Yahoo Finance Mind the retirement gap: Retirees in 5 US big cities beat the national retirement income average by at least $25K/year
Across the United States, some retirees have a lot more money than others.
In fact, there’s a $56,932 gap between the mean retirement income in the city where seniors bring in the most money versus the city where they bring in the least.
Don't miss
Who says you can’t beat the market consistently? Meet the team of market experts whose stock picks outperformed the S&P 500 by 12% — four years running
Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month
These 5 magic money moves will boost you up America's net worth ladder in 2024 — and you can complete each step within minutes. Here's how
That’s according to a recent study conducted by SmartAsset, a financial technology company. SmartAsset looked at data from 345 of the largest U.S. cities to find the mean retirement income (from both Social Security and retirement accounts) for their resident seniors.
Here’s a look at the places where retirees are most likely to be flush with cash — plus how to make your own retirement more secure wherever you’re based.
Where the retirees are richest
Although the average retirement income across the country’s large cities is $52,723, the top five cities with the highest mean retirement incomes well exceed that:
Arlington, Virginia: $90,140
Cambridge, Massachusetts: $79,563
The Woodlands, Texas: $79,539
Berkeley, California: $78,949
Alexandria, Virginia: $77,952
It should come as no surprise retirees in these areas have a lot of retirement money coming in. Arlington and Alexandria are both part of the D.C. metro area and are a haven for high-paid lobbyists and others enriched by the political infrastructure in the D.C. area, while Cambridge and Berkeley are home to world class universities — Harvard and UC Berkeley, respectively.
Median household income among the entire population in each of these cities is far higher than the national average, with the Federal Reserve reporting that typical Arlington households earned $131,020, compared with a national median income of $74,755.
The other cities on this list all had similarly high earnings, with median incomes topping $100,000 in each one.
Rich people tend to become rich retirees, as they have more money to save and invest for the future.
Those who work for the government or universities are also significantly more likely to be eligible to participate in defined benefit plans. These are retirement plans in which employers offer a set amount of income for life, rather than just the chance to contribute to a retirement investment account like a 401(k) where your retirement income depends on your choice to invest and the performance of your portfolio.
Read more: Jeff Bezos told his siblings to invest $10K in his startup called Amazon, and now their stake is worth over $1B — 3 ways to get rich without having to gamble on risky public stocks
What it all means for you
If your home city isn’t among the locales that's a haven for rich retirees, that doesn't mean you can't expect to lead a rich retirement. And that doesn’t always take $75K/year.
In fact, most retirees don't bring home upwards of $75,000. Census data shows median retirement income was $50,290 for households 65 and over. You don't necessarily need $75K or more though. The goal is generally to replace around 70% to 85% of your own pre-retirement earnings, not to hit some arbitrary income target.
You do, however, need to ensure you're saving money to achieve your own goals, though, as Social Security alone can't support your needs in retirement. In fact, even in the areas where wealthy retirees are concentrated, Social Security benefits aren't very impressive.
In Arlington, for example, just $24,296 of the $90,140 in retirement income the typical senior had came from Social Security. And, in none of the top five cities with the highest mean retirement income did Social Security provide even close to half of the money seniors had coming in.
This means that, no matter where you live, you'll want to work towards investing regularly throughout your career to ensure you have the retirement income you personally need to live with the retirement security you deserve.
What to read next
Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here's how you can save yourself as much as $820 annually in minutes (it's 100% free)
Thanks to Jeff Bezos, you can now use $100 to cash in on prime real estate — without the headache of being a landlord. Here's how
'It's not taxed at all': Warren Buffett shares the 'best investment' you can make when battling rising costs — take advantage today
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
