The States With the Lowest & Highest Average Monthly Retirement Income

Average retirement income varies widely across the U.S. In the state with the highest-income retirees, the average retired household brings in more than twice as much in the state with the lowest retirement income figures. Differences are due to local variations in wages and salaries,  cost of living, tax rules, the incidence of pension plans and other factors. Knowing your state’s averages can provide helpful context when evaluating your own retirement readiness. Knowing how other states stack up can help you decide where to retire. Discuss with a financial advisor how your retirement savings compares with your state’s averages.

Retirement Income Varies Widely By State

The average household retirement income in the United States is $27,617, according to an analysis by Wisevoter of data from the U.S. Census Bureau’s American Community Survey. However, depending on where you live, your local average may be much higher or lower.

When broken down by individual states the averages range from a low of $20,542 in Indiana to a high of $43,080 in the District of Columbia. Retirees in the District of Columbia also bring in significantly more than those in the second-ranked state, Alaska, with $36,023.

The District of Columbia likely stands out in this ranking in part because it is a high-cost urban area. It also has many well-educated high-income earners, including retired government employees with generous government pensions.

In general, Northeast and West Coast states have higher incomes. The Southern and Midwestern states tend to lag behind when it comes to average retirement income.

Here’s a full breakdown of the average retirement income by state:

Using State Average Retirement Income Figures

Average retirement incomes by state can help guide retirement planning. Here are three common ways someone planning for retirement could use these figures:

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Limitations of Planning With Average Retirement Incomes

While averages provide helpful context, your specific circumstances likely are more important considerations than how your state compares. Within each state, there may be many outliers who earn much more or less than the average, and you may be at one extreme or the other.

The cost of living, taxes and lifestyle you desire in retirement could also differ greatly from the average in your state. In that case, you would need more than the average income to retire comfortably. The averages give useful perspective. However, your specific retirement readiness depends on your own income, assets, expenses and retirement timeline.

Bottom Line

State averages for retiree income vary widely, likely due to differences in costs, wages, taxes, pensions and other factors. Information about averages can guide savings plans and suggest locations to retire. Every retirement is unique, however. Timing, income, expenses and sources of retirement income all determine retirement income. Two people with the same-sized nest egg but different planned retirement ages or pension benefits could have much different incomes.

Financial Planning Tips

• Have a financial advisor run projections to estimate your potential retirement income and shortfalls. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Photo credit: ©iStock/fizkes, ©iStock/DragonImages, ©iStock/Dean Mitchell

The post What Is the Average Monthly Retirement Income in Every State? appeared first on SmartReads by SmartAsset.

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