Retirement income highest in D.C. area: SmartAsset study

NEW YORK, UNITED STATES — Three of the top eight cities with the highest retirement incomes are located in the Washington, D.C. metropolitan area, according to a new study by SmartAsset.
According to the U.S. Internal Revenue Service, retirement income can include benefits from Social Security, annuities, retirement or profit-sharing plans, insurance contracts, individual retirement accounts (IRAs), and other sources. It may be fully or partially taxable.
D.C. area dominates
The SmartAsset analysis based on 345 large cities found that retirees in Arlington, Virginia, have the highest average retirement income at $90,140 per year. Cambridge, Massachusetts ($79,563) and The Woodlands, Texas ($79,539) took the second and third spots, respectively.
Additionally, several California cities, such as Berkeley ($78,949), Carlsbad ($74,345), and Thousand Oaks ($73,634), Highlands Ranch, Colorado and Naperville, Illinois rounded out the list with retirement incomes above $75,000.
Despite these high figures, the study highlighted disparities in retirement savings across the U.S. The average retirement income among all large cities stands at $52,723, lower than the median household income of $74,580.
Shari Evans Buford, a Florida retiree, expressed concerns about depleting savings. “You look at your 401(k) and your savings, and to make ends meet, you start taking out $100 here and $50 there. Before you know it, it’s gone,” she told NewsNation.
The 401(k) is a retirement plan that is offered by your employer that allows you to contribute part of your salary on a tax-deferred basis.
Social Security as a primary income source
In cities like Brownsville, Texas; South Bend, Indiana; and Spokane, Washington, more than half of retirees’ income comes from Social Security. In terms of Social Security income alone, retirees in Ann Arbor, Michigan, and Carmel, Indiana, receive the highest payments, averaging around $30,000.
With the average Social Security payment for retired workers being $1,915 per month and the number of recipients set to increase as the population ages, the importance of this income source is more pronounced than ever.
Financial strategies and concerns of Americans
The analysis comes at a time when financial stability in retirement is a growing concern, with a recent AARP survey revealing that one in five Americans over 50 have no retirement savings. Additionally, the Northwestern Mutual survey suggests Americans believe they need $1.46 million to retire comfortably, though the average saved is only $88,400.
Fidelity recommends having ten times your preretirement income by age 67 to maintain your lifestyle. Still, with inflation and other economic pressures, some retirees are choosing to “unretire” or take a “soft retirement,” continuing to work part-time for additional benefits.
A recent survey by ResumeBuilder.com reveals that one in eight (12%) American retirees are likely to rejoin the workforce in 2024. Meanwhile, according to the Pew Research Center, 19% of Americans aged 65 and above were employed in 2023, marking a significant shift in the American workforce in 35 years.