security benefit?
According to data from the Social Security Administration, the average Social Security benefit was $1,788.12 at the end of 2024.
That figure is among all beneficiaries, which includes disabled workers and more.
The average monthly benefit among retired workers was slightly higher, at $1,925.46. That’s about $23,000 per year.
Where does the majority of retirement income come from?
Perhaps the most common source of retirement income is Social Security since almost every American contributes to it and is entitled to benefits.
According to the Federal Reserve’s most recent Report on the Economic Well-Being of U.S. Households, 92% of Americans over the age of 65 receive Social Security benefits of one type or another,
Additionally, 64% of Americans over age 65 derive income from pensions, 52% from interest, dividends, or rental income, and 26% from a paycheck or self-employment, meaning they’re still working in some capacity.
Retirement income can also come from retirement savings accounts or plans (401(k)s or IRAs, for example), annuities, life insurance, and other sources, such as reverse mortgages.
How do people manage their retirement income planning?
Planning out your income after you retire isn’t easy, and there are multitudes of variables to consider. That’s why it may make sense to work with a professional to get a sense of what you should expect, anticipate, and plan for once they retire.
Many people work with a financial advisor to manage or grasp their retirement income planning. Data from AARP shows that 38% of Americans over the age of 50 worked with a financial professional to help plan for retirement, which would likely include planning for post-work income as well.
Relatedly, additional research finds that people who work with a financial advisor tend to be more confident about their retirement, too, which is important to consider.
Get expert financial advice
Planning for retirement is a big task, and preparing for how much income you’ll receive is perhaps the most important part of it. Most retirees will get Social Security benefits, which should supplement their savings, investments, pension income, and more. But again, it can all be a lot to plan for, so it may make sense to work with a professional.
If you want to learn more, Unbiased can help you find a financial advisor.
Content Writer
Sam Becker is a freelance writer and journalist based near New York City. He is a native of the Pacific Northwest and a graduate of Washington State University, and his work has appeared in and on Fortune, CNBC, Fast Company, and more.