What Is a Good Monthly Retirement Income

For most retirees, monthly income matters more than net worth. You may have spent decades building your retirement savings, but the real question is this: what is a good monthly retirement income that allows you to live comfortably, meet your financial needs, and support your retirement lifestyle without running out of enough money? At Towerpoint Wealth, we help our clients answer that question using smart planning, personal insights, and objective analysis of all retirement income sources.

Understanding What Is a Good Monthly Retirement Income

There is no one-size-fits-all number. A good monthly retirement income depends on your pre retirement income, lifestyle choices, healthcare expenses, geographic location, and retirement goals. However, most financial planners agree that you will need 70 to 80 percent of your pre retirement income to maintain your standard of living. That rule helps define a comfortable monthly retirement target.

For example, if your annual income before retirement was $120,000 in today's dollars, you may need between $84,000 and $96,000 per year in retirement, or about $7,000 to $8,000 in monthly retirement income.

Monthly Retirement Income Benchmarks in 2025

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According to the U.S. Census Bureau and data from the Social Security Administration, the average retirement income in the United States in 2025 for individuals is approximately $60,000 per year, or $5,000 per month. However, that includes both high earners and lower-income retirees. The median income, often a better representation, is lower, closer to $47,000 annually, or about $3,900 per month.

For couples, the numbers are higher. The average retirement income for married households is around $100,000 annually, or about $8,300 per month. This includes Social Security income, retirement accounts, pensions, and other sources. These averages can serve as a benchmark, but your actual needs may differ depending on your particular situation.

Breaking Down Retirement Expenses and Income Needs

The best way to determine how much monthly retirement income you need is by analyzing your expected expenses. Here are common categories most retirees should plan for:

  • Housing: mortgage, rent, property taxes, insurance, and maintenance
  • Healthcare: Medicare premiums, supplemental insurance, out-of-pocket expenses, long-term care
  • Food and utilities
  • Transportation: car payments, fuel, insurance, maintenance
  • Travel and leisure
  • Taxes on retirement income, including distributions from traditional IRAs or 401(k)s
  • Unexpected costs or emergency expenses
  • Legacy goals: gifting, charitable contributions, estate transfers

After adding up all of your expected expenses, including other costs, compare that total to the income you will receive from Social Security benefits, pensions, retirement accounts, and any other income sources.

Sources of Monthly Retirement Income

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Many retirees rely on multiple income streams to meet their monthly retirement income needs. These often include:

Social Security Benefits

Social Security remains the bedrock of retirement income for most retirees. In 2025, the average monthly Social Security benefit is about $2,000. The maximum monthly benefit for those who delay benefits until full retirement age or age 70 is over $4,800. The Social Security Administration adjusts payments annually for inflation, helping retirees keep up with rising costs.

Timing your Social Security benefits wisely is essential to maximizing this income stream. Waiting until full retirement age or later can significantly increase your monthly payment.

Pensions

While fewer employers offer pensions today, many retirees still receive guaranteed income from defined benefit plans. Pension payments are usually based on years of service, earnings history, and age at retirement. These fixed income payments provide a reliable foundation for retirement budgeting.

Retirement Accounts

Your 401(k), traditional IRA, Roth IRA, and other retirement accounts are key components of your retirement income strategy. These accounts provide flexibility, but withdrawals must be managed carefully to avoid running out of money or triggering excessive taxes.

Withdrawals from traditional IRAs and 401(k)s are considered taxable income. Required minimum distributions begin at age 73 and must be taken annually, as mandated by the Internal Revenue Service.

Investment Portfolio

Retirees may also generate income from taxable investment accounts, dividend-paying stocks, mutual funds, and real estate. The income generated may be less predictable than pension or Social Security benefits but can offer growth and flexibility. It is important to regularly invest wisely and monitor your portfolio's past performance to make informed decisions.

Personal Savings and Savings Accounts

Cash reserves and emergency funds offer short-term liquidity for unplanned expenses. While savings accounts typically generate low returns, they provide stability and can reduce the need to sell investments during market downturns.

Annuities and Other Income Streams

Some retirees choose to purchase annuities or receive a lump sum payment to provide guaranteed income for life. Others may generate rental income or draw from a reverse mortgage. These income sources can add diversity and security to your retirement plans.

Monthly Income Scenarios Based on Savings

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Let’s examine how different levels of retirement savings translate to monthly retirement income under common withdrawal assumptions:

  • $1 million portfolio: At a 4 percent annual withdrawal rate, this produces about $40,000 per year, or $3,333 per month
  • $2 million portfolio: Generates $80,000 annually, or $6,667 per month
  • $3 million portfolio: Offers $120,000 per year, or $10,000 per month

These examples assume stable economic conditions and consistent investment returns. However, future past performance cannot be guaranteed, and market volatility may impact results.

