Feb 26, 2026
Planning for your golden years requires equal parts risk management and faith, but as a recent survey revealed, many American adults under 65 are sadly losing faith in their retirement.
According to a survey from the Pew Research Center, 40% of respondents were either concerned about not having enough money to last throughout their retirement, or believe they won’t be able to retire at all (1). Adults between the ages of 30 and 39 are the most pessimistic group, with more than half (51%) saying they’re not confident they will be able to retire.
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But there is a silver lining, as those adults still have many years to change their situation. The key is understanding that retirement is less about chasing a magic number and more about understanding how much it will cost to cover your standard of living as your main source of income is replaced with savings. Here are some tips on how to do just that.
Find a baseline for retirement spending today
For that concerned cohort between 30 and 39, a useful benchmark for retirement is your current monthly spending, minus any expenses that you don’t expect to have when you’re no longer working (for example, child care).
To test your assumptions, you can look at a report from the Federal Reserve Bank of St. Louis that tracks total expenditures for households headed by those age 65 and older (2).
The report, which is based on data from the Bureau of Labor Statistics, shows that the total average annual expenditures in these households in 2024 was approximately $61,432, which comes to about $5,120 per month.
These totals set a rough benchmark for how much the average American retiree will likely spend per year and per month — without accounting for inflation — giving you a decent idea of how much you would need to draw from savings on a monthly basis to maintain the average American retiree’s standard of living.
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Closing the gap between Social Security and expenses
While Social Security is a cornerstone of retirement, it’s likely not enough for many Americans to meet this $5,120 monthly benchmark on its own.
The Social Security Administration reports the average monthly benefit in January 2026 is $2,071 (3). This average benefit falls well short of the $5,120 monthly benchmark, creating a gap of $3,049 per month that has to be filled by pensions, part-time work or withdrawals from personal savings and investment portfolios.
Unfortunately, many Americans who are near retirement age are likely not prepared to cover this gap with their retirement savings. In 2023, the median retirement savings for those between the ages of 55 and 64 was $185,000, which is far below what is likely to be required to generate $3,049 in monthly supplemental income for several decades.
When you factor in taxes on withdrawals and the unpredictable nature of health care costs, the gap between what many people have and what they’ll likely need to reach the $5,120 per month benchmark becomes even more apparent.
Why it’s so hard to save for retirement targets
One reason it is so difficult for workers to save for retirement is that current cost-of-living pressures compete directly with the ability to save.
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High costs for housing, groceries and insurance can crowd out retirement contributions, especially for the sandwich generation that often supports both children and aging parents simultaneously.
The headline inflation rate of 2.7% throughout 2025 might seem manageable on paper (5), but for a household trying to build a long-term buffer, every percentage point of price growth is a hurdle to building a sustainable surplus.
Geography, housing status and health status can swing a personal monthly requirement by thousands of dollars. For example, a renter in a high-cost metropolitan area faces a vastly different financial landscape than a homeowner with a paid-off mortgage in a rural community.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
How to calculate your number and save for it
To customize your safe monthly retirement number, start by identifying your fixed needs, estimate your specific health care expectations and account for any remaining debt. When you’ve got that number settled, you can layer on lifestyle priorities such as travel or financial support for family members.
To maximize savings toward this retirement goal, people who work full time for an employer that offers a retirement benefit should focus on capturing the full employer match, as well as increasing contributions whenever their income rises. Taking advantage of catch-up contributions once you reach 50 can also significantly bolster your bottom line.
Freelancers and other contingent workers can increase their savings — and lower their tax burden — by opening a Simplified Employee Pension IRA or a SIMPLE IRA. For lower-income workers, a Roth IRA offers large tax advantages that allow retirees to maximize their spending power.
While $5,120 per month serves as a solid starting point for a typical older American, the right target is the one that accounts for your particular location, health status and total debt. The most successful retirement plans are those that build enough guaranteed and flexible income to handle both the predictable bills and the inevitable surprises of your golden years.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Pew Research Center (1); Federal Reserve Bank of St. Louis (2); Social Security Administration (3); NerdWallet (4); USA Today (5).
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Will Kenton is a personal finance writer with a Master's degree in Economics who has been published in Investopedia, AP News, TIME Stamped and Business Insider among other publications.
