Average Retirement Income by Age 65. Are you on track?

The mismatch between retirement savings and spending has led some to declare a “retirement crisis.”

Retirees get their income from a number of sources. For some, it's a combination of pension payments, retirement plan withdrawals, investments, Social Security, and ongoing work.

In today's video we're going to explore three questions:

1. What are the average expenses in retirement?
2. What is the average income in retirement (both the mean and the median)?
3. Should you be concerned about your retirement income?

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*ABOUT ME*

I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission — pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money — so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!

📅 *THE BASICS OF RETIREMENT PLANNING*

Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.

Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.

Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.

Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund — especially if you have an employer retirement plan that matches any portion of your contributions.

Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.

Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.

❣ *SPONSORED* No, this video was not sponsored.

⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome

[Red]

Kevin. Appropriate topic. Born very poor we devoted out life to not retiring poor. We are upper class as Pew Research defines it. In our 70s, we eat well and have a nice 4bdm home with pool. Life is good. Trick is to live below your means and keep out of debt.

[owen]

I think I'm good, SS and pension $80k per year, house paid off.

[dyates]

I'm sixty six, and retired about a year and a half ago. I have very low requirements with regard to income. I only need around three thousand a month to live comfortably, so I only need to draw around a thousand a month from my retirement accounts, and have a pretty decent retirement account and also a good amount in liquidity. I think the key is living within your means and trying to get, and stay, as debt free as you can.

[Linda-zvky]

My grandkids would come and do work around our house, but they never got paid. Their parents wanted to teach them about being respectful of the family especially grandparents. We however open Roth IRAs for them and made small contributions to the accounts each Christmas. Now it’s up to them to continue, which they are doing. Although one is better at saving than the others. Point is we started them out on the right path

[billb]

The median retirement income has a bit more relevance to the average retiree.

[mmorrisfamily]

I love the way financial advisors disparage “DIY” investors in one breath, and then obfuscate and complicate everything in an attempt to sell their services.

[ontheroadrvstyle]

I am 68 years old and still working full-time. Divorce makes a big difference. She gets about 60 percent of what you have.

[eclecticclub]

I just started watching your videos. I think you're clear and concise in your presentation. These retirement topics can be are complicated and the future is unpredictable. I think your videos will help people plan and adapt when those plans ultimately need changing. Keep up the good work.

Thanks for making Right Capital available to try (in your ROTH and SS videos). It was interesting and fun to examine the Roth conversion and various SS claim age scenarios. I can completely recommend that people at least try the Right Capital software if only for that.

Most trial versions of retirement software that I've looked at do not provide their Roth conversion feature. I get it, they want you to buy/subscribe to their products. Lack of availability made me build a spreadsheet to do to simulations. Though my output was much less pretty and not very intuitive, I'm happy to see that I came to similar conclusions as Right Capital. It was a complicated spread sheet to put together, so having software that is moderately easy to use like Right Capital will help a lot of people.

[roncraft]

I am a diy investor and I am my own financial advisor. I also help my kids with their investments as well as grown grand kids. We are all doing great. My greatest frustration is that I fear my family isn’t financially literate enough to go it on their own. Working on that all the time.

[DiFinni]

Yeah, average means nothing when it comes to retirement anything, always the median. So many people are very far behind.

[cruz]

Retired at 60 when Covid hit. Glad I have a pension and a 2% yearly cost of living increase. Food going up didn't help but I get by

[StevenAbbott]

Here it is 2024 and still my parents and grandparents' stories about the great depression are vividly remembered.

[kaitlyncranwick]

40 now, and everything is paid for. Fortunately, I had a college economics teacher who taught me a lesson when I was 18 years old. That lesson was: you can't buy something else for every purchase you make. Having multiple sources of income is prudent, as is living within your means. I have a 13-year-old vehicle because it is all I need, I like it, and I can do whatever I want with it. My net worth is $900k, and I can pay my bills without stress, but I don't live like I have that. I have no complaints.

[ybbgimg]

it's not the income, it's the outgo. at 66, i have cashed out of
the market and taking my house sale money to buy an off grid
homestead. closing the gate and saying good luck to you all.
ss at 70 and that will be annuity gravy. an income pond, no streams.
i'm good.

[dbail]

Disconnect from reality. My frist question to guys like this. What is the percentage of your clients that are millionaires or close? Like 40% of people don’t even have a 401k or similar. If you can make 80% of your working income in retirement you’re in good shape. 75k? I didn’t avg that when I worked construction.

[dovoso]

Hi, a very interesting video. Can you make one on the pros and cons of HELOC or similar programs, for people 70+ ?

[bbbb]

How you do in retierment depends on where you live. If you live in NY or Cal. good luck. I live in the south and my property tax is less than 1000 dollars a year. All other cost are also less. Ben

[peterezzell]

Is the median pension the median of those who have pensions, or does it include people with zero pensions?

[alanjackson]

I really like your videos. They are clear, detailed, and helpful. Thank you for that. I wish I had a local financial planner like you where I live.

With that said, I have always followed a passive index investment strategy. I have tried to minimize the investment expense rather than pay a manager to try to beat the market. Is is possible to create a holistic retirement plan but eschew active money management?

[brassj]

Well the first thing you need is to work out what your budget will be like when you retire based on todays figures. I know I won't have a mortgage so i know what my annual budget will be. Next, I know what guaranteed income I will be getting from different sources and can project how much my investments will be based on historical data, That's the best you can hope for. Once you have a baseline, you can work out your average tax rate and estimate what your net income will be. Divide your net income by your expenses and if the answer is 1.25 or more then you are probably going to be OK. For example, if your net income is $40, 000 and your expenses are $32, 000 per annum then you have wiggle room for unexpected bills and can use the disposal income for treats like trips or eating out