What Is a Good Retirement Income for a Single Person?

There's no universal dollar amount that defines a good retirement income for a single person.

Your number is personal.

A single retiree who owns a home outright and spends $4,000 per month has completely different income needs from someone paying a mortgage, traveling frequently, and spending $10,000 per month.

Instead of starting with a national average, start with your income floor.

That's the amount of dependable monthly income you need to support your lifestyle and feel financially comfortable.

Key Takeaways

• There's no single retirement income number that's appropriate for every single person.
• Your required income should be based on your actual expenses and desired lifestyle.
• Social Security and pensions can form the foundation of your retirement income floor.
• Determine the gap between dependable income and the amount you actually want to spend.
• Guaranteed lifetime annuity income can potentially fill part of an income gap.
• Retirement planning should include enough flexibility to enjoy the money you've accumulated.

Don't Use Someone Else's Retirement Number

Retirement statistics can be interesting, but they don't tell you how much you need.

Someone may say the average or median retiree has a certain amount of income.

That doesn't mean the number fits your situation.

Your retirement income requirement depends on:

• where you live
• whether you own or rent
• debt
• healthcare costs
• travel
• hobbies
• family responsibilities
• the lifestyle you want

The better approach is to calculate your actual monthly needs.

Start With Your Monthly Expenses

Begin with the basics.

How much money do you realistically expect to spend each month?

Include expenses such as:

• housing
• utilities
• food
• healthcare
• insurance
• transportation
• taxes
• travel
• dining
• entertainment
• other discretionary spending

Don't create a retirement budget that only allows you to survive.

If you've worked and saved for decades, your plan should also account for the things you want to enjoy.

Build Your Income Floor

Next, identify the dependable income you'll receive each month.

That may include:

• Social Security
• a pension
• rental income
• dividend income
• other dependable income sources
• guaranteed annuity income

Add those numbers together.

That's the starting point for your retirement income floor.

Social Security Can Be the Foundation

For many single retirees, Social Security is one of the largest dependable sources of lifetime income.

It pays for as long as you're alive and includes inflation adjustments under the program's rules.

If you have a pension as well, add that amount to your Social Security income.

From there, determine whether those income sources cover the lifestyle you want.

Calculate the Income Gap

Suppose your desired monthly retirement income is $7,000.

If Social Security, a pension, and other dependable sources provide $5,000 per month, you have a $2,000 monthly income gap.

That's much more useful than asking whether your income matches a national average.

Now you have a specific number to solve for.

Lifetime Annuities Can Fill an Income Gap

An annuity can potentially be used to contractually fill part or all of a retirement income gap.

Several types of annuities can provide lifetime income, depending on when you want payments to begin.

You can determine how much money is required to create a specific monthly payment and compare those guarantees across multiple insurance companies.

The objective isn't to place as much money as possible into an annuity.

It's to determine whether you need additional guaranteed income and, if so, how much.

Use the Least Amount Necessary

If your retirement income floor is already sufficient, you may not need an annuity for lifetime income.

If there's a gap, determine how much premium is needed to fill it.

Using the least amount necessary to solve the contractual income need can leave the rest of your assets available for:

• liquidity
• growth
• emergencies
• travel
• major purchases
• legacy planning

That keeps the retirement plan flexible.

A Good Retirement Income Should Do More Than Pay Bills

A retirement plan that barely covers basic expenses may technically work, but that doesn't necessarily make it a good retirement income.

For many people, a comfortable retirement means having enough income to:

• pay required expenses
• handle unexpected costs
• travel
• eat out
• enjoy hobbies
• visit family
• spend without worrying about every dollar

That's why the answer is different for everyone.

Don't Let the Scars of Scarcity Control Retirement

People who have spent decades saving often have a hard time changing from accumulation mode to spending mode.

Even after building substantial assets, they may continue living on an extremely restrictive budget because they're afraid the money will disappear.

That fear can be difficult to turn off.

Creating a clear income floor can help.

When you know how much dependable income is coming in each month and understand the assets supporting your retirement, it can become easier to spend money on the life you worked to create.

Being Single Changes the Planning

A single retiree has different planning considerations than a married couple.

There isn't a second Social Security benefit, pension, or spouse's income available to help cover expenses.

That can make your individual income floor even more important.

At the same time, your expenses may be lower than those of a couple.

The key is to plan around your actual situation rather than applying a generic married-couple or household retirement number.

What About Widows and Divorcees?

The same basic approach applies whether you're:

• never married
• divorced
• widowed
• living independently for another reason

Determine what income you have now.

Determine what you need each month.

Then identify whether there's a gap.

The math matters more than the label.

Your Retirement Income Should Be Customized

Two people with identical portfolios may need completely different retirement income strategies.

One person may comfortably live on $4,000 per month.

Another may need $10,000.

Neither person is automatically right or wrong.

The correct number is the amount that supports your expenses, lifestyle, and long-term retirement goals.

Where to Calculate Retirement Income

Use our annuity calculators to compare contractual lifetime income guarantees from multiple insurance companies.

You can enter a lump sum to see how much guaranteed income it may produce, or start with the monthly income amount you want and determine how much premium may be required to create it.

The Bottom Line

There isn't one universal answer to what constitutes a good retirement income for a single person.

Your number should be based on your lifestyle, expenses, existing guaranteed income, assets, and what you actually want retirement to look like.

Start with your income floor.

Add Social Security, pensions, and other dependable income. Then compare that amount with what you realistically want to spend each month.

If there's a gap, you can determine whether additional guaranteed lifetime income is appropriate.

The goal isn't to match an average. It's to create an income plan that works for you.

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