When planning for retirement, it’s essential to understand how the average American prepares for it — and how those numbers compare to your own plan. Knowing the averages for savings, retirement age, Social Security benefits, healthcare costs, and lifestyle spending gives you a realistic benchmark for what to expect.

While these averages don’t define what your retirement should look like, they help paint a clear picture of what’s typical — and where the biggest financial risks lie.

The average retirement age in the United States is 62, though the reasons people retire vary widely — from financial readiness to health, job satisfaction, or caregiving responsibilities. About half of Americans retire by 65, the age when Medicare eligibility begins and Social Security becomes a core income source.

Many older adults now delay full retirement or take part-time roles — not only for financial reasons but to stay active and engaged. As of 2025, approximately 20% of adults aged 70–74 remain in the workforce.

Retirement Milestones and Key Ages

When Do Americans Retire?

While few retire before 60, a growing number work past 67, often to maximize Social Security and employer benefits.

Average Life Expectancy and Longevity Data

The average life expectancy in the U.S. is 77 years — 74 for men and 79 for women. But averages can be misleading: a healthy 60-year-old has a 50% chance of living another 25 years or more. That means your retirement savings may need to last 25–30 years.

Here’s the likelihood that a 60-year-old will reach certain ages:

Longevity is one of the most underestimated risks in retirement planning — living longer than expected means needing more income, healthcare, and support later in life.

Most Americans fall short of recommended savings goals. According to recent Federal Reserve data, the median retirement savings for households nearing retirement (ages 55–64) is around $320,000. While that may sound reasonable, it often translates to less than $1,500 a month in sustainable withdrawals.

Savings by Range

This means nearly half of retirees have less than $100,000 saved — leaving them heavily dependent on Social Security.

Debt in Retirement

Many Americans enter retirement carrying some form of debt, which directly impacts their financial stability and overall net worth. About 60% of retirees aged 65 and older still owe money, with mortgages making up roughly three-quarters of their total debt. Around 38% of homeowners aged 65–74 and 30% of those 75 and older continue to have mortgage payments, while others carry balances on credit cards, auto loans, or personal loans. Non-mortgage debt averages around $11,000 for retirees and often carries higher interest rates, reducing the income available for essentials like healthcare and daily living. Since debt lowers net worth, it’s crucial for retirees to factor it into their financial planning—prioritizing the payoff of high-interest loans, evaluating mortgage options, and ensuring that retirement income can comfortably cover both living costs and remaining debt obligations.

Net Worth: The Bigger Picture

Savings alone don’t tell the full story. Many retirees’ wealth is tied up in their homes. Home equity is a major component of net worth. The median homeowner’s equity was about $198,000 in 2022. Including real estate and other assets provides a more accurate view of retirement readiness.

Homeownership remains the largest asset for most retirees. While this adds stability, it can also mean that wealth is “illiquid,” limiting flexibility unless the homeowner downsizes, refinances, or uses a reverse mortgage.

For most Americans, retirement income comes from a combination of Social Security, pensions, personal savings, rental income, and part-time work. However, Social Security remains the foundation of retirement income — nearly nine in ten retirees receive it, and for many, it represents their primary source of support. Yet, Social Security alone rarely covers all living expenses, highlighting the importance of additional income sources such as savings, pensions, or part-time employment.

While the average total income per retiree approaches $57,000 per year, the median — or what most retirees actually live on — is closer to $30,000 per year. This large gap highlights how income is unevenly distributed among retirees: higher earners with investments, pensions, or rental properties significantly raise the average, even though most retirees live on far less.

Household-Level Income

When looking at households headed by someone age 65 or older, the combined income is typically higher, as it may include two Social Security checks or additional retirement savings. The median annual household income for this age group is around $56,000, while the mean is much higher — closer to $85,000–$90,000 — again reflecting the skew created by top earners.

Household Income Brackets for Age 65+ Households

These numbers show that while the average retiree may appear financially comfortable, 70% of older households live on less than $50,000 per year. The reality for many is modest — a combination of Social Security and small withdrawals from savings — while a smaller segment of retirees with pensions or substantial investments enjoy much higher incomes.