Tax Considerations and Your Monthly Income

Understanding the tax treatment of your retirement income is essential to accurate planning. Distributions from traditional IRAs, 401(k)s, and pensions are taxed as ordinary income. Social Security income may also be taxable depending on your total earnings and filing status.

Roth IRA withdrawals, qualified withdrawals from health savings accounts, and municipal bond interest are generally tax-free. Working with qualified professionals or financial planners can help you minimize taxes and increase your after-tax monthly income.

Planning for Longevity, Inflation, and Healthcare Costs

One of the greatest risks to retirement security is outliving your money. Most retirees underestimate how long they may live. Planning for 30 years or more in retirement requires accounting for:

  • Inflation rate: Even at a modest 2 percent rate, costs double every 36 years
  • Healthcare and long-term care: Expenses often rise in later years
  • Market downturns: Poor returns early in retirement can impact subsequent years
  • Unexpected events: Medical emergencies, home repairs, or family support

To mitigate these risks, Towerpoint Wealth recommends combining guaranteed income sources with flexible investment strategies, while maintaining adequate cash reserves and insurance coverage.

Monthly Retirement Income by Lifestyle Tier

Below is a table showing estimated monthly retirement income needs by lifestyle:

Retirement LifestyleEstimated Monthly Income
Basic Needs$3,000–$4,000
Comfortable$5,000–$7,000
Affluent$8,000–$12,000
Luxury$15,000+
These figures will vary depending on location, health, and personal preferences.

How to Increase Your Monthly Retirement Income

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To maximize your monthly retirement income, consider the following strategies:

  • Delay Social Security to age 70 for the highest benefit
  • Make catch up contributions to 401(k) and IRA accounts after age 50. It is important to regularly contribute to your retirement accounts to build sufficient savings.
  • Diversify investments to balance risk and return
  • Coordinate withdrawal timing from taxable and tax-deferred accounts
  • Rebalance your portfolio regularly to adapt to market changes
  • Downsize your home or reduce discretionary spending if needed
  • Consider a reverse mortgage to unlock home equity
  • Consult with qualified professionals to optimize your retirement income strategy

How Towerpoint Wealth Helps You Build a Reliable Retirement Income Plan

At Towerpoint Wealth, we specialize in creating personalized retirement income strategies that go beyond assumptions and national averages. We evaluate your retirement funds, retirement accounts, pensions, Social Security benefits, and other investments to build a sustainable monthly retirement income plan that reflects your life and your goals.

Our process includes:

  • Estimating monthly income needs based on lifestyle and expenses
  • Reviewing all income sources including fixed income and personal savings
  • Projecting taxes and required minimum distributions
  • Creating a withdrawal strategy to reduce taxable income and preserve assets
  • Monitoring and adjusting your plan based on economic conditions and changes in your life

We provide ongoing guidance and investment advice to help ensure that your income is reliable, efficient, and built to last.

Frequently Asked Good Monthly Retirement Income Questions

What is a good monthly retirement income in 2025?

A good monthly retirement income typically replaces 70 to 80 percent of your pre retirement income. For most retirees, this ranges from $4,000 to $10,000 per month, depending on lifestyle and location.

How much income do I need to retire comfortably?

To retire comfortably, many retirees need between $60,000 and $100,000 annually, or $5,000 to $8,300 per month. This varies based on personal financial needs and expenses.

What if I don’t have enough income?

You can close the gap through part-time work, downsizing, reducing discretionary expenses, or tapping into other income sources such as annuities, reverse mortgages, or Roth accounts.

When should I claim Social Security benefits?

Claiming at full retirement age (typically 67) provides a standard benefit. Delaying until age 70 increases your monthly benefit significantly. The best age depends on your health, work history, and retirement plans.

How do I reduce taxes in retirement?

You can reduce taxes by managing withdrawals from traditional and Roth accounts strategically, leveraging tax-free investments, and using tools like health savings accounts for qualified withdrawals.

Final Thoughts: Your Retirement Income Plan Starts Today

Defining what is a good monthly retirement income is not about hitting a single number. It’s about creating a flexible, sustainable, and tax-smart strategy that supports your desired lifestyle and adapts to your evolving needs. Whether your retirement income goal is $5,000 per month or $15,000, it should be based on careful analysis, accurate projections, and ongoing adjustments.

At Towerpoint Wealth, we help retirees turn their savings into a reliable monthly income they can depend on. Let’s build your retirement income plan together. Schedule your consultation today.