How Much Monthly Income Will You Have in Retirement? Know Your Retirement Paycheck

Most people nearing retirement can tell me, almost to the dollar, how much is in their 401(k) or IRA.

Then I ask a different question: “How much money will you actually have to spend every month once the paycheck stops?”

That is usually where the room gets quiet.

In this short video, part of my Retirement Mistakes series, I cover one of the most common mistakes I see with pre-retirees in Orlando, Kissimmee and across Central Florida, and with the families I work with nationwide by video: retiring without knowing your monthly retirement income. Your account balance is not your retirement paycheck. Before you retire, you need to know the second number, not just the first.

What This Video Covers: Do You Know Your Retirement Paycheck?

You may know exactly how much is in your 401(k), IRA or investment accounts. But do you know how much money you will actually have available to spend every month once the paycheck stops?

Retirement income can come from Social Security, pensions, retirement accounts, investments and other sources. Taxes, Medicare premiums and healthcare expenses can change what actually reaches your pocket. My advice is simple: before retiring, know your retirement paycheck.

Could you estimate your monthly retirement income right now? If the answer is no, you are not alone, and the rest of this article walks you through how to find it.

Why Your Account Balance Is Not Your Retirement Income

For 30 or 40 years, your finances ran on a simple rhythm: a paycheck came in every two weeks, and you built your life around it. Your 401(k) balance was something you checked now and then.

Retirement flips that. Your savings now have to become the paycheck. A $1,000,000 balance sounds like a lot of money, but the real question is how much of it you can spend each month without running out, after taxes and healthcare, for what may be a 25 or 30 year retirement.

That is why I talk about a retirement paycheck instead of a retirement number. A number tells you what you have. A paycheck tells you how you will live.

Where Your Monthly Retirement Income Comes From

Most retirees build their monthly income from a mix of sources. Each one behaves differently, and each one is taxed differently:

• Social Security. The foundation for most retirees. Your benefit depends on your earnings history and the age you claim. Claiming at 62 can mean a permanently smaller check, while waiting to 70 can mean a larger one. Learn more about Social Security optimization.
• Pensions. If you have one, you may need to choose between a lump sum and monthly payments, and between a single life or joint survivor option. See pension lump sum vs. monthly payments.
• 401(k), 403(b) and IRA withdrawals. These accounts turn into income through planned withdrawals. Traditional (pre-tax) withdrawals are taxable as ordinary income, and required minimum distributions start in your 70s.
• Roth accounts. Qualified Roth withdrawals are generally tax-free, which can make them a valuable tool for managing your taxable income.
• Taxable investments and cash. Brokerage accounts, savings and CDs can fill gaps and provide flexibility.
• Annuities. Some retirees use an annuity to create guaranteed lifetime income for part of their budget. Guarantees are based on the claims-paying ability of the issuing insurance company. Learn more on my annuities page.
• Part-time work, rental income and other sources. Even a modest paycheck can reduce pressure on your savings. Watch my video on working part-time in retirement.

From Paper to Pocket: A Hypothetical Monthly Retirement Paycheck

Here is where many retirement plans fall short. The income you see on paper is not the income you get to spend. Let’s look at a simple example.

Imagine a married couple, both 67, retiring in Kissimmee. They receive $4,200 a month in combined Social Security benefits and have $1,200,000 in traditional IRAs. They plan to withdraw 4% a year, or $4,000 a month. On paper, that is $8,200 a month. Here is what it may look like once taxes and healthcare are counted:

In this example, about $1,130 a month, roughly 14% of the income on paper, goes to taxes and premiums before the couple buys a single bag of groceries. And this does not count copays, prescriptions, dental work or the rising cost of healthcare over time.

The numbers change quickly with your situation. A larger IRA withdrawal, a pension or a big Roth conversion can push more of your Social Security into the taxable column and, at higher incomes, trigger Medicare surcharges. You can model your own tax picture with my free Retirement Tax Calculator.

The Hidden Costs That Shrink Your Retirement Paycheck

1. Federal taxes on Social Security and withdrawals

Up to 85% of your Social Security benefit can be subject to federal income tax, depending on your “provisional income” (roughly, your other income plus half your Social Security). For married couples filing jointly, taxation begins above $32,000 of provisional income, and above $25,000 for single filers. Traditional 401(k) and IRA withdrawals are taxed as ordinary income.

2. Medicare premiums and IRMAA surcharges

The standard Medicare Part B premium is $202.90 a month per person in 2026, and it is usually deducted right from your Social Security check. If your income from two years earlier is above $109,000 (single) or $218,000 (married filing jointly), you may pay higher Part B and Part D premiums, called IRMAA surcharges.

