Major Sources of Retirement Income for Americans

Quick Answer: The major sources of retirement income for Americans include Social Security, 401(k)s and IRAs, personal savings, part-time work, corporate pensions, and home equity. Surveys show most retirees rely most heavily on Social Security and personal savings, with fewer than expected counting on pensions or guaranteed income streams like annuities.

What will be your major retirement income sources? What income streams will you count on to keep up your ideal lifestyle in your non-working years? Do you plan to be financially independent, or will you have to depend on your children or other loved ones for support? These are important questions as you move closer to retirement.

Once you step back from a full-time career, your current income from work earnings, entrepreneurship, or other sources will probably change. The focal point then turns to your lifestyle in retirement and what sources of income you will use to maintain it. This is not just a personal question — it is a major concern for millions of retirees affecting their financial future.

One survey that can help frame these questions comes from the Transamerica Center for Retirement Studies. Each year, this survey captures findings from thousands of retirees, workers, and employers, including on what they are using for major retirement income sources — or what they expect those sources to be. The Transamerica study is considered one of the most accurate samples of the U.S. retirement landscape as a whole. Its numbers reflect what a typical retiree in America actually experiences.

What Did Retirees Say Were Major Sources of Income?

The study looked at financial outlooks for retirees and workers in the United States, including what long-term effects economic disruptions have had on retirement outlooks. Among generations of current retirees, the reported major sources of retirement income include:

• Social Security
• 401(k)s, 403(b)s, and IRAs
• Other savings and investments
• Working (part-time or full-time)
• Company-funded pension plan
• Home equity
• Inheritance
• Other sources

This was in response to the question: "Which of the following do you expect to be sources of income to cover your living expenses after you stop working?" The answers among current retirees differed across generations, with older retirees more likely to report pension income and younger retirees more reliant on 401(k)s and IRAs.

What About Expected Sources of Income for Future Retirees?

Among workers who have not yet retired, expectations about future income sources shifted notably compared to what current retirees actually report. Workers anticipated relying more heavily on 401(k)s, IRAs, and personal savings — reflecting the broader shift away from defined-benefit pensions — and expressed less certainty about Social Security being available at full benefit levels.

This gap between what workers expect and what retirees actually experience points to the importance of building guaranteed income streams that do not depend on market performance or government program solvency. The more income sources you have secured before retirement, the less dependent you become on any single one.

How Confident Were People About Their Retirement?

The Transamerica survey found confidence levels among both retirees and workers were uneven. A meaningful percentage of retirees expressed concern about outliving their savings, particularly those without pension income or guaranteed income streams. Among workers, confidence was higher among those who had a formal plan and those who had thought carefully about withdrawal timing.

One unsettling finding: among those who provided an estimate of their retirement savings needs, 43% indicated they were essentially guessing at how much they would need. Just 38% had based their estimate on current living expenses — a sound starting point — and only 25% had completed a worksheet or used a retirement calculator to reach their number.

Company-Funded Pensions

Only a small percentage of those polled reported that they could count on a guaranteed pension from the company they worked for. Corporate pensions are rapidly disappearing. Among other reasons, this is due to their high cost and the substantial financial liability they create for employers. Unsurprisingly, more full-time workers than part-time workers said their employers offered this type of retirement benefit — but even among full-time employees, availability has declined sharply over the past two decades.

For workers without access to a pension, fixed annuities and indexed annuities can provide a private equivalent — a guaranteed monthly income for life that does not depend on market returns. This is why a lump sum alone is rarely enough to create the income security that a pension or annuity provides.

Other Sources of Retirement Income

Only a few of those polled reported counting on some other source of income during retirement outside of personal savings, Social Security, or a corporate pension. Those in this category cited home equity — such as from a reverse mortgage or downsizing — as something they would draw from. Others said they were counting on an inheritance to help fund retirement expenses.

A small number also reported they may rely at least partly on self-employment income during retirement, from consulting work or similar services. While this can supplement retirement income effectively, it introduces variability that a fixed income stream cannot.

Working with a Financial Advisor

Considering how many people are effectively relying on guesswork for their future income needs, it is notable that only one in four people in the survey reported working with a financial advisor. An experienced financial advisor can help you develop a clear picture of how much retirement income you will need and a strategy to get there — accounting for Social Security optimization, account withdrawal sequencing, tax efficiency, and guaranteed income solutions.

They can also help you maximize retirement income while managing risks and reducing taxes. With their assistance, you could develop a written financial plan that gives you a roadmap for the years ahead, standards by which to measure your progress, and the flexibility to make changes as your situation evolves.

Have a Written Financial Plan for Retirement

Just one-third of those surveyed had a written financial plan for their retirement. Overall, 76% said they had some form of a financial strategy — but most (over 60%) had no backup plan for retirement income if they became unable to work before their planned retirement date. That gap between having a general idea and having a documented, stress-tested plan represents real financial risk.

Planning for Your Own Retirement Income and Goals

Everyone's situation is different. Even so, it is instructive to see what others are doing — and not doing — to prepare for retirement, so you can assess your own position more clearly. The survey from the Transamerica Center for Retirement Studies is one of the most comprehensive retirement studies conducted annually in the United States. Its findings consistently point in the same direction: those who plan formally, save consistently, and build diversified income streams retire with far greater confidence than those who do not.

What about your own financial picture? To get started, visit our Find a Financial Professional section and connect with an independent advisor directly. You can request an initial appointment to discuss your retirement goals, concerns, and current situation and to explore a working relationship. Should you need a personal referral, please call us at 877.476.9723.

Frequently Asked Questions

What are the major sources of retirement income for Americans?

The major sources of retirement income for Americans include Social Security, 401(k)s and IRAs, personal savings and investments, part-time or full-time work during retirement, company-funded pension plans, home equity (through downsizing or reverse mortgages), and inheritance. Social Security and personal savings are the most widely cited sources among current retirees, according to annual Transamerica Center for Retirement Studies data.

How important is Social Security as a retirement income source?

Social Security is the most commonly cited retirement income source among current retirees. However, it was designed to supplement — not fully replace — pre-retirement income. Most financial planners suggest Social Security should cover no more than 40% of pre-retirement income, with the remainder coming from savings, investments, pensions, or guaranteed income products like fixed annuities.

Are corporate pensions still a reliable retirement income source?

Corporate pensions are rapidly disappearing from the private sector. Only a small and shrinking percentage of workers can count on a defined-benefit pension. For those without access to a pension, fixed annuities and indexed annuities can provide functionally similar guaranteed income — a monthly payment for life that is not tied to market performance.

What role do annuities play as a retirement income source?

Fixed and indexed annuities can serve as a private-sector substitute for the pension income most workers no longer have access to. They provide guaranteed income streams regardless of market conditions, making them a reliable safe money alternative for retirees who want income they cannot outlive. Unlike 401(k) or IRA withdrawals, annuity income does not depend on the timing of market returns.

How many Americans have a written retirement plan?

According to Transamerica Center for Retirement Studies data, only about one-third of Americans have a written financial plan for retirement. While roughly 76% report having some form of retirement strategy, most lack a formal documented plan — and more than 60% have no backup plan if they are unable to work before their planned retirement date. Working with a qualified financial advisor is one of the most effective steps toward building a written plan.