Marriage is the most important part of life. From early age to retirement, a couple spends most of their time together. After years of service and homemaking, it is crucial to think about retirement life to make it a peaceful place to live. In this situation, a common concern arises: What is a good monthly retirement income for a couple?
Being a couple, planning for retirement is a vital step, because in the years of relaxation and no working, there should be a fixed monthly income on which you can rely. Let’s understand this concern deeply.
Retirement Needs For A Couple -Good Monthly Retirement Income For a Couple
The retirement savings needs for a couple vary based on different lifestyle goals. For example, if you want a normal life with basic need fulfilment, then the saved amount is different, and if you want a joyful life in which you travel, work on hobbies, or do the things you always wanted to do.
Basically, there is no exact value of retirement that will be needed by a couple. The most common numbers that roll around the retirement needs are the “70-80% rule”. This means if you want to live a peaceful life, then you need to have at least 70-80% of your pre-retirement annual income.
For instance, if you have $100,000 of annual gross income, then you need to have at least $70,000-$80,000 annually in retirement to live the desired lifestyle. However, this rule of thumb doesn’t consider important variables like debt, health costs, location, and personal goals.
What is the Average Monthly Retirement Income for a Couple?
Based on recent US Census Bureau and Social Security Administration data, the average monthly retirement income a couple should have is:
- Social Security only: Around $3,400–$3,600 per month combined.
- Total income including pensions, investments, and savings: Varies widely, but the national average for retired couples falls between $4,500 and $6,000 monthly.
The thing which needs attention is, this data is based on the files; this is not a threshold. Many couples have more monthly income than the data shows. So, save for retirement accordingly. An honest answer is there is no good monthly retirement income. This is because the income requirement highly depends on the lifestyle and other needs.
Factors Affecting Retirement Income For a Couple
There are some factors present that affect the retirement income for a couple directly, and the question, What is a good monthly retirement income for a couple, will remain unsolved. The factors are:
Cost of Living and Location
It is one of the most important factors that affect retirement income needs. States like California, New York, etc. have higher living costs than states like Tennessee, Mississippi, or Iowa. The average monthly retirement income by state will be approximately the same for all. It is very important to estimate the cost of living and then start saving for retirement accordingly.
Healthcare and Insurance
This is also important to notice. Healthcare and medical expenses affect your retirement savings a lot. Also, the insurance premiums and other long-term care bills affect the same.
Lifestyle Goals
This is only in your hands. The lifestyle you want to live or the lifestyle you want to maintain depends on your retirement savings. If you want to live a comfortable and lavish lifestyle, then you need to save more at the time of service, and if you want a normal life, then the average saving advice can be enough.
Debt and Loans
If you have a long-term debt or a loan, then you need to add this as an additional expense in the retirement income estimation. Also, try to pay off of the debts before the retirement to avoind extra burden on the retirement savings.
Taxations
You need to accept that not all retirement saving options are tax-free, even though most of them are subject to taxation. Whether at the time of contribution or at the time of withdrawal.
Latest studies and according to the US Census Bureau, an average couple needs $76,490/year, which is nearly $6374/month.
What is a Good Monthly Retirement Income for a Couple?
One of the most debatable questions is, how much do two people need to retire comfortably? This question can only be solved by breaking down the various expenses and monthly requirements.
- 4% Rule: This rule states that you can withdraw 4% of your total savings annually without running out of cash for at least 30 years. For example, if you want to withdraw $50,000 annually, then you need to have at least $1.5 million saved.
- Monthly Saving Breakdown:
| Category | Basic Lifestyle ($/Month) | Comfortable Lifestyle ($/Month) |
| Housing | $1,200 | $1,500 |
| Food and Groceries | $800 | $900 |
| Utilities | $300 | $400 |
| Transportation | $400 | $500 |
| Healthcare & Insurance | $700 | $1,000 |
| Insurance and Taxes | $400 | (Included in Healthcare above) |
| Leisure, Entertainment, Travel | $600 | $1,200 |
| Miscellaneous & Personal | $300 | $500 |
| Total | ~$4,700/month | ~$6,000–$7,000/month |
Again, this is an estimation, it is advised to save for your retirement based on your needs and future financial goals.
Strategies to Build a Strong Monthly Retirement Income
What is a good monthly retirement income for a couple or Planning for retirement requires a strategic approach rather than using the traditional ways. The future-oriented steps are as follows:
- Social Security benefits: Social Security benefits are given the individuals over the age of 62. If you delay the withdrawal till 70, then you can get the maximum possible monthly payments.
- Multiple Income Sources: The best way to increase retirement income is to add multiple sources like, 401(k), traditional IRAs, Roth IRAs, etc. With this practice, your overall monthly income at the time of retirement will be increased.
- Minimize Long-Term Expenses: Try to cut off most of the debts and permanent expenses like home purchase, before you retire.
- Part-time Work: If you can, then the best thing to do is to continue some part-time work which helps you with daily expenses, and your savings will remain intact.
Conclusion
The question, What is a good monthly retirement income for a couple, is simple but needs proper focus to understand. The monthly retirement income will depend on the couple’s requirements, lifestyle goals, and other expenses. On average, for a normal living, $4500 – $5000 is sufficient to fulfill all basic needs.
It is suggested to consult with your HR department or the bank’s savings department to understand the terms and policies. Also, if your budget allows, then try to contribute to multiple savings accounts to maximize the overall retirement income.
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Frequently Asked Questions
Can a couple retire on $6000 a month?
Yes, $6000 is really a good amount to have at the time of retirement, monthly. You can also increase this income by planning for your retirement from an early age. However, making proactive decisions before the retirement is essential to empower the retirement income.
What is the biggest expense in retirement?
There are many expected and unexpected expenses present in retirement, house, healthcare, and final expenses. One of the biggest expense in retirement is the healthcare or sudden medical emergency. This is because after the age of 60 years chances of various diseases and infections increase due to reducing immunity.
What is the best source of income in retirement?
There can be multiple sources like, social security benefits, 401(k) accounts, individual savings accounts, and other savings options. The assets you make from your employment life are the biggest source of income in the retirement.
How much money does a couple need to retire comfortably?
Experts say that a couple needs at least 70-80% of their last gross annual income before retirement, and after retirement, annually. However, the amount of money needed highly depends on the couple’s lifestyle and health conditions.
Is 70 too old to retire?
The average retirement age in the USA is 65 years, where all the benefits that an individual can get are achieved. But if you want to retire after the age of 70 and your body supports you, then it directly increases your after-retirement savings.
