Here's How Much Monthly Income You'll Need If You Retire in 2027

What's the first step in preparing to retire next year? Start with figuring out just how much you'll actually need each month in retirement. That will depend on your personal finances, but here's some quick math.

According to federal data, the median weekly paycheck in the United States is approximately $1,235. That adds up to $64,220 annually, or $5,351 per month. Fidelity estimates that retirees typically spend 55% to 80% of their preretirement income. Assuming the high end, that's $4,281.

From there, you can begin adding in your income streams to see how you meet that benchmark. Here's how that might look.

Social Security gives you a solid head start

For millions of retired Americans, Social Security is a crucial financial crutch. Assuming you're at least 62 and meet the requirements to claim, your monthly retirement benefits will account for a chunk of your income. The average monthly benefit was $2,071 as of January 2026. If that $4,281 number somewhat applies to you, the average monthly benefit might represent nearly half of the income you need.

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You can start claiming monthly benefits as soon as 62, but waiting until your full retirement age will avoid any early retirement deductions, which can reduce your benefit by as much as 30%. Full retirement age is currently between 66 and 67, depending on your birth year. Although your benefits are larger if you wait, it can take years to break even compared to claiming at 62. That's why when to claim Social Security is a very personal decision.

Here's how much you might need to save

Beyond Social Security, you'll probably look to your actual nest egg to cover the rest of your living expenses. That's pensions, 401(k) plans, or regular investment accounts. Using our existing numbers, someone who receives the average Social Security benefit still needs approximately $2,210 per month.

The 4% rule is a common method for estimating how much a retiree can withdraw from their savings each year. Working this backward can help determine what that initial retirement nest egg should look like.

If you do the math, that $2,210 per month equates to $26,520 per year. From there, multiplying by 25 means a typical retiree would want to retire with approximately $663,000, assuming their nest egg is their only source of income beyond Social Security.

The unfortunate reality is that the median U.S. household has only $200,000 saved by age 65. That explains why older adults are increasingly working longer.

Hopefully, anyone approaching retirement who is reading this already has enough saved. If not, a professional financial advisor can help you form a plan to get back on track. It's never too late to start or make a positive change, and knowing the hard numbers is the first step.

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