Average Retirement Income 2025: What is a Good Monthly Retirement Income in 2025?

If you’ve ever typed “good monthly retirement income” into a search bar, you’ve probably noticed two things:
(1) the internet loves a simple number, and (2) retirement refuses to be simple. The truth is, a “good” monthly
retirement income in 2025 depends less on your neighbor’s number and more on your own spending, your
healthcare, and how much of your income is guaranteed versus “please don’t crash this year, markets.”

Still, you don’t have to guess. In this guide, we’ll use real U.S. benchmarks (Social Security averages, older
household income statistics, and retiree spending data) to build a practical monthly targetthen we’ll test it
with specific examples. And yes, we’ll talk about the “rules of thumb” everyone quotes at cookouts, plus why your
retirement plan should be more “custom suit” than “one-size hoodie.”

2025 retirement reality check: three numbers that matter

When people ask about “average retirement income,” they often mean one of three things: (1) the average Social
Security check, (2) the average income for older households, or (3) how much retirees actually spend. Here are
all threebecause each tells a different part of the story.

Notice the tension? Spending is often higher than the median older-household income, and Social Security alone
typically doesn’t cover an “average spending” lifestyle. That gap is where pensions, savings, part-time work,
and smart planning come in.

So… what is a “good” monthly retirement income in 2025?

A “good” number isn’t the biggest number. It’s the number that lets you:
(a) pay for your essentials, (b) handle healthcare without panic-refreshing your bank app,
(c) cover taxes, and (d) still have money for the fun stuff that makes retirement feel like
retirement (travel, hobbies, grandkid spoiling, or finally buying the fancy olive oil).

In practice, many households land in one of these three “good” bands:

1) Modest but stable: $2,500–$4,000/month

This is often realistic when housing costs are low (home paid off, or low rent), you’re in a lower-cost area,
and you keep lifestyle upgrades under control. Social Security may cover a large share hereespecially for
coupleswhile savings fill the gaps.

2) Comfortable and flexible: $4,000–$7,000/month

This range can support a typical middle-class lifestyle with room for travel, dining out, and higher healthcare
costs as you age. It’s also close to that “average spending” benchmark for older householdsso it tends to feel
normal in day-to-day life.

3) Premium lifestyle (and premium choices): $7,000–$12,000+/month

More travel, more dining out, more gifting, higher taxes, and often higher housing costs. This level usually
requires substantial savings, pensions, business income, real estate income, or a combination.

The key point: “good” is personal. If your basics cost $2,700/month and you’re happy at home with friends,
a $3,500/month plan can be great. If your dream is “two international trips a year plus helping the kids,”
your “good” number might be $8,000/month.

Where retirement income actually comes from

Most retirees don’t rely on a single source. In U.S. survey data, Social Security is the most common source of
retirement income, but many retirees also report pensions, investment income, or even wages (yes, “retired” can
mean “working a little”).

Social Security: the paycheck that shows up even when you’re in pajamas

Social Security is the foundation for many households. In 2025, the average retired-worker benefit is around
$2,000 per month, and the “estimated average” for all retired workers after the 2025 COLA is around $1,976/month.
The maximum benefit for someone retiring at full retirement age in 2025 is much higherabout $4,018/monthbecause
it depends on your earnings history and when you claim.

Two Social Security moves can materially change your monthly retirement income:

• Delay claiming (if you can): Delaying can increase your benefitmany sources cite about an
  8% per year boost for each year you delay between 62 and 70.
• Coordinate as a couple: Couples can often optimize when each spouse claims to improve total
  household lifetime benefitsespecially if one spouse has a much higher earnings history.

Also, don’t ignore “boring” details that affect your net check: in 2025, the Social Security taxable maximum
(the earnings cap subject to Social Security payroll tax) is $176,100an important number for high earners who
are still working.

Pensions: the endangered species that still pays the bills

Traditional pensions are less common for new retirees than they used to be, but they’re still a huge stabilizer
for households that have them. A pension turns retirement into “income planning” instead of “withdrawal strategy
gymnastics.”

401(k)s, IRAs, and other savings: your DIY pension (with more settings)

For many Americans, retirement savings accounts are the engine that turns “I stopped working” into “I’m still
eating.” This is where rules like the “4% rule” enter the chat.

A popular framework is dollar-plus-inflation: withdraw a percentage in year one, then adjust for inflation.
The classic “4% rule” is a common example, and large financial institutions often discuss it as a starting point,
not a guarantee. Some guidance suggests a withdrawal range around 4%–5% depending on assumptions; others argue
for flexibility based on markets and your time horizon.

Work in retirement: not everyone’s plan, but surprisingly common

Many retirees earn at least some income after “retiring,” whether that’s consulting, seasonal work, a small
business, or part-time employment for structure and benefits. For some, that income isn’t about survivalit’s
about funding travel, delaying withdrawals, or getting health coverage until Medicare.

Healthcare: the budget category that loves plot twists

If retirement had a “most likely to surprise you” award, healthcare would win by a landslide.

