Study: Retirees Struggle To Replace Income


The rule of thumb holds that Americans need to maintain 70% of their pre-retirement income after they stop working. If that’s true, then the retirement crisis is even worse than we thought—and it’s worst in the Northeast, the most populous area in the country.

A recent study from found that the median incomes of people 65 and older only reach that 70% replacement ratio in one state.

If you’re a retiree in Nevada, congratulations! The study showed that Nevada is the only state where people of retirement age have been able to maintain at least 70% of their pre-retirement income.

Overall, results were mildly encouraging from the perspective of previous studies. The national ratio for replacement leaped to 59.6%, up from 57.4% the last time the study was conducted in 2011. In general, however, the average American has a long way to go if they hope to attain that 70% threshold.

“It’s clear that nearly everywhere in the country, older Americans don’t have the kind of money they need for a secure and comfortable retirement,” said Mike Sante, managing editor of

The average household earns $35,107 per year in retirement, as opposed to the pre-retirement figure of just over $55,000. The information was calculated using the 2013 American Community Survey, conducted annually by the United States Census Bureau.

Most states are inching toward that 70% benchmark, as 28 of our 50 states are replacing between 60 and 69 percent of their pre-retirement income. States that are well-known as retirement destinations performed well—such as the aforementioned Nevada—with Hawaii, Arizona and Florida all finishing in the top 10.

The news wasn’t as good for the country’s most populous area—the northern region of the East Coast. Seven of the bottom 10 states for replacement income fell in this region, including Massachusetts, which finished dead last at a ratio of 48.7%. Several of these states often find themselves near the top of the list in terms of income per capita, emphasizing the importance of careful retirement planning for those who’ve become accustomed to a certain way of living.


Please enter your comment!
Please enter your name here