Lets take a closer look at the most prominent sources of retirement income. The table below shows the estimated income Bob requires from his savings to supplement Social Security and bring his combined annual earnings to $63,007. According to the latest Survey of Consumer Finances (SCF) by the Federal Reserve, the median and mean retirement savings by age group in the U.S. are as follows: How do you fare relative to the median for your age group? Once youve been matched, consult for free with no obligation. Filing $60,000.00 of earnings will result in $5,968.00 of that amount being taxed as federal tax. Some states, such as Florida, do not have a state income tax. Most retirees want to maintain their standard of living during retirement. Keep your spending under control and $60k a year can be good. Those numbers equate to an annual income of $23,484 when Social Security is claimed at 67, or $32,688 if the benefit is taken at age 70. That said, having a four-year degree could make you more competitive for one or more of these positions. Click here to sign up for our newsletter to learn more about financial literacy, investing and important consumer financial news. 70) and $48,000 ($60,000 x . Get browser notifications for breaking news, live events, and exclusive reporting. However, its worth keeping in mind that many states without a state income tax have higher taxes in other areas, such as real estate taxes. When doing the math for retirement, . Can I take my pension at 55 and still work? According to the Social Security Administration, for 2022, the maximum Social Security benefit you can receive each month is $3,345 for those at full retirement age. The amount you receive is based on how much you earn during your working years and the age you elect to start your benefit. It should be noted that the suggested annual savings dont include Social Security payouts, potential pension income or interest earned on savings. After all, if youre trying to make a budget for yourself and your family with this salary, you need to know if you can actually live off of $60k a year. Use it as a model for shaping your own retirement savings plan. Many baby boomers have retired from the workforce, but you might not be able to tell from their spending habits. Singapore is the only country where it would cost you upwards of a million dollars to retire, whereas in the United States that number is around $700,000. To pinpoint the average retirement income you would need to live comfortably throughout the U.S., GOBankingRates looked at five factors in all 50 states and the District of Columbia: an individuals spending on groceries, healthcare, housing, utilities and transportation. You'll provide your birthdate and current income, and then select the option to see your benefit estimate in inflation-adjusted dollars. How to maximize this income: Delay receiving your Social Security benefit until full retirement age, which is between 66 and 67, depending on when you were born. Filing $60,000.00 of earnings will result in $4,590.00 being taxed for FICA purposes. Retrieved from, Schroders. This leaves you with more like 3,750 a month. This is not an offer to buy or sell any security or interest. Examples of this include: Keep in mind that some of these jobs might require a two-year degree or a certification; however, they do not necessarily require a four-year degree. On $60k a year, youll take home around $3,500 per month. Many people have various sources of retirement income, which can include pension plan distributions, Social Security benefits and investment account distributions. Fortunately, the strategies outlined below can help you extend the longevity of your savings. This is because the mean is skewed by individuals with very large incomes. That said, this will depend on other factors, including the cost of living where you are and how you manage your finances. 4% Rule of Thumb vs. $1,000-a-Month Rule of Thumb. As an example, the averageworker -- let's call him Bob -- making $51,688 annually today will need $63,007 to cover his current lifestyle in 10 years. As a baby boomer approaching retirement age, I find myself doing general research to reaffirm some strategies that we have worked on since our early thirties. They break that out by the age of the kids and 4 different cost levels. Even so, claiming benefits early can be a sensible choice for people in certain circumstances. Retrieved March 5, 2023, from https://www.annuity.org/retirement/planning/average-retirement-income/. Assuming you save 15% a year, get 2% annual pay raises and earn a 5% yearly rate of return on your original $75,000 plus your annual savings, you would end up with a nest egg at age 65 of roughly . While it's important for them to enjoy their golden years, some aren't doing the best Retirement can be a complex phase of life from a financial standpoint, and many women are underprepared due to a lack of financial literacy. For example, looking at retirement in Colorado, an average monthly cost is roughly $4,644 (or $55,728) for a couple living in a relatively expensive metropolitan area. That said, the target percentage may need to be revised upward or downward, depending on your life expectancy, health care costs and retirement lifestyle, which depend on your primary geographic location and travel habits. Based on the responses, the