Figuring out how much monthly income you will need in retirement is not as simple as picking a number. Costs change, markets move, and what you want from daily life can evolve over decades. Inflation remains modestly above the Federal Reserve’s long‑run goal and medical costs keep rising, which is pushing many retirees to revisit their budgets. A typical retiree household spends around $5,000 per month across housing, health care, travel, and leisure, yet actual needs vary widely. The goal is not a perfect forecast, but a plan that can flex as prices and priorities shift.
Social Security is the floor, not the ceiling
Social Security provides a vital foundation, but it rarely covers everything. The average monthly benefit in 2025 is $1,976, which will not bridge the gap for most households whose spending exceeds that figure. Even with two benefit checks in a married household, many retirees still need additional income from savings, part‑time work, or other sources. Social Security is best viewed as the dependable base layer of your retirement income plan. The rest of the strategy should focus on filling the gap between your essential costs and your desired lifestyle.
What counts as a good monthly retirement income
There is no universal number because location, lifestyle choices, and health status do most of the heavy lifting. A common planning guideline is to target 75% to 85% of your final year’s gross earnings. For example, a worker earning $120,000 before retiring would aim for about $90,000 to $102,000 per year, which is roughly $7,500 to $8,500 per month. That range is a starting point rather than a rule, especially if you will have a paid‑off mortgage or expect higher medical spending. Build your estimate with today’s prices, then test it against higher inflation to see how resilient the plan feels.
How retirees really measure up
Average and median income figures show why many retirees fall short of the 75% to 85% guideline. For individuals, the average annual retirement income is about $60,000, while the median sits closer to $47,000, or about $3,900 per month, which is a better gauge of the typical experience. Married couples fare higher with an average around $100,000 per year, or about $8,300 per month. These numbers suggest that many households need careful planning, smart claiming strategies, and supplemental income to match their target lifestyle. Knowing where you stand against these benchmarks can help you calibrate savings withdrawals, spending, and risk.
Why geography and lifestyle matter most
Where you live can change your monthly retirement income needs as much as your total investments. High‑cost metros and states require more money to maintain the same standard of living that a lower‑cost region can deliver with less. Your housing status also plays a major role, since property taxes, insurance, and maintenance can climb even after the mortgage is gone. Lifestyle choices such as frequent travel, dining out, or supporting adult children will raise the bar, while a simpler routine can reduce it. Leave room for unpredictable expenses that can reshape needs, including long‑term care, major home repairs, and family support.
Ways to broaden and stabilize retirement income
Annuities can act like a personal pension by offering guaranteed income for a period or for life. An immediate annuity starts payments right away, which can help cover fixed bills. A deferred annuity delays payments until a future date, which can be useful for longevity protection in your 70s or 80s. The trade‑offs are often reduced liquidity and the need to evaluate insurer strength and fees, so consider how an annuity fits alongside Social Security and investments.
Reverse mortgages allow homeowners age 62 and up to convert part of their home equity into cash flow as monthly payments or a line of credit. Repayment occurs when the home is sold, the borrower moves out permanently, or the borrower dies, which makes the tool most suitable for people with substantial equity but limited liquid savings. Social Security optimization is another powerful lever. Delaying benefits until age 70 increases monthly payments by about 24% versus claiming at full retirement age, which for most people is between 66 and 67. High earners who wait until 70 can receive more than $5,000 per month in 2025. Diversifying income streams and adding inflation‑resilient assets can help cushion market swings and rising prices instead of relying on a single savings account.
A simple process to right‑size your target
Start by tallying essential expenses such as housing, utilities, food, insurance, and medical needs. Layer on discretionary goals like travel, hobbies, and gifting so you can see where trade‑offs might be needed in lean years. Add inflation assumptions and set aside reserves for surprises such as health events or big‑ticket repairs. Then map guaranteed or highly reliable income sources, including Social Security, annuities, and pensions, against those fixed costs. Fill the remaining gap with investment withdrawals, part‑time work, or a home equity solution, adjusting the mix as markets and needs change.
The bottom line
A good monthly retirement income is the amount that reliably covers your essentials, supports your preferred lifestyle, and adapts to shocks. There is no magic figure that fits every household, but there is a process that leads to confidence. Use Social Security as your base, then blend multiple sources to add stability, growth, and flexibility. Aim for a plan that can weather inflation and market volatility so you can live comfortably and keep control over your financial choices.
