When Massachusetts retirees stop working, they lose a paycheck and instead turn to other sources of income. But where does the money come from?
As it turns out, it’s a combination of income sources, according to the Employee Benefit Research Institute’s latest annual Retirement Confidence Survey, which polled more than 1,000 American retirees.
Here are the top ways that U.S. elders receive income every month.
- Social Security
Retirees who cited this source of retirement income: 94%
According to the Social Security Administration, the average monthly benefit payment to retirees as of January 2025 is $1,976. For a couple, both of whom are receiving benefits, the average monthly amount is $3,089.
Generally, that’s not enough to live on comfortably — but then again, it wasn’t intended to be. When the system was created in the 1930s, Social Security benefits were considered part of “the three-legged stool” of retirement, with the other two legs being private pensions and savings/investments.
- Personal retirement savings/investments
Retirees who cited this source of retirement income: 73%
Even if you have a workplace retirement plan or an individual retirement account (IRA), you should also have other sources of savings in retirement.
Some people opt for brokerage accounts in addition to their workplace retirement plans. Others stuff money into certificates of deposit (CDs) and high-yield savings accounts, among other vehicles.
- A defined benefit (traditional) pension
Retirees who cited this source of retirement income: 64%
Traditional pensions were once much more common. Not so much anymore: As of 2023, only 24% of civilian workers had access to a traditional pension plan, according to the U.S. Bureau of Labor Statistics.
- A traditional individual retirement account
Retirees who cited this source of retirement income: 59%
More than half of retirees surveyed have traditional IRAs as part of their retirement finances. Unlike their Roth IRA cousins, distributions from traditional IRAs are taxed.
- A workplace retirement savings plan
Retirees who cited this source of retirement income: 54%
Defined contribution retirement plans, such as 401(k) accounts, have become a standard benefit in many workplaces.
- A Roth individual retirement account
Retirees who cited this source of retirement income: 35%
Not everyone qualifies for Roth accounts. However, it may be possible to roll over a regular IRA into a Roth IRA.
- Home equity, real estate or property for rental income (tie)
Retirees who cited this source of retirement income: 33%
In recent years, platforms like Arrived have made real estate investment more accessible, and it may become part of more folks’ retirement strategies.
Some people, of course, do buy and rent out property for income, or rely on the equity in their own homes.
- A product that guarantees monthly income for life (tie)
Retirees who cited this source of retirement income: 33%
Products like annuities that provide such income can be fairly safe investments for retirees. However, they do have their drawbacks.
- Work for pay
Retirees who cited this source of retirement income: 29%
Surveys often find that large numbers of current workers plan to do some kind of work in retirement. However, many retirees leave the workforce earlier than expected for issues outside their control, such as a layoff or health problems.
- Financial support from family and friends
Retirees who cited this source of retirement income: 18%
It isn’t clear whether these retirees are receiving help right now, or whether they simply foresee having to ask someday. But either way, it’s troubling that nearly 1 in 5 respondents expect to turn to others for financial help during retirement.
- Private disability insurance income
Retirees who cited this source of retirement income: 11%
Few people really believe they will become disabled at some point. However, the statistics paint a different picture.
The Centers for Disease Control and Prevention reports that in 2022, more than 1 in 4 U.S. adults — more than 70 million — reported having a disability. For that reason, it can make sense to consider purchasing disability insurance during your working years.
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