Are Your Retirement Savings Sufficient: An Assessment of Average Retirement Incomes.

**How Much Savings You Need for Retirement and Tips to Boost It**

Wondering if you have enough money tucked away for retirement? By comparing your savings with the typical retirement income, you could better plan and save for a comfortable and worry-free retirement.

Let’s break down some important terms, here’s what “mean” and “median” incomes mean:

– **Mean Income**: It’s an average, calculated by adding up incomes of many households and then dividing by the number of households. But, if a few households earn a big chunk, it can inflate the average.
– **Median Income**: This lines up each household’s income in order from smallest to largest, and the middle number becomes the average. This often yields a more realistic result.

In most cases, median income is lower than mean income, and it should be your go-to when checking if you’re ready for retirement.

But remember, two more things matter:

1. **Where You Live**: The cost of living varies across different regions. So, check out average retirement incomes in your locality to see how your savings compare.
2. **Your Age**: As people grow older, their income usually decreases. Thus, average income can also change with age.

In 2017, these were the mean and median incomes (note that these numbers might be slightly out-of-date but should give you a rough idea):

– Aged 55-59: $73,645 (median), $103,423 (mean)
– Aged 60-64: $63,919 (median), $89,882 (mean)
– Aged 65-69: $54,124 (median), $79,772 (mean)
– Aged 70-74: $46,797 (median), $68,052 (mean)

When you retire, income can come from different sources:

1. **Social Security**: A reliable source for many, adjusted for inflation. Around 30% of Americans heavily rely on this.
2. **Work Income**: Because of a decrease in other retirement investments, Americans are delaying retirement or working part-time. About 22% of retired Americans work part-time.
3. **Asset Income**: Income from rental properties or book royalties is a retirement income for about 6% of Americans.
4. **Pension Plans and Government Sources**: Around 24 percent of Americans count on employer-sponsored plans for their retirement years.
5. **Reverse Mortgages**: For homeowners aged 62 or older, they can get income from reverse mortgages.
6. **Stocks**: About 17% of Americans invest in stocks or mutual funds for retirement income.
7. **Home Equity**: Roughly 25% of Americans plan to use their home equity to fund their retirement.
8. **Annuity**: Around 7% of Americans use an insurance product or an annuity to fund their retirement.
9. **Inheritance**: Only 7% of Americans rely on inheritance to fund their retirement.
10. **Defined Retirement Contribution Plans**: Many Americans rely on employer-contributed plans like 401(k)s to support their retirement, forming the primary source of income for 42% of retirees.

Wondering whether your retirement savings will last? Here are some tips to help you boost your savings:

1. Set clear retirement goals and form a financial strategy with an advisor’s help.
2. Stick to your spending and income plan to maximize savings.
3. Start putting money into a 401k or IRA early, and make the most of your annual contributions while you still have a regular income.
4. Use a self-directed IRA for a more hands-on approach to investing.
5. If you’re over 50, consider catch-up contributions, which let you save up to $6,000 extra every year.

Keep in mind, your income will probably decrease after retirement. If you don’t want to keep working forever, start saving and investing now. Be sure to compare all your options and keep an eye out for hidden charges associated with certain investment products.