Social Security as a Foundation

Social Security provides steady, inflation-adjusted income and remains the most common source of support in retirement. Yet, it was never designed to fully replace pre-retirement earnings — the typical replacement rate (the share of prior income covered by Social Security) is about 40% for middle-income earners. For someone who earned $60,000 per year before retirement, that translates to roughly $24,000 in annual Social Security benefits, underscoring the importance of additional income streams.

Pensions and Employer Plans

Traditional defined-benefit pensions are becoming less common, but they still play a significant role for older retirees who worked in government or unionized sectors. About one in five retirees receives a pension averaging around $2,000 per month, often providing stable, lifetime income. For younger retirees, 401(k) and IRA withdrawals are the primary replacement, though these require careful management to avoid depleting savings too quickly.

Investments, Rentals, and Side Income

Roughly 55% of retirees draw from retirement accounts like 401(k)s or IRAs, with average withdrawals around $1,500 monthly. Some retirees supplement income through rental properties (about 11%) or part-time work (around 20%), both of which can add $1,000–$1,250 per month. However, these sources often depend on health, skillset, and local demand, meaning they can fluctuate.

Family Support and Intergenerational Help

An often-overlooked factor in retirement income is family support. Roughly 30–35% of retirees receive some form of assistance from adult children or relatives — whether through direct financial help, paying bills, or covering medical costs. At the same time, about 20% of retirees provide financial or caregiving support to family members, often grandchildren, which can strain limited budgets.

Putting It Together

For retirees with diversified income — combining Social Security, retirement savings, and perhaps a pension — living comfortably is feasible, especially if major expenses like housing are paid off. However, for those without additional savings or pensions, budgeting becomes crucial. Retirees relying mainly on Social Security often find that healthcare, housing, and inflation can quickly consume most of their income, making financial planning and supplemental savings essential to maintaining stability throughout retirement.

Healthcare costs are among the largest and fastest-growing expenses in retirement. Even with Medicare, retirees face substantial out-of-pocket costs. On average, a retired couple spends about $1,070 per month—or $12,850 per year—on healthcare, including premiums, supplemental coverage, and copays. Over the course of retirement, this adds up to roughly $300,000 per person for medical and insurance expenses alone.

Average Monthly Healthcare Costs

Long-Term Care (LTC) Costs and Needs

Long-term care (LTC) is another major cost that many underestimate. Around 48% of older adults will need some form of paid support, whether at home or in a facility. The average nursing home costs about $7,000 per month, and the typical duration of paid care is around three years—though about 20% of retirees need assistance for five years or longer.

When factoring in these potential long-term care costs, total lifetime healthcare spending can reach $400,000 per person. That means healthcare alone can consume about half of the average retiree’s Social Security income, underscoring the importance of early financial planning and supplemental insurance coverage.

At any given time, about 1.4% of seniors reside in assisted living facilities and 4% receive home health care, showing that most care is provided informally by family. The value of this unpaid care—estimated at over $500 billion annually—is a crucial yet often overlooked component of the U.S. eldercare system.

Total Healthcare Spending in Retirement

Family Support and Caregiving

The majority of long-term care in the U.S. is provided by family, not professionals.

Financially, this can mean lost work hours and out-of-pocket costs for transportation, medications, and household help. Yet, this unpaid care represents over $500 billion in economic value annually.

Retirement spending varies widely, but the average retiree household spends around $60,000 per year, according to recent data from the U.S. Bureau of Labor Statistics (BLS). This amount typically declines slightly over time as housing and work-related expenses drop, but healthcare and leisure costs tend to rise with age. Spending patterns also depend heavily on housing status, location, and desired lifestyle.

Housing Status Matters

Retirees who own their homes outright tend to have lower annual spending, with many living comfortably on $50,000–$60,000 per year. Without the burden of a mortgage, retirees are primarily responsible for property taxes, insurance, and maintenance. In contrast, renters or those living in high-cost areas may need to spend $75,000–$80,000 annually to maintain a similar standard of living, especially in urban or coastal regions. Housing remains one of the most significant retirement expenses, but homeownership provides stability and lowers overall costs.

Healthcare and Insurance

Medical expenses are another growing category of spending for retirees. Healthcare costs account for approximately 15% of total retirement spending. While Medicare covers many costs for those over 65, retirees often need Medigap insurance or other supplemental plans to cover out-of-pocket expenses. Prescription drugs, co-pays, and additional treatments for chronic conditions can quickly add up, particularly for those without additional insurance or savings to fall back on.

