What Retirement Really Looks Like With Average Savings and Social Security at 62

What Retirement Really Looks Like With Average Savings and Social Security at 62

Selena Maranjian, The Motley Fool

Mon, September 7, 2026 at 5:20 PM GMT+3 4 min read

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As you approach retirement, it's worth taking some time to think through what your retirement will actually look like, given your expected income and spending. Here's a look at that, using some typical numbers for people aged 62.

What's typical?

The average Social Security benefit for 62-year-olds was recently $1,424 per month, or about $17,000 annually. (You read that right; it's not a lot of money.)

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For savings, the folks at Empower recently reported an average retirement balance of $1,228,196 for people in their 60s. That may look impressive, but they also reported a median retirement balance of $568,116.

What's the difference? Well, you know what an average is. Add up everyone's balances and divide by the number of people. To get the median, you would rank all the balances in order, and then zero in on the middle one. The median is a more informative number here, because it's closer to what most people have socked away. The average is much higher because it's influenced by some accounts with many millions of dollars in them.

How would an average person do?

So, we have $1,424 in Social Security benefits. How much income will a $568,116 account generate? That's all up to you and the withdrawal strategy you use. If you use the flawed-but-still-helpful 4% rule as a rough guide, you'll take out 4% in your first year of retirement -- in this case, $22,725 (or $1,894 per month) -- and then adjust subsequent withdrawals for inflation.

That gives you a total monthly income of $3,318 -- and $39,800 annually. It's not a lot, but many people could survive on that. It would help if your home is paid off and you're mainly on the hook for its taxes, insurance, and upkeep. You may not eat out at restaurants very often, or travel a lot, and you might want to grow some of your food in a garden.

How can this situation be improved?

Fortunately, that doesn't have to be you. There are a bunch of things you could do to improve your future financial situation. For example:

• Delay retiring. If possible, delay until age 70, because you'll maximize your Social Security benefits that way. The average monthly Social Security benefit for 70-year-olds was recently $2,275, or $27,300 annually.

• Save aggressively until retiring. By working up to eight more years, you'll likely be able to sock away a lot more money, and it will have time to grow, too. Indeed, if whatever amount you have saved grows at 5% annually for eight years, it will grow by nearly 50%. So a nest egg of, say, $600,000 could become one worth around $888,000. That, too, can make a big difference.

• Invest effectively. Don't take too much or too little risk. If you have money you won't need for at least five, if not 10 years, perhaps park it in a low-fee S&P 500 index fund.

• Consider taking on a side gig now and possibly into your first years of retirement to beef up your nest egg.

Crunch your own numbers and see where you are -- and how you might get stronger financially.

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What Retirement Really Looks Like With Average Savings and Social Security at 62 was originally published by The Motley Fool