America's Wealth Management Show

What Is a Good Monthly Retirement Income?

By Chris Duderstadt

July 31, 2025

What Is a Good Monthly Retirement Income?

Key Points – What Is a Good Monthly Retirement Income?

  • Rethinking Retirement Budgeting 
  • Three Retirement Phases 
  • Retirement Income Streams 
  • Retirement Spending Benchmarks 
  • 7-minute Read 

What Is a Good Monthly Retirement Income? 

How  much do retirees really spend? 

Many people often envision retirement as a time of freedom, travel, and relaxation. But achieving that dream requires more than just saving. It demands thoughtful planning and a clear understanding of your future expenses. Some of the most critical questions in retirement planning are: How much money will you need each month to live the life you want? What is a good monthly retirement income? 

Schedule a Meeting Get the Retirement Plan Checklist

This article explores the nuances of retirement spending, the different phases of retirement, and how to align your financial resources with your lifestyle goals. We’ll also incorporate the latest statistics to help you benchmark your planning. 

Rethinking Retirement Budgeting: It’s Not Just About Today 

Many people begin their retirement planning by looking at their current monthly expenses and assuming they’ll need the same amount in retirement. While this might seem logical, it often leads to underestimating future needs. 

Instead, a more effective approach is to visualize your ideal retirement lifestyle. Ask yourself: 

  • Do you want to travel frequently? 
  • Would you like to own a second home? 
  • Are you planning to host family vacations or support adult children? 
  • What hobbies or experiences do you want to pursue? 
  • What do you want to do with your hard-earned savings? 

By identifying these goals, you can assign realistic price tags and build a budget that reflects your future, not just your present. 

The Three Phases of Retirement Spending 

Retirement spending isn’t linear. It typically follows three distinct phases: 

  1. Go-Go Years: The early years of retirement when you’re active, healthy, and eager to explore. Spending tends to be higher due to travel, hobbies, and lifestyle upgrades. 
  2. Slow-Go Years: As energy and mobility decline, travel and discretionary spending decrease. 
  3. No-Go Years: In later retirement, spending often shifts toward healthcare and basic living expenses. 

Understanding these phases helps you front-load your retirement budget, allowing for more spending early on and tapering off later. 

Retirement Income Streams: Diversifying Your Sources 

To support your retirement lifestyle, consider multiple income streams. Common sources include: 

  • Social Security 
  • Personal savings and investments 
  • Pension plans 
  • Traditional and Roth IRAs 
  • Workplace retirement plans (401(k), 403(b)) 
  • Rental income or home equity 
  • Annuities 
  • Part-time work or board memberships 

Diversifying income sources can provide stability and flexibility, especially when market conditions fluctuate. Make sure you understand how each of these income sources interact. Having a team of professionals help develop a plan around your retirement income streams can be critical in saving on taxes and identifying planning other opportunities.  

National Averages: How Do You Compare? 

According to recent data from SmartAsset [1] and AARP [2], here’s how retirement income and savings stack up in 2025: 

  • Average individual retirement income: $60,000/year or $5,000/month 
  • Median individual retirement income: $47,000/year or $3,900/month 
  • Average retirement income for couples: $100,000/year or $8,300/month 
  • Average monthly Social Security benefit: $1,976/month (as of January 2025) [2] 

However, these figures can be misleading. Many retirees have non-taxable income or income that doesn’t appear on tax returns, such as Roth IRA withdrawals or HSA distributions. This means actual income may be higher than reported. This is why it’s important to have a team of professionals helping you determine what a good monthly retirement income for your lifestyle is.   

Retirement Spending Benchmarks 

Based on real-world financial planning experience, here are four tiers of retirement spending: 

1. Basic Lifestyle: $4,000–$6,000/month

Covers essentials like housing, food, healthcare, insurance, and taxes. This is the minimum needed to maintain a modest lifestyle in most parts of the U.S. 

2. Comfortable Lifestyle: $6,000–$8,000/month

Includes discretionary spending such as dining out, domestic travel, hobbies, and entertainment. 

3. Affluent Lifestyle: $8,000–$12,000/month

Supports luxury travel, second homes, premium healthcare, and more frequent leisure activities. 

4. Luxury Lifestyle: $15,000+/month

Enables high-end living, philanthropy, legacy planning, and concierge medical services. 

Inflation: The Silent Budget Killer 

Inflation can dramatically affect your retirement budget. At a 4% annual inflation rate, $15,000/month today will need to be $26,500/month in 10 years to maintain the same purchasing power. 

This underscores the importance of growth-oriented investments and strategic withdrawals to preserve your lifestyle over time. 

Real-Life Planning Scenarios 

Consider a couple with $3.8 million in invested assets and a goal to spend $15,000/month in retirement. Initial projections showed only a 66% probability of success. By delaying retirement by two years, their success rate jumped to 81%. 

This example highlights the importance of: 

  • Adjusting retirement timing 
  • Prioritizing goals 
  • Running detailed financial simulations 

Learn more about this case study in our Educational Series Retiring on $15,000 a Month. 

 

 The Role of Strategic Planning 

Effective retirement planning goes beyond investment returns. It includes: 

  • Tax planning: Minimizing lifetime taxes through Roth conversions, tax-efficient withdrawals, and strategic asset location. 
  • Healthcare planning: Accounting for Medicare premiums, long-term care, and out-of-pocket costs. 
  • Estate planning: Ensuring assets pass efficiently to heirs with minimal tax impact. 
  • Risk management: Protecting against market downturns, inflation, and unexpected expenses. 

Working with a team of professionals, including certified financial planners, CPAs, and estate attorneys, can help you optimize your financial plan helping you get to the monthly retirement income that’s good for you. 

Retirement Savings by State: A Snapshot 

Here’s how retirement savings vary across the U.S. in 2025 [1]: 

  • Kansas: $195,302 average savings (2.78x median income) 
  • Hawaii: $228,870 average savings 
  • Massachusetts: $218,189 average savings 
  • Missouri: $61,032 average savings (less than one year of income) 

These disparities reflect differences in cost of living, income levels, and savings habits. 

Social Security Updates for 2025 

Key changes to Social Security in 2025 include [2]: 

These updates can impact your retirement income and should be factored into your planning. 

Final Thoughts: Define Your Retirement, Then Plan It 

Retirement is not one-size-fits-all. Whether you envision quiet days at home or globe-trotting adventures, your plan should reflect your unique goals, values, and financial situation. 

Start by asking: 

  • What does my ideal retirement look like? 
  • What will it cost? 
  • What income sources do I have? 
  • How can I my financial plan to achieve my goal? 
  • What trade-offs am I willing to make? 

With the right planning and professional guidance, you may be able to turn your retirement vision into reality. Schedule a conversation with our team today.  

SEE OUR SCHEDULE

Resources Mentioned in This Article 

Other Sources 

Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.