In 2025, the standard Medicare Part B premium is $185 per month, and the Part B deductible is $257. That’s just
Part B. Many retirees also pay for Part D drug coverage, Medigap or Medicare Advantage options, dental/vision,
and out-of-pocket costs.

Spending data for older households shows healthcare is a meaningful line item. A rough benchmark for age 65+
healthcare spending is around $7,799 per year (about $650 per month) on average. Your number could be far lower
(healthy year, great coverage) or far higher (chronic conditions, more out-of-pocket needs).

Translation: when you set a “good monthly retirement income,” build in a healthcare buffer. Your future self
will thank youpossibly while holding a tiny cup of water after a routine lab test.

The rules of thumbuseful, but not magic spells

Retirement planning has a few famous “rules.” They can be helpful as a starting point, but they’re not one-size-fits-all.
Use them like training wheels, not like a steering wheel.

The 70%–80% income replacement rule

You’ll often hear that you need about 70%–80% of your pre-retirement income to maintain your lifestyle. The logic:
many people have lower expenses in retirement (no commuting, no payroll deductions for retirement savings, sometimes
a paid-off home). But it can be wildly wrong if you plan to travel more, help family financially, or face higher
medical costs.

The 4% rule (and its more realistic cousin: “the flexible plan”)

The 4% rule is frequently misunderstood. Properly used, it’s about choosing an initial withdrawal amount based on
your portfolio, then adjusting over time. Some institutions present it as a high-probability framework over a long
retirement horizonwhile also emphasizing flexibility and periodic review.

The 25x rule

“Have 25 times your annual portfolio-funded spending saved” is basically the 4% rule wearing a trench coat.
It’s a useful way to translate spending into a savings target, but it assumes a lot about markets and time horizon.

Bottom line: rules help you estimate. A budget helps you decide.

How to calculate your own “good monthly retirement income” in 5 steps

Step 1: Start with your baseline monthly expenses (the non-negotiables)

List the essentials you must cover monthly:
housing (rent/mortgage, property tax, insurance), utilities, groceries, transportation, basic subscriptions,
and minimum debt payments.

Step 2: Add healthcare and insurancethen add a cushion

Use your expected Medicare costs and supplemental coverage, then add a buffer. If you’re 62 today, remember you
may have pre-Medicare insurance costs for a few years, which can be much higher.

Step 3: Add taxes (because “gross income” is not your friend)

Social Security may be partially taxable depending on your total income, and withdrawals from traditional
retirement accounts are generally taxable. If you’re not sure, estimate conservatively (and consider professional
helptaxes are a great place to pay for expertise).

Step 4: Add your “life is worth living” category

Travel, hobbies, dining out, gifts, experiences, and the occasional “I deserved this” purchase. This category is
often the difference between a retirement that works on paper and a retirement you actually enjoy.

Step 5: Stress test the plan

Run three scenarios:
Normal year, bad market year, and high healthcare year.
A “good” monthly retirement income is one that survives the stress test without forcing you to live on ramen
(unless you genuinely love ramenno judgment).

Examples: what “good” can look like in real monthly budgets

Example A: Paid-off home, moderate lifestyle (target: ~$4,000/month)

• Housing (tax/insurance/maintenance): $800
• Food + household: $700
• Transportation: $450
• Healthcare (premiums + out-of-pocket buffer): $750
• Utilities + phone + internet: $300
• Fun + travel fund: $600
• Taxes + misc buffer: $400

Total: about $4,000/month. In this setup, a couple might cover a large chunk with Social Security and use
portfolio withdrawals for the rest.

Example B: Renting in a higher-cost area (target: ~$6,500/month)

• Housing (rent + insurance): $2,500
• Food + household: $900
• Transportation: $600
• Healthcare: $900
• Utilities + phone + internet: $400
• Fun + travel + gifts: $800
• Taxes + buffer: $400

Total: about $6,500/month. Housing is doing most of the heavy lifting hereso lifestyle choices and location matter a lot.

How much savings do you need to generate that monthly income?

Once you estimate your monthly spending, the next question is: how much of that needs to come from your savings
(as opposed to Social Security, a pension, or work)?

A quick, back-of-the-napkin method: if you use a 4% starting withdrawal framework, every $1,000/month of
portfolio-funded income corresponds to roughly $300,000 in retirement savings:

Important: this table is for income from your portfolio. If Social Security covers $3,500/month for a
couple, and your spending target is $6,500/month, you may only need $3,000/month from savingsnot the full $6,500.

Taxes and RMDs: the “fine print” that becomes very not-fine

If you have traditional IRAs or many workplace retirement accounts, Required Minimum Distributions (RMDs) can shape
your retirement income plan. In general, RMDs are required starting at age 73. That can affect taxes and the timing
of withdrawalsespecially if you’re also taking Social Security and have other income.

