In 2025, determining what qualifies as a “good” monthly retirement income depends on more than just averages — it hinges on where you live, how you spend, and how long you plan to need your money. A stable income may cover your essentials, but a sustainable one should adapt to rising costs, shifting markets, and unexpected life events.
According to data reported by CBS News, monthly retirement income figures vary widely across the U.S., reflecting regional differences and individual circumstances. Estimating the right level of income requires reviewing multiple variables without relying solely on national statistics or general rules of thumb.
National Averages and Retirement Benchmarks
Let’s start with the numbers.
According to national data, retirees in the U.S. spend around $5,000 per month on average. That includes everything from housing and healthcare to groceries, transportation, and discretionary spending like travel and hobbies.
To estimate how much income you might need in retirement, many planners suggest targeting 75% to 85% of your pre-retirement gross income. For example, someone who earned $120,000 annually while working would likely need between $7,500 and $8,500 per month after retirement to maintain a comparable standard of living.
Now compare that with what retirees are actually bringing in. The average retirement income for individuals in 2025 is about $60,000 per year, or $5,000 per month. The median, which better reflects what most retirees live on, is closer to $47,000 annually — that’s roughly $3,900 per month.
For married couples, the picture is more optimistic: the average retirement income is around $100,000 per year, or about $8,300 per month.
The Role of Social Security: A Foundational Layer
While retirement income is ideally made up of several streams, Social Security remains the base layer for most Americans. In 2025, the average monthly Social Security benefit is $1,976, while high earners who delay claiming until age 70 can receive over $5,000 per month.
Yet Social Security is not designed to cover all your expenses. It’s meant to form a foundation, one that needs to be supplemented — particularly if your lifestyle includes discretionary spending or if you face significant medical or housing costs. According to the Social Security Administration itself, benefits are intended to replace only about 40% of pre-retirement income.
Inflation and Healthcare: The Moving Targets
The challenge isn’t just knowing your number — it’s making sure that number keeps pace with rising costs.
In 2025, inflation remains slightly above the Federal Reserve’s 2% target, driven in part by persistent supply chain issues and elevated service-sector prices. Retirees are especially exposed to healthcare inflation, which continues to outpace the general inflation rate. According to recent projections, out-of-pocket healthcare costs could climb by 5% annually or more, even with Medicare coverage.
This steady upward trend means your income must not only be sufficient today, but resilient enough to stretch tomorrow.
Guaranteed Income Streams: Layering for Stability
Modern retirement planning has moved away from a single-income model. Today, the strategy is all about diversification of income — sometimes called “income layering” — to guard against volatility and preserve lifestyle flexibility.
Here are several tools retirees are using to build predictable, long-term income:
Annuities: Turning Savings Into Paychecks
Annuities are insurance contracts that provide guaranteed payments, either for a specific period or for life. You can choose between:
- Immediate annuities, which start paying out shortly after you buy them, and
- Deferred annuities, which delay payouts until a future date (often to coincide with later-life needs or tax strategies).
While annuities often come with fees and limitations, they can serve as a reliable income floor — especially for those without a traditional pension.
Reverse Mortgages: Unlocking Home Equity
A reverse mortgage allows homeowners aged 62 and older to convert part of their home equity into income. The money can come in two forms: either monthly payments or a line of credit.
Critically, the loan doesn’t need to be repaid until the borrower moves out, sells the home, or passes away. This option can be especially useful for retirees who are asset-rich but cash-poor, providing liquidity without having to sell the home.
Delaying Social Security: A Built-in Bonus
Delaying your Social Security claim can increase your benefit by up to 24%, depending on your full retirement age. For high earners, waiting until age 70 can mean receiving over $5,000 monthly, providing a meaningful income boost during the later years when healthcare costs tend to rise.
Risks You Shouldn’t Ignore
A “good” retirement income isn’t just about covering monthly bills. It’s about being prepared for unexpected costs, such as:
- Long-term care, which can cost $8,000 to $10,000 per month for nursing home care
- Major home repairs, like replacing a roof or HVAC system
- Family obligations, including adult children needing financial help or caregiving costs for aging relatives
Building a flexible retirement plan means acknowledging that some of these costs will likely appear — and planning accordingly with cash reserves or insurance.
Cost of Living and Where You Retire
The geographic spread of your dollars matters. Someone retiring in Des Moines, Iowa will have a very different monthly budget than someone in Los Angeles. States with lower costs of living can make $4,000 or $5,000 per month feel generous, while high-cost urban areas might require $9,000 or more just to maintain a basic lifestyle.
This is why retirement calculators often fall short — they don’t account for local taxes, property values, or lifestyle preferences.
