The Typical Monthly Retirement Income of 68-Year-Old Americans

At 68, you could be fully retired, working a little, or still earning a regular paycheck. That makes it hard to compare your income with other people your age in a simple way. Even so, looking at what similar households bring in can be a useful starting point and may reveal gaps in your retirement plan.

Below is a look at the typical monthly income for 68-year-olds, where that money usually comes from, and what options exist if your income falls short of your expenses.

What are the median and average monthly incomes at 68?

Based on Census Bureau data, households headed by someone ages 65 to 69 had a median annual income of $71,400. That equals about $5,950 a month. The average was much higher, at $108,800 a year, or roughly $9,067 per month.

The gap exists because households with very high incomes pull the average upward. The median shows the midpoint: half of households earn more than $71,400 and half earn less.

Another important detail is that these figures include people who have not retired, along with income from spouses and other household members. A single retiree living on $3,000 a month is not necessarily worse off than a couple bringing in $6,000, since their costs may be very different.

Where does retirement income come from at 68?

Social Security makes up a large part of older Americans' income, but many retirees rely on several sources.

• Social Security: Retired workers age 68 received an average monthly benefit of $2,052.64. Men averaged $2,272.40, while women averaged $1,836.58.
• Pensions: Traditional pensions are harder to find in private-sector jobs. About 26% of Americans age 65 and older received pension income in 2022, while only 14% of private-industry workers had access to a defined-benefit pension in a recent labor survey.
• Retirement savings: Roughly 16% of adults 65 and older received IRA income in 2022, and 10% received income from a 401(k) or similar account. Among those receiving retirement income outside Social Security, the median was $17,160 a year.
• Employment: Many older Americans still work. Households headed by someone ages 65 to 74 averaged $32,898 in wages and $4,951 in self-employment income. Those averages include households with no employment income.
• Investments and rental property: The same survey found that households in this age group averaged $5,073 annually from interest, dividends, rent and other property income.

These figures come from different age groups and time periods, so they are not meant to be added together to match the Census household median.

How much retirement income comes from Social Security?

For retirees without a pension or meaningful savings, Social Security may need to cover nearly everything. The Retirement Confidence Survey from the Employee Benefit Research Institute found that 92% of retirees receive Social Security income, and 66% say it is a major source of income.

In addition, Bureau of Labor Statistics data shows that households headed by someone ages 65 to 74 received an average of $31,347 a year from Social Security and private and government retirement benefits combined. That accounted for about 42% of their $75,460 average pretax income.

The BLS does not break out Social Security separately from pensions in that total, but the numbers still show how much retirement benefits matter even when households have some work income.

How much do Americans this age spend each month?

An income of $5,950 may sound comfortable until monthly bills are added up. According to the BLS, households headed by someone ages 65 to 74 spent an average of $65,354 in a year, or about $5,446 a month.

Three categories made up a large share of that spending:

• Housing: $22,329 a year, or $1,861 a month. Even homeowners without mortgages still face property taxes, utilities, insurance and maintenance.
• Transportation: $11,414 a year, or about $951 a month. Car purchases, repairs, insurance and other travel costs add up quickly.
• Health care: $7,715 a year, or about $643 a month. Health insurance premiums alone accounted for $5,114 of that amount.

Together, those three categories came to about $3,455 a month. Food added another $8,483 a year, or roughly $707 monthly. Someone receiving the average Social Security benefit of about $2,053 would have very little left after the average housing bill.

What if your retirement income is not enough?

If you are 68, you still have several possible moves, including some that were not available earlier in retirement.

• Return to work without losing Social Security benefits. Because you have already reached full retirement age, the Social Security earnings test no longer applies. You can take part-time or consulting work without benefits being withheld because of your earnings.
• Consider waiting until 70 to claim. If you have not started benefits yet, Social Security raises your benefit by 8% for each year you delay past full retirement age, up to age 70. If you are already collecting, you may be able to suspend payments voluntarily before 70 to earn delayed retirement credits.
• Reevaluate housing. With older households spending nearly $1,900 a month on housing, this may be your best chance to reduce expenses. Downsizing or relocating to a cheaper area could lower monthly bills.

Why age 68 is a good time to review retirement accounts

Under current IRS rules, required minimum distributions usually begin at 73. Some workers who are still employed can delay RMDs from their current employer's retirement plan. That leaves about five years to decide whether withdrawing money earlier makes sense.

Looking at your options now gives you time to spread withdrawals or conversions across more than one tax year instead of waiting until distributions become mandatory.

Bottom line

Households headed by Americans around age 68 have a median monthly income of $5,950, but that includes many people who are still working. Your own bills and dependable income matter more than matching that figure. If you want to save money in retirement, start by reviewing your biggest monthly expenses.

At 68, you still have many retirement years ahead to plan for. Social Security Administration actuarial data puts remaining life expectancy at about 16 years for men and 18 years for women at that age, and many people live beyond those averages.

Before settling on a monthly retirement budget, work out how long your savings would last if you lived to 90 or even 95. Income that covers today's bills will not help much if your money runs out 15 years from now.

FAQs

Why is median retirement income lower than the average?

Higher-income households lift the average. The median marks the midpoint, where half of households earn more and half earn less, which makes it a better measure of a typical household.

What counts as retirement income at 68?

Retirement income can include Social Security, pensions, withdrawals from retirement accounts, wages, self-employment income, investment income and rental income. The total depends on which sources you have.

What if I'm behind on retirement income at 68?

Start by comparing your dependable monthly income with your essential expenses to see whether there is a gap. Cutting large costs such as housing and transportation, or adding part-time work, may help close it. Falling below the median does not automatically mean you are behind. What matters most is whether your income and savings can support your needs throughout retirement.

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