What is a Good Monthly Retirement Income for a Couple
Retirement is a significant milestone, and planning for a comfortable life during this phase is crucial. One of the most common questions couples face is, "What is a good monthly retirement income?" The answer varies depending on individual circumstances, but this guide will help you estimate a figure that aligns with your lifestyle and financial goals.
Understanding Your Retirement Needs
Retirement income needs are influenced by several factors, including but not limited to:
Lifestyle Preferences: Do you plan to travel extensively, or will you have a more low-key retirement? If you plan to travel in retirement you will likely have more expenses than someone who does not.
Location: Living in an urban area or a state with a high cost of living will require a larger monthly income than a rural or low-cost location.
Healthcare Costs: Medical expenses often increase with age and can make up a significant portion of your budget.
Debt Obligations: Mortgages, loans, or credit card debt can impact your monthly needs.
Inflation: Consider how rising costs over time could affect your purchasing power.
Sources of Retirement Income
Once you have figured out the total expenses you will have in retirement, we will then need to figure out how to pay for the expenses. To meet your monthly retirement goals, consider combining various income streams:
Social Security: The average Social Security benefit for couples is around $2,800–$3,000 per month. To see what your Social Security income will look like go to the Social Security website and log in.
Pension Plans: If you have access to a pension, this can provide a stable income source.
Retirement Accounts: Withdrawals from 401(k)s, IRAs, or similar plans can supplement your income. For most people, this can be one of the strongest income sources outside of social security.
Investments: Dividends, rental income, or annuities can further boost your monthly funds. Some retirees have brokerage accounts that provide a passive income source along side their 401ks and IRAs
Part-Time Work: Many retirees choose to work part-time, both for income and to stay active.
The 4% Rule: A Starting Point
Many financial planners suggest the 4% rule as a comfortable withdrawal rate for retirees. The aim is for you and your spouse to only pull 4% of your retirement assets of your pre-retirement income as your monthly retirement income. It’s important to realize that the 4% rule is not really a rule so much as it is a template. If you so wanted you your withdrawal rate could be 2% or 3%.
Please know that the more you increase your withdrawal rate the more you risk the longevity and sustainability of your retirement portfolio. We do strongly suggest reaching out to a financial professional to help you determine the appropriate retirement withdrawal rate.
Here is an example of a monthly retirement income for a couple:
Let’s assume that you and your spouse reviewed all of your annual expenses and determined that you would need $100,000 in gross income for retirement. We are assuming that you do not have any other assets outside of your 401ks. Once you have the total amount your will need to produce for retirement you can run this equation. For the purposes of this example we will assume a 4% withdrawal rate.
(Total Expenses) / (Withdrawal Rate) = Total Retirement Assets Likely Needed
($100,000) / (.04) = $2,500,000
In this example, we divided the $100,000 expected annual expense against .04 (or 4% withdrawal rate). We are then left with $2,500,000 that we should have in our retirement accounts.
It’s important to try and figure out this number years in advance to actually retiring. You may find that you are not saving enough for retirement. If you try and figure out this number before retirement, you can make changes to your savings rate to help get you to your number.
While this has been used for many years in past market scenarios, this number does not guarantee that you will have enough for retirement as market conditions can dramatically impact the longevity of a portfolio. Make sure your portfolio is properly managed to help you navigate through the tough times of the market.
If you need assistance with managing your portfolio for retirement, you can connect with our team here.
Budgeting for a Secure Retirement
Creating a budget tailored to your goals can help increase the chances you won’t outlive your savings. Here’s how:
Track Expenses: Understand how much you spend on essentials and discretionary items.
Plan for Emergencies: Set aside funds for unexpected healthcare or home repairs.
Account for Longevity: With people living longer, it's wise to plan for at least 20–30 years of retirement.
Final Thoughts
A good monthly retirement income for a couple depends on your unique situation, but a solid starting point is the 4 rule or around for a comfortable lifestyle. By assessing your expenses, leveraging multiple income sources, and preparing for the future, you can achieve a retirement that’s both secure and enjoyable.
Are you ready to plan for your retirement? Start today by calculating your monthly needs and exploring ways to maximize your savings and income streams. A comfortable retirement is within reach with the right strategy!
Ready to get started?
Contact a retirement planning advisor in Spartanburg, SC. To schedule your free consultation click here!
Disclosure
IntelliVest Wealth Management is a Registered Investment Advisor Headquartered in Spartanburg South Carolina. This is not a solicitation. Please consult with IntelliVest Wealth Management about your personal financial situation.