3. Healthcare costs before and after 65

Supplement or Advantage plan premiums, prescriptions, dental, vision and hearing care can add up to one of the largest expenses in retirement. If you retire before 65, you also need a plan to bridge the gap to Medicare. Explore your options on my Medicare insurance and healthcare planning pages.

4. Inflation and market risk

A paycheck that feels comfortable at 65 may not stretch as far at 80. And if markets fall early in retirement while you are withdrawing, your savings may not recover the same way. This is one of the main reasons retirees run out of money, and why I explain why living off returns alone can ruin a retirement plan.

Retirement Income in Florida: What Orlando and Central Florida Retirees Should Know

Florida is one of the few states with no state income tax. Your Social Security, pension, 401(k) and IRA withdrawals are not taxed by the state, which is a big reason so many people retire to Orlando, Kissimmee, Lakeland, Ocala and Tampa. For new residents, properly establishing Florida domicile matters.

But no state income tax does not mean low costs. Central Florida retirees often face rising homeowners insurance premiums, property taxes, HOA fees and hurricane preparation costs. These belong in your monthly budget, too. If you are still deciding where to live, my guides to retiring in Florida and the most affordable places to retire in Florida can help.

Not in Florida? The same questions apply in every state, and many states do tax retirement income. I work with clients across the country through virtual retirement planning, so we can build your retirement paycheck wherever you live.

How to Calculate Your Monthly Retirement Income in 5 Steps

1. List every income source. Get your Social Security estimate from your my Social Security account, plus any pension statements, and note when each source begins.
2. Estimate a sustainable withdrawal from your savings. Many planners start with a range of about 3% to 5% a year, then adjust for your age, investments and goals. This is a starting point for discussion, not a guarantee.
3. Subtract taxes. Estimate how much of your Social Security will be taxable and what bracket your withdrawals will land in.
4. Subtract healthcare. Include Medicare Part B, supplement or Advantage premiums, Part D and a realistic amount for out-of-pocket costs.
5. Compare it with your spending. Build a real monthly budget, including the “lumpy” expenses like a new roof, a car or travel. The difference is your gap, or your cushion.

If there is a gap, finding it before you retire gives you the most options. Some of the strategies people use include working a little longer, adjusting when to claim Social Security, changing the order of withdrawals, adding a source of guaranteed income, or adjusting the lifestyle budget. These are only some of the options, and the right mix depends on your situation, which is why a free consultation to analyze it is the best next step.

Not sure where you stand? Take my free 60-second Retirement Readiness Quiz.

Frequently Asked Questions About Monthly Retirement Income

How do I know how much monthly income I will have in retirement?

Add up your expected monthly income from Social Security, pensions, annuities and planned withdrawals from your 401(k), IRA and other savings. Then subtract federal and state income taxes, Medicare premiums and other healthcare costs. What is left is your estimated spendable retirement paycheck.

How much monthly income can $1 million generate in retirement?

Using a 4% withdrawal rate as a starting point, $1 million could provide about $40,000 a year, or roughly $3,333 a month, before taxes. This is a hypothetical guideline, not a guarantee. The right withdrawal rate depends on your age, investments, other income and how long your money needs to last.

Is Social Security taxed in Florida?

No. Florida has no state income tax, so Social Security, pensions and retirement account withdrawals are not taxed by the state. However, up to 85% of your Social Security benefit may still be subject to federal income tax, depending on your other income.

How do Medicare premiums affect my retirement income?

The standard Medicare Part B premium is $202.90 a month per person in 2026, and it is usually deducted directly from your Social Security benefit. Higher earners may pay more through IRMAA surcharges on Part B and Part D. Supplement, Advantage and drug plan premiums can reduce your monthly income further.

How much monthly income do I need in retirement?

A common rule of thumb is 70% to 80% of your pre-retirement income, but your actual spending matters more than any rule. Many retirees spend more in the early, active years and on healthcare later in life. A detailed monthly budget is the best way to find your number.

Do I need to live in Orlando to work with Roger Fishel?

No. Roger Fishel Financial is based in Kissimmee and serves Orlando and Central Florida in person, and clients nationwide by video.

Know Your Retirement Paycheck Before You Retire

You spent decades building your savings. The next step is turning them into a reliable monthly paycheck that covers your lifestyle, after taxes and healthcare, for the rest of your life. A coordinated retirement plan brings your income, Social Security, taxes and Medicare together so each decision supports the others.

Whether you live in Orlando, Kissimmee or anywhere in the U.S., book a free consultation with me, Roger Fishel, and let’s find out what your retirement paycheck really looks like. Prefer to call? Reach me at (407) 974-7100.

Watch more retirement planning videos and subscribe on YouTube for the next episode of my Retirement Mistakes series.

This content is for educational purposes only and does not consider your personal situation. The example above is hypothetical and does not represent any specific investment or result. Neither the firm nor its agents or representatives may give tax or legal advice. Consult a qualified professional before making decisions.