Planning ideas people commonly explore (often with a professional):

• Tax diversification: balancing taxable, tax-deferred, and Roth accounts.
• Withdrawal sequencing: deciding which accounts to tap first for a better after-tax result.
• Roth conversions: potentially shifting some future taxable withdrawals into a Roth bucket (trade-offs apply).

Five ways to boost your monthly retirement income (without winning the lottery)

1) Delay Social Security if it’s feasible

Delaying can increase your monthly benefitsometimes meaningfully. This can reduce the burden on your portfolio
later in retirement.

2) Reduce fixed costs before retiring

Paying off high-interest debt, downsizing, or refinancing insurance costs can permanently lower the monthly income
you need. Lower “required spending” equals a stronger plan.

3) Build a “retirement paycheck” strategy for withdrawals

Consider how your withdrawals will behave in good markets and bad. Many strategies encourage a review at least
annually rather than setting a number once and never touching it again.

4) Plan for healthcare like it’s a subscription you can’t cancel

Include Medicare premiums, supplemental coverage, and an out-of-pocket cushion. Healthcare planning is one of the
most practical ways to prevent a “good” income from becoming a “tight” income later.

5) Keep a small income lever (even if you don’t “need” it)

Part-time work, a side gig, seasonal consulting, or rental income can provide flexibilityespecially during the
first decade of retirement when sequence-of-returns risk matters most.

Final answer: what’s a good monthly retirement income in 2025?

If you want a simple headline number: many retirees will aim somewhere around $4,000–$7,000 per month
for a comfortable, flexible lifestyleespecially if they’re paying for housing and want room for travel and healthcare.
A “good” number can absolutely be lower (especially with a paid-off home and simple tastes), or much higher (if your
lifestyle and tax picture demand it).

The better answer is the one you can use: a good monthly retirement income in 2025 is the amount that covers your
essentials, healthcare, taxes, and joywith a cushionwhile keeping your withdrawal strategy sustainable for
your time horizon.

Experiences from the real world: what “good retirement income” feels like day to day (and why it’s not just math)

People love asking, “What’s a good monthly retirement income?” because they want certainty. But retirees often
describe “good” in a way that’s less about a number and more about a feeling: ease. Ease is when you
can pay the bills, handle the occasional surprise, and say yes to the things that matterwithout constantly doing
mental subtraction at the grocery store.

One of the most common experiences is what you might call the paid-off-home superpower. Retirees who
enter retirement without a mortgage often describe an immediate shift in what “good” means. It’s not that they’re
suddenly wealthy; it’s that their fixed monthly obligations drop. That lower baseline makes Social Security feel
bigger, portfolio withdrawals feel smaller, and unexpected costs feel less terrifying. In contrast, retirees who
rent in high-cost areas often talk about retirement income in “housing-first” terms: if rent jumps, everything else
becomes a negotiation. Same age, same hobbies, totally different definition of “good.”

Another recurring theme is the “I didn’t realize how much health would shape my budget” moment.
Even retirees who planned carefully can be surprised by how healthcare costs behave over timepremiums, prescriptions,
dental work, hearing aids, physical therapy, and the random stuff that shows up after you’ve been an adult for
several decades. Many retirees say the most valuable part of their plan wasn’t the exact forecast; it was the
healthcare buffer. That cushion turns a bad year into an inconvenience instead of a crisis.

Then there’s the experience of discovering your spending pattern isn’t flat. A lot of retirees describe an early
retirement phase that’s more expensive than expected: travel, home projects, eating out, visiting family, trying
new hobbies, joining clubs, upgrading gear (“Apparently I’m a cyclist now?”). Later, spending can dip as routines
settle in. And later still, it can rise again if health needs increase. The “good monthly income” that works best
is the one that acknowledges this realitymaybe you plan for higher spending early, moderate mid-retirement, and a
stronger healthcare reserve later.

A surprisingly common story is the “one more year” decision. Some people work an extra year not
because they’re behind, but because they want to reduce risk. An extra year of earnings can mean: more savings,
fewer withdrawal years, and potentially a higher Social Security benefit if claiming is delayed. Retirees who did
this often say it bought them peace of mindand reduced the pressure to optimize every withdrawal down to the last
decimal place. Of course, others retire as soon as they’re able and say the trade was worth it because time and
health are the real nonrenewable resources. Either way, “good” is as much values-based as it is financial.

Finally, there’s the “joy budget” realization. Many retirees initially build a plan that covers essentials and
feels responsiblebut leaves little room for the things that make retirement meaningful. Over time, some adjust
their target upward (or reprioritize spending) because they realize retirement isn’t a contest to see who can spend
the least. The happiest plans often include a deliberate line item for joy: travel, experiences, gifts, learning,
charity, or simply time with people you love. Ironically, naming that category can reduce guilt spending and help
retirees stay on trackbecause they’re not constantly fighting themselves.

So if you’re looking for the “right” number in 2025, remember this: a good monthly retirement income is one that
supports your lifenot just your spreadsheet. Use the benchmarks, build a personal budget, stress test it, and keep
a little margin for the messy, beautiful reality of being human.

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