Retirement Download
Strategies for a successful retirement
What Should Be My Retirement Income in 2026?
A good monthly retirement income in 2026 depends on your lifestyle, location, health needs, and pre-retirement earnings, but recent data provides useful benchmarks for planning a comfortable post-work life.
Understanding Average Retirement Spending
Recent figures from the U.S. Bureau of Labor Statistics show that households headed by retirees (typically age 65 and older) spent an average of around $59,616 to $61,000 annually in recent years, translating to roughly $4,968 to $5,083 per month.
This covers essentials like housing (often the largest category at about 36%), transportation (around 15%), healthcare (13%), and food (13%). Spending tends to decline with age, as travel and work-related costs drop, though healthcare expenses can rise.
However, averages don't fit everyone. Many financial experts recommend aiming for 70% to 80% of your pre-retirement income to maintain a similar standard of living, accounting for reduced expenses like commuting or payroll taxes but potential increases in leisure or medical costs.
For example, if your pre-tax annual salary is $100,000, targeting 70% would mean about $5,833 per month in retirement income, while 80% would require approximately $6,667 per month. Use retirement calculators from sources like Vanguard or Fidelity to personalize this based on your savings rate, expected lifespan, and inflation.
Creating a Personalized Retirement Budget
To determine your ideal monthly income, experts advise building a detailed budget. Start by tracking current spending, then adjust for retirement changes: lower work-related costs, but higher potential travel, hobbies, or healthcare. Sabino Vargas, a senior financial analyst at Vanguard, suggests writing it down—on paper or in an app—and treating it as a flexible, evolving document.
George Mannes from AARP The Magazine recommends a "test drive": Live on your projected retirement budget while still working to see if it feels sustainable for dining, entertainment, and daily life. If there's a shortfall, especially with 5–10 years until retirement, adjustments like cutting expenses or boosting savings can close the gap.
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“Danger.”
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“Stay out.”
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You might not realize this, but volatility is like GOLD to a day trader with rules.
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See you at the training,
Mark Soberman
NetPicks
Disclaimer: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT ADVICE. NetPicks Services are offered for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation or be relied upon as personalized financial advice. We are not financial advisors and cannot give personalized advice. There is a risk of loss in all trading, and you may lose some or all of your original investment. Results presented are not typical. Please review the full risk disclaimer: https://www.netpicks.com/terms-of-use-conditions-of-sale/'
Key Sources of Retirement Income
Maximize multiple streams to reach your target.
Retirement Accounts
Employer-sponsored plans like 401(k)s offer tax advantages and often include matching contributions—essentially free money. For instance, contributing 6% of a $100,000 salary adds $6,000 yearly, plus a 4% match brings an extra $4,000.
For 2026, the IRS sets these limits:
401(k), 403(b), and similar plans: $24,500 employee contribution.
Catch-up for age 50+: $8,000 additional.
"Super" catch-up for ages 60–63: $11,250 additional (if plan allows).
IRAs provide flexibility outside work. Traditional IRAs use pre-tax dollars (taxed on withdrawal), while Roth IRAs use after-tax contributions (tax-free growth and withdrawals). Consider low-fee providers for easy access and strong tools.
Social Security
This often replaces 35%–40% of pre-retirement income if claimed at full retirement age (FRA). For those born in 1960 or later, FRA is 67. Claiming at 62 reduces benefits by up to 35%–40%, while delaying to 70 increases them (e.g., a $2,778 FRA benefit might rise to $3,575 at 70 but drop to $1,822 at 62). Waiting maximizes lifetime payouts if you can afford to.
Investments and Other Assets
Beyond accounts, draw from dividends, bond interest, CDs, or rental income. The 4% rule suggests withdrawing 4% of your portfolio in year one (adjusted for inflation annually) to last 30 years. Many rely on 401(k)s and Social Security, but median 401(k) balances remain modest (around $95,000–$100,000 for those nearing retirement), so diversification helps.
Annuities and Health Savings Accounts (HSAs)
Annuities provide guaranteed lifetime income, useful if concerned about outliving savings. HSAs (for high-deductible plans) offer triple tax advantages: tax-free contributions, growth, and medical withdrawals—ideal for Medicare premiums or other costs. After 65, non-medical use is allowed (taxed as income).
Home Equity and Downsizing
A reverse mortgage (for age 62+) turns home equity into payments or credit without monthly repayments, but risks include foreclosure if taxes/insurance lapse. Downsizing can free cash, though moving costs and ongoing expenses require careful math.
Common Questions
How much should I have saved? Aim for 70%–80% income replacement or benchmarks like 10x your salary by age 67 (building gradually: 1x by 30, 3x by 40, etc.).
Traditional vs. Roth IRA? Traditional offers upfront tax breaks but taxes withdrawals; Roth taxes contributions now for tax-free later—better if expecting higher future brackets.
The 4% rule? Withdraw 4% initially from investments, adjusting for inflation, to sustain a portfolio over 30 years based on historical data.
Planning ahead with realistic budgeting and diversified sources can help ensure a comfortable retirement. Many find it's never too late to refine strategies for long-term security.
Resources
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FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT ADVICE. Morning Download products and services are offered for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation or be relied upon as personalized financial advice. We are not financial advisors and cannot give personalized advice. There is a risk of loss in all trading, and you may lose some or all of your original investment. Results presented are not typical. This message may contain paid advertisements, or affiliate links. This content is for educational purposes only.
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