Arlington, Virginia boasts the highest retirement income in the United States, with residents averaging $90,140, according to a recent analysis by SmartAsset. This study found that retirees in the Washington, D.C. area have some of the highest retirement incomes nationwide, mainly attributed to pensions, IRAs, and other retirement accounts rather than Social Security.
Among the top-ranking cities, Cambridge, Massachusetts and The Woodlands, Texas followed closely behind Arlington, with retirement incomes of $79,563 and $79,539 respectively. The analysis encompassed 345 large cities and highlighted the significant disparity between retirement incomes and median household incomes, emphasizing the financial concerns faced by many retirees.
California cities such as Berkeley, Carlsbad, and Thousand Oaks made it to the top ten list, alongside Highlands Ranch, Colorado, and Naperville, Illinois. The report utilized U.S. Census data to calculate retirement incomes, encompassing income from various sources, including pension plans, IRAs, 401(k)s, and Social Security income for individuals aged 65 and above.
While retirement plans like 401(k)s and IRAs play a pivotal role in most retirees’ income, recent data from Fidelity indicated a rise in the number of retirement account millionaires. However, this group constitutes only a small fraction of total defined contribution plan accounts at Fidelity, highlighting a broader disparity in retirement savings across the population.
On average, retirement incomes across large cities amounted to $52,723, significantly lower than the median household income of $74,580. This discrepancy underscores the financial challenges faced by many retirees and the prevalent concerns about having enough savings to support themselves in retirement.
As individuals consider their retirement savings goals, reports suggest that having ten times one’s preretirement income saved by age 67 is a prudent target to maintain a comfortable lifestyle in retirement. However, with inflation impacting budgets and causing financial strain, some retirees have opted to delay full retirement by reentering the workforce part-time, seeking additional income and benefits.
SmartAsset’s findings indicate that Social Security remains a key income source for many retirees, particularly in cities like Ann Arbor, Michigan, where residents rely heavily on Social Security payments. This federal data underscores the importance of Social Security in supporting retirees, with averages payments varying based on individual work history, earnings, and retirement age.
Looking ahead, the demographic shift towards an aging population underscores the significance of Social Security benefits in providing financial stability for retirees. With nearly 68 million individuals expected to receive Social Security benefits each month this year, the role of these payments in retirement income planning remains a crucial aspect of financial security.