(NewsNation) – Retirees in the Washington, DC area have the highest retirement incomes in the country, according to a new study.
Analysis by SmartAsset found that residents of Arlington, Virginia, had the highest retirement income, with an average of $90,140. Cambridge, Massachusetts ($79,563) and The Woodlands, Texas ($79,539), were second and third on the list.
Of the 345 large cities analyzed, three of the top eight were in the Washington, DC area. Most of that comes from higher pensions, IRAs and other retirement accounts instead of Social Security, the report noted.
Many California cities ranked in the top ten, including Berkeley ($78,949), Carlsbad ($74,345) and Thousand Oaks ($73,634). Highlands Ranch, Colorado, and Naperville, Illinois, were also high on the list, with retirement incomes above $75,000.
City totals were calculated using U.S. Census data and include all income from retirement accounts such as pension plans, IRAs and 401(k)s as well as Social Security income. “Pensioners” refers to persons aged 65 and over.
Retirement plans like 401(k)s and IRAs make up the bulk of most people’s retirement income, and a rising stock market has helped boost those balances recently.
Last quarter, the number of retirement account millionaires rose to a record 485,000, up 15% from the previous quarter and a 43% increase from a year ago, according to new data from Fidelity.
Individuals in that group had been in their 401(k) plans for an average of 26 years with an average contribution rate of 17%.
However, these accounts are not the norm and make up just 2% of the roughly 24 million defined contribution plan accounts at Fidelity, Bloomberg reported.
Instead, SmartAsset’s city analysis suggests that most retirees live on far less than a typical American family.
Across all major cities, the median retirement income was $52,723, well below the median household income of $74,580. This gap underscores the financial anxiety many are feeling today.
“You look at your 401(k) and your savings, and to make ends meet, you start taking out $100 here and $50 there. Before you know it, it’s gone,” Shari Evans Buford, a retiree from Florida, told NewsNation.
According to a recent AARP survey, one in five Americans over age 50 have no retirement savings, and nearly two-thirds are worried they won’t have enough money to support themselves.
The typical person now thinks they’ll need $1.46 million to retire comfortably, even though savers have put away just $88,400 on average, a Northwestern Mutual survey found.
As a general rule, Fidelity suggests saving ten times your pre-retirement income by age 67 in order to maintain your current lifestyle.
But with inflation eating away at Americans’ budgets, many retirees, over 12%, have “retired” this year.
Shinobu Hindert, a financial educator, said other potential retirees are taking a “soft retirement,” where they cut back on hours but continue to work for benefits.
“They’re not leaving the workforce entirely, but they’re finding a part-time job that can provide additional health coverage,” Hindert said on NewsNation’s “Morning in America.”
The SmartAsset report suggests that Social Security will be the primary source of income for many people. In 14 of the cities studied, residents relied on Social Security for more than half of their retirement income, including those in Brownsville, Texas; South Bend, IN; and Spokane, WA.
In dollar terms, retirees in Ann Arbor, Michigan, ranked highest for Social Security income at $30,428, followed by Carmel, Indiana ($30,069) and Goodyear, Arizona ($29,157).
The average Social Security payment for retired workers was $1,915 a month in April, according to federal data. However, the size of that check varies depending on how long someone worked, what they did, and when they started collecting.
This year, an average of almost 68 million people will receive a Social Security benefit each month, and by 2035, the number of Americans age 65 and older will reach 75 million.
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