Travel and Leisure

Spending on travel, entertainment, and hobbies is another significant expense in retirement. Retirees spend between $7,000–$10,000 annually on leisure, often during their early retirement years, which are referred to as the “go-go years.” These years are marked by higher travel and leisure spending, but as retirees age and health may decline, this spending often tapers off in later years.

Food and Transportation

The costs of food and transportation combined account for 25–30% of total spending. These costs can vary widely depending on the region. Rising food prices and transportation expenses (such as car insurance and fuel) are a growing concern for retirees, especially those living on fixed incomes like Social Security.

Inflation’s Impact

Inflation is one of the major challenges retirees face. For those on fixed incomes, particularly those relying heavily on Social Security, inflation can erode purchasing power, especially when costs in housing, healthcare, and food outpace the typical cost-of-living adjustments. It’s important for retirees to plan ahead for rising costs in these areas to prevent financial strain.

Lifestyle Differences by Wealth

Retirement spending also varies depending on savings levels, net worth, and income sources:

The “Spending Smile” Effect

Studies suggest that retirement spending follows a “smile” pattern, with three distinct phases:

Regional Differences

The cost of living plays a significant role in determining how much retirees need. Those living in low-cost-of-living states, such as Texas, Florida (outside major metros), and Arizona, can live comfortably on $50,000–$60,000 per year. In contrast, those residing in high-cost areas, like California, New York, or coastal cities, may need $80,000–$100,000 or more annually to maintain a similar lifestyle.

Family and Financial Support

About 25–30% of retirees either provide or receive help from family members. Some adult children provide financial support or caregiving assistance, while others may rely on retirees for housing or other living expenses. These intergenerational exchanges of money and time can significantly affect both the spending patterns and savings longevity for many retirees, particularly those with limited financial resources.

About 3% of U.S. retirees live abroad, often stretching their dollars further in lower-cost countries. An increasing number of Americans are choosing to retire outside the United States, with the allure of lower living costs, better weather, and improved healthcare systems being the primary drivers of this trend. As of recent estimates, approximately 760,000 U.S. retirees live abroad, receiving Social Security benefits. This growing trend reflects a desire for a more affordable and comfortable retirement lifestyle.

Among all U.S. retirees, about 17% express an interest in retiring abroad, and this percentage continues to rise, especially as more Americans explore international destinations for their retirement years. Popular destinations for U.S. retirees include countries with lower costs of living, beautiful climates, and accessible healthcare. The most favored countries among American retirees include Mexico, Costa Rica, Portugal, Spain, and Panama.

Top Countries for U.S. Expats in Retirement

Here’s a breakdown of some of the top countries where American retirees are settling and the percentage of expats in these locations:

Why Retire Abroad?

The appeal of retiring abroad is largely driven by the opportunity to enjoy a more affordable lifestyle without sacrificing quality of life. In countries like Mexico and Costa Rica, retirees can stretch their retirement savings further due to lower living and healthcare costs. In addition, many of these countries offer well-established expat communities, making it easier for retirees to settle in and connect with others who share similar experiences.

Moreover, countries like Portugal and Spain provide access to high-quality healthcare systems that are more affordable than in the U.S., a critical factor for many retirees as they age. The weather, cultural experiences, and slower pace of life are also significant attractions, especially for those seeking to escape the stress of living in the U.S.

Retiring abroad may not be for everyone, but for many American retirees, it represents an exciting opportunity to live a fulfilling life in a welcoming and cost-effective environment. As the trend continues to grow, more U.S. retirees will likely choose to take advantage of these global retirement opportunities.

The statistics surrounding retirement in the U.S. reveal a mixed picture. While some Americans have saved enough to retire comfortably, the majority have not. The average savings of retirees is far below what most financial planners recommend, leaving many to rely heavily on Social Security and their ability to work longer. Healthcare costs in retirement are rising, and many retirees will find that these expenses can quickly drain their savings.

For those nearing retirement, understanding these averages can help provide clarity on what to expect in your later years. If you are not on track to meet these averages, it’s important to start making adjustments now, whether by saving more, delaying retirement, or seeking professional financial advice.

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