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What is a good monthly retirement income for a couple? The answer to this question differs for everyone because we all have various spending needs.
The short answer is enough to cover average monthly expenses — plus a bit of wiggle room.
But this article offers a data-driven answer based on U.S. government data for those 65 and older. Use these middle-of-the-road numbers as a baseline to compare against your situation.
My analysis of household averages estimates that a good monthly retirement income for a couple is $6,318.25.
Social Security covers about $3,571.88 per month, on average, requiring couples to generate an additional $2,746.37 of retirement income per month or about $33,000 per year.
Let’s call it $3,000 per month or $36,000 per year to pad it with wiggle room.
Read on to see how I estimated the numbers above. Once we’re through the baseline scenario, we’ll discuss how you can apply them to your financials to determine your retirement income needs.
All numbers in this article are estimates based on government data. I recommend using a comprehensive retirement calculator such as NewRetirement (review) to put more precise numbers and a timeline to your scenario.
Median Household Income for Retirees (65+)
Let’s first look at the median household income for those 65+. This will give us a baseline to help us determine a good monthly retirement income for a couple.
According to a survey by the U.S. Census Bureau, the median annual household income for folks 65+ was $75,819 in 2021. The average is much higher at $108,225, but that includes high-net-worth couples.
Median means half are above and half below that number, so it’s a better baseline for this exercise.
We can estimate the median monthly retirement income by dividing that number by twelve, and we get $6,318.25.
This number represents the median retirement income received from all retirement income sources for a household (which, for our purposes, means two people since we’re focusing on couples).
We’ll dig deeper into various retirement income sources in the section below.
Table of Contents
Average Social Security Income for Couples
By looking at Social Security Administration (SSA) data, we can determine the average monthly Social Security payment for couples. Our scenario uses the April 2023 numbers.
The average Social Security retirement benefit per person is $1,785.94 (“average monthly benefit”). This number includes retired workers and the spouses of retired workers.
We double that number to determine the total monthly household Social Security income, which gives us $3,571.88.
We’ll use this number to help us understand how much additional retirement income we need to generate to cover expenses.
Note: SSA does not provide median data for this scenario, only the average.
Average Non-Social-Security Retirement Income Needs
Now that we’ve determined the median household income for a retired couple and the average Social Security income for a retired household, we can estimate what is a good monthly retirement income for a couple to generate outside of Social Security.
Here’s the calculation:
Median Monthly Household Income (65+) = $6,318.25 Average Monthly Social Security (couples 65+) = $3,571.88 Retirement Income Needs (non-SSA) = $6,318.25 - $3,571.88 = $2,746.37
Our baseline scenario calculation tells us that a typical retired couple needs to generate about $2,746.37 in additional monthly retirement income (non-Social-Security) to cover all expenses.
The annual amount is $32,956.44.
Adding a bit of wiggle room, $3,000 per month or $36,000 per year is a good monthly retirement income for a couple to start with.
While this is a helpful benchmark, all couples should estimate their personalized numbers based on their spending needs.
If you spend less than $75,819 per year and receive about the average Social Security income, you would need to generate less than $3,000 per month.
If you spend more than $75,819 monthly, you’d need to generate more than $3,000.
Non-SSA Retirement Income Sources
Retirement income sources may include some or all of the following:
- Retirement account dividends/distributions
- Taxable account dividends/withdrawals
- Earned retirement income
- Rental property income
- Annuity income
DIY investors have income-producing sources and non-income-producing sources, which can affect how we generate spendable cash.
For example, our family is currently living off dividends, and we earn about $1,500 a month from stocks.
We simply transfer that cash from our broker to our checking account every month to spend it.
We also own growth stocks that do not pay a dividend. We’d have to sell some of those investments to generate income from growth stocks and incur a capital gain (taxable if not in a retirement account).
If you own mutual funds or ETFs, you likely receive regular distributions that can be used for spending, but more may be needed to cover expenses requiring the sale of assets.
Social Security, pensions, bonds, rental properties, and annuities are income-producing retirement sources.
However you go about generating the difference between your spending needs and the amount Social Security covers is dependent on your existing portfolio.
Determine the most efficient income or withdrawal strategy for your scenario. Online calculators such as the one at the end of this article can help if you are uncomfortable with paying an advisor.
How to Calculate What is a Good Monthly Retirement Income for Couples
Until now, we’ve been discussing medians, averages, and government data. Of course, you and your partner are humans, so you need to determine the needs of your situation.
Start with the expected average monthly expenses in retirement. For example, let’s use a couple that spends $64,000 per year or $5,333 per month.
Next, determine the monthly Social Security retirement benefit. Let’s say combined, the couple receives $3,200 per month in Social Security.
Average Monthly Household Expenses = $5,333 Average Monthly Social Security Income(for a couple) = $3,200 Retirement Income Needs (non-SSA) = $5,333 - $3,200 = $2,133
The couple would then need to find $2,133 per month to sustain their current lifestyle. Ideally, they’d want to generate more than that number to provide some wiggle room.
Another consideration is inflation. As the couple ages, spending and income will change.
If you can start your retirement by spending less and allowing your investments to grow longer, you may be able to increase spending as you age, which can be useful as healthcare expenses typically rise with age.
What if you Delay Social Security?
You’ll eventually earn a higher monthly benefit if you can avoid taking Social Security until age 70. Not everyone can wait.
But if you choose to wait, simply exclude the Social Security payments in your calculations when determining a good monthly income.
Ideally, it would be best to project your spending and income needs for every future year until your projected end-of-life date (an estimate used by financial planners based on actuary data and other factors).
This is where comprehensive online calculators are beneficial. The tools project income and spending needs with data and charts.
With more information at your fingertips, you can withdraw more of your savings before starting to receive Social Security, then reduce your savings drawdown once you start receiving it.
Best Retirement Income Calculator
The above examples are elementary to give you baseline numbers based on U.S. government averages. But most partners can use this exercise as a starting point to find a rough estimate of what is a good monthly retirement income for a couple.
However, if you’re a do-it-yourself retirement planner and investor, I recommend assembling a more serious forecast model to ensure you have enough money.
Fee-only fiduciary financial advisors can do this for you, but the cost may be excessive for your taste. If you fall into this category, there are low-cost retirement calculators that can handle even the most complex scenarios.
These calculators require straightforward inputs (income, assets, age, cash flow, etc.), and output estimations of how long your money will last decades out, accounting for investment returns, inflation, large expenses, and anything else you can throw at a retirement plan.
My favorite online retirement calculator is NewRetirement, which links to your accounts to provide updated calculators every time you log in.
It’s free to try for 14 days. That’s enough time to put in your numbers to see if you have enough income to retire. After 14 days, it’s only $120 per year — significantly cheaper than paying an advisor, and the tool updates every time you log in.
Advisors use similar software programs to do the same thing.
Check out my detailed NewRetirement review to see screenshots and scenarios I throw at the tool to see what it can do. It handled my somewhat complex scenario with ease.
The NewRetirement calculator can give partners a more precise answer to the question “What is a good monthly retirement income for a couple?” instead of guessing.
Read more: What is the Average Retirement Income for a Single Person?
Photo credit: Marie-Sophie Tékian via Unsplash
Craig is a former IT professional who left his 20-year career to be a full-time finance writer. A DIY investor since 1995, he started Retire Before Dad in 2013 as a creative outlet to share his investment portfolios. Craig studied Finance at Michigan State University and lives in Northern Virginia with his wife and three children. Read more HERE.
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