average retirement goal from the experts we interviewed was $2.3 million, excluding three people who preferred not to give a total number. You can also see this in other ways in addition to Pews definition of middle class, as mentioned above. Inflation costs are a 2.5% rise per year in cost of living, plus a 1.5% additional rise per year in living standards. Now, people all over the nation are thinking more about their long-term financial goals and paying closer to their progress in achieving them. The average Social Security benefit is $1,657 per month in January 2022. This is SmartAssets second annual study on the best places to live on a $60,000 salary. Your situation may be different than that of the average person, but a benchmark can be informative, especially when you can dial into specific categories of data, such as age groups. At that rate, $60,000 a year is $30 an hour. (2022, November 28). Required Minimum Distribution (RMD): What Is It and How Is It Calculated? Find out exactly how much youll need to retire comfortably in your state. How much do I need to retire with 60000 a year? While you can begin to take some of your A major worry surrounding the current debt-ceiling crisis is how Social Security payments will be made should the ceiling not be raised. 2023 GOBankingRates. Table data source: SSA.gov and author calculations. What jobs pay $60k a year without a degree? Thats because the cost of living varies from state to state. The cost of retirement is lowest in mostly Asian and African countries like Pakistan, Egpyt and Algeria where living a comfortable, retired life would require at least $225,000. Depending on your income level, savings rate and anticipated spending needs, you may be able to retire early. Retiring with $600,000. As you gain work experience and move onto a career track, you can amp up your contributions to your emergency fund and to your retirement account as well. Ultimately, it will come down to your own personal circumstances. Private Pension Plan Bulletin Historical Tables and Graphs 19752019. Without it, you'd need somewhere between $1.2 million and $1.5 million just to produce $60,000 of retirement income. The exact amount youll take home if you earn $60,000 will vary depending on which state youre in. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below. After entering it into the calculator, it will perform the following calculations. (2022). Retrieved from, United States Federal Reserve System. Facts and Myths About the Future of Social Security, Millions of American Workers Are Close To Retiring With No Savings -- 5 Ways To Start at Any Age. But in others, you'd barely scrape by. View more property details, sales history and Zestimate data on Zillow. Maybe youre thinking about moving somewhere new and want to know if youre earning enough to live well there. So, if you're making 60k a year, you should try to save at least $30,000-$36,000. You Might Regret That, There's Still Time to Earn a $2,000 Saver's Credit for 2022 Roth IRA Contributions, 2 Reasons to Avoid a Roth 401(k) for Your Retirement Savings, Want $1 Million in Retirement? See the chart above as an example. I think you'll be surprised at the stark differences in lifestyle. The most reliable way to create the retirement you want is to get serious about padding that savings account today. "Average Retirement Income: What is a Good Income for Retirees?" On average, seniors earn between $2000 and $6000 per month. Lexington, Kentucky had the seventh-lowest July 2020 unemployment rate of the 97 cities we analyzed, at 5.7%. Without mortgage repayments, spending $60K a year is not low at all for most of the Australians. Learn More: Want to learn about a simple way to manage your personal finances and prepare for retirement, investigate my new book Your Money Ratios: 8 Simple Tools For Financial Security, available in bookstores and at amazon.com The Wall Street Journal called the book "one of the best finance books to cross our desks this year." Just how much does the average 60-year-old have in retirement savings? According to payout statistics from the Social Security Administration in June 2020, the average Social Security benefit at age 62 is $1,130.16 a month, or $13,561.92 a year. Out-of-pocket healthcare costs are higher for old people. Hop over to the Social Security website and search for the quick calculator. Can my son deposit his check in my account? Retrieved from, Congressional Research Service. Evaluate your current financial situation. This isn't a set rule for everyone, and you may need to even account for more savings. This is also supported by the fact that $60,000 is very close to the median US household income of $63,179. If you are living alone, or you and your family are frugal, then you will probably make enough to live comfortably. Even though it might sound challenging for some, its more than possible for you to live off of $60,000 per year with some careful management. Don't waste it. Now you'll see why Social Security is so important. However, if you have a lot of children, or are supporting a lot of other people, then you might find yourself pinching pennies. Its also going to depend on your spending habits. A few simple steps used to be enough to control financial stress, but COVID and student loan debt are forcing people to take new routes to financial wellness.