Retirement has become complicated now. Pensions are mostly gone, while Social Security barely covers the basics. So what do you do—just wing it? Of course not.

Now, it is important for you to get an idea of where you stand. Well, national averages help, but they are not perfect. However, they are better than guessing – you see the gaps, you plan smarter. Of course, it is not easy. But don’t wait till it’s too late.

Current State of American Retirement Income

Retirement Income is all over the map. The gaps are really big. The median income for 65+ is around $47,620. But the mean is $75,254. That’s a huge jump—thanks to the high-income retirees pulling the average up. Hence, one might wonder, “Are most retirees actually doing okay?”

Meanwhile, age matters too. For instance, 65–74 are better off with a median of $55,747 and a mean of $84,975. However, once you hit 75, the median drops to $38,239. This is when savings run dry and fixed incomes don’t stretch. Also, inflation doesn’t care.

Moreover, there are regional variations as well. The District of Columbia tops the list (over $43K a year). Alaska is next at $36K. Meanwhile, Indiana has just $20,600. That’s nearly half of Alaska’s average. This high difference is due to the cost of living, local economies, and maybe even access to resources.

Hence, it shows that retirement income is not one-size-fits-all. It’s messy and uneven. While some retirees fare better, others merely scrape by. Numbers help paint the picture, but they don’t tell the whole story. Hence, you have to dig deeper and look at lifestyle, health, and family support.

Retirement Savings Reality Check

$1.26 million: That’s the “comfortable” number for retirees in 2025. In reality, most retirees aren’t even close. The Federal Reserve says that the average savings is $333,940 while the median is just $87K. This is a big difference.

Moreover, 54% of households do not have a dedicated retirement savings account at all. However, if anyone wants to save, this progression reveals the importance of starting early:

• Under 35. Average savings of $49,130 (median- $18,880)
• 35-44. Average savings of $141,520 (median- $45,000)
• 45-54. Average savings of $313,220 (median- $115,000)
• 55-64. Average savings of $537,560 (median- $185,000)
• 65-74. Average savings of $609,230 (median- $200,000)

Meanwhile, not a lot of retirees are hitting that $1.26M mark. This shows a painful gap. Also, this isn’t just a numbers game but a wake-up call.

Primary Income Sources for Today’s Retirees

Social Security remains the largest source of income for retirees, with nearly 83% of retirees receiving it. The average monthly Social Security payment is approximately $1,976 per month in 2025. However, it is only 40% of what those retirees used to earn. Hence, it is not enough (not even by a long margin).

Meanwhile, traditional Pensions are fading out. This is because just 26% of people more than 65 years of age receive one. Also, the median payout is $10,788 a year. Hence, it is a major change from previous generations who could enjoy employer-sponsored defined benefit plans.

Now, it is all about personal accounts. These include 401(k)s, IRAs, and Keoghs. But only 16% pull income from IRAs and just 10% from 401(k)s. Also, most retirees struggle to turn those big numbers into monthly cash as they underestimate that part.

This is where investments help (a bit). In general, 69% retirees get something from assets. But half of them get less than $1,754 a year, which is barely anything. Hence, it shows that investments sound good, but the reality is a bit different.

Bottom line? Retirement income’s a patchwork now. No single source does it all. You gotta mix and match. And hope it’s enough.

The Role of Annuities in Retirement Planning

Having a reliable retirement income is tricky. In fact, income dries up, but bills don’t. That is why people are looking more at annuities. This is because Social Security is not enough, and investments are too unreliable sometimes. In these cases, an American General annuity is a solid option. It bridges that weird gap between fixed and risky.

Meanwhile, Fixed annuities are like pensions in providing steady monthly checks and no drama. Hence, it is good for those retirees who hate surprises. However, if a retiree wants some growth, the Polaris Platinum III variable annuity is a great option. It comes with its own risks and rewards. Despite that, it gives some guarantees.

Sometimes, evaluating an annuity provider is a big deal. You want someone who won’t vanish in ten years. That is why it is better to stick to Fidelity and Guarantee Life. These are old names and mostly trusted. Then there are newer products like Income 150 SE that come with competitive features (but do your homework).

The main perk of annuities is lifetime income. In fact, no one wants to run out of money at 82. Moreover, annuities help even during market downturns. No matter what happens, you still get paid.

Creating a Balanced Income Strategy

Retirement planning is not mere numbers on a spreadsheet. It is really complicated, and experts say to mix it up. This is the way this strategy works:

1. Guaranteed income from Social Security, pensions, and annuities for the basics. These include rent, groceries, medicine, and other essential items.
2. Variable income that comes from investments or part-time work. These help with discretionary spending.

The bucket approach is also one of the ways of implementation of this strategy. In this case, you organize your retirement assets into three categories:

• 1st Bucket: cash for the next 2–3 years.
• 2nd Bucket: fixed income for 5–8 years.
• 3rd Bucket: long-term growth investments.

With this approach, you will be able to avoid selling stocks during market downturns. Also, you will be able to maintain a steady cash flow.

Moreover, you will need to diversify. This way, you can reduce risks and get more flexibility. Hence, you might optimize your Social Security, purchase annuities strategically, and make systematic withdrawals. Also, you might earn part-time or do consulting.

Making Informed Decisions About Retirement Income

So, what’s “average” retirement income anyway? By understanding it, you will get useful context. It depends on where you live, how healthy you are, and what you want to do with your time.

That 70–80% rule of thumb is still relevant and a good starting point. However, many financial planners are asking to plan higher. This is because healthcare is getting expensive and people are living longer.

Do you want to choose the best annuity for retirement? Don’t just choose the first one that looks shiny. Rather, zoom out and look at the whole picture. Ask the following questions:

• What are your income sources? (Social Security, pension, etc.)
• What is your risk tolerance?
• Do you have any particular retirement goals?

The best step is to start early, even if your amount is small. If you are consistent, it will snowball as compound interest is magic. However, if you wait too long, that hill gets steeper. Also, statistics don’t lie. In general, people who start in their 20s or 30s fare much better than the late starters.

Your Answer Lies in Annuities

Annuity Gator comes with top-rated annuity products. Also, it has solid reviews, comparisons, and breakdowns. They look at financially strong insurers, which means you are not flying blind.

However, it is important to note that retirement planning isn’t one-size-fits-all. It’s personal and complicated. But knowing your options is the first real step. Whether you are starting out or willing to optimize your strategy, you must get a better idea of your options.

#Disclaimer: The content on this website is provided for informational and educational purposes only and should not be considered financial, legal, or tax advice. Readers are encouraged to seek guidance from qualified financial, tax, or legal professionals before making any decisions. While efforts are made to ensure accuracy, no guarantee is given regarding the completeness or reliability of the information provided. Some articles may contain affiliate links, through which the site may earn a commission at no additional cost to you. All investments carry risk, including potential loss of principal.

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