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Social Security doesn't cut it, and retirees have too little saved

Retirees typically get their income from Social Security and savings. For many, these two sources both fall short of providing what's needed.

The average retirement account balance for retiree households was $513,200 in 2022. The median balance was just $170,000. Retirement savings of $513,200 provides around $20,000 in annual retirement income if you follow the 4% rule that advises limiting withdrawals to 4% of your balance to avoid running short of funds too soon.

Of course, Social Security supplements savings, but benefits are intended to replace only 40% of pre-retirement earnings and average just $1,907 per month.

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Beat the average for a secure retirement

If you want your retirement to be more secure than most, you'll want to try for an income that equals or exceeds the average the Fed data revealed. In other words, your goal should be to become one of those large accounts that throws the numbers off and makes the average skew high.

It’s still possible as long as you have some time left in your working life. If you're still on-the-job, prioritize saving and take full advantage of any employer 401(k) matching funds available to you.

You can also make a plan to delay your Social Security benefits claim, as waiting beyond the time you become eligible for benefits at 62 will increase the size of your monthly checks until age 70.

By boosting both your savings and Social Security benefit, covering expenses will be easier.

For current retirees, an income below average can be harder to change, so living within your means will become key. Keep a careful eye on your budget, avoid exceeding a safe withdrawal rate, and consider lifestyle changes such as a move to a low cost of living area if things get tight.

Both current and future retirees may also benefit from financial advice about retirement preparedness as current high inflation has demonstrated just how difficult life can become for those on a fixed income when things don't go as planned.


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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.


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