Retirement income can vary drastically across the United States. In some cities, retirees enjoy an average annual income of more than $85,000 — over 50% higher than the national average, according to a new study.
Typical retirement income in the United States hovers around $54,000 a year — far below the median national household income of $80,610. But how much retirees can expect annually can range anywhere from $33,900 to $85,400 depending on the city, according to an analysis of U.S. Census Bureau data by advisor lead generation and client matchmaking service SmartAsset.
The study analyzed 344 of the largest U.S. cities with available data, ranking them based on retirement income. This included funds from designated accounts such as pensions, 401(k)s, IRAs and 403(b)s, along with income from Social Security retirement benefits. The data was sourced from the U.S. Census Bureau’s 2023 one-year American Community Survey.
At the state level, differences in average retirement income are smaller. But retirees in states including Hawaii, Illinois and Virginia receive higher annual retirement income than retirees in states like New Jersey, Ohio and Pennsylvania. Retirees in the Northeast, in general, have significantly less retirement income on average compared to those in the West and the South, according to SmartAsset data.
READ MORE: The 20 metro areas where financial advisor income jumped the most
The disparities reveal not only regional economic dynamics but also how Social Security benefits (and therefore retirement planning strategies) vary nationwide. For instance, retirees in The Woodlands, Texas, receive the highest Social Security benefits at $31,752 on average annually, while retirees in cities like Allentown, Pennsylvania, receive more than half of their retirement income from Social Security alone.
“The mix of Social Security versus other retirement account income can help financial advisors get a general sense of the money culture in an area,” said Jaclyn DeJohn, the director of economic analysis at SmartAsset. “The spread of retirement income types may also help advisors get a general sense of the tax strategies that may be used to maximize retirement income. The ‘best’ withdrawal strategy for retirement accounts will often depend not only on the account types but also on the level of Social Security benefits a client is receiving.”
“Understanding the relative spread of income types — whether they be from designated retirement accounts or Social Security — can also help advisors understand the likely mix of services and expertise needed in each location, so they can staff their teams accordingly,” DeJohn added.
Some cities have experienced explosive growth in retiree incomes; Irving, Texas, for example, jumped nearly 44% year over year. Others, such as Hartford, Connecticut, struggle with the lowest average incomes in the study. To see how this year’s rankings compare to last year, read SmartAsset’s study from 2024 here.
For financial advisors working with retirees, being mindful of how their service area compares to other cities, as well as where retiree income is likely to come from, can make a difference when it comes to their strategy. And while retirement income doesn’t perfectly correlate to total account sizes, knowing which cities have higher retiree income figures can be useful for advisors looking to work in a place where they have more opportunities to grow their AUM, DeJohn said.
Scroll down the slideshow to see the 10 U.S. cities where retirees received the highest average income, as ranked by SmartAsset.*
