What should be the Goal for Monthly Retirement Income for Couples?

One of the most common questions among couples planning for their golden years is, what is a good monthly retirement income for a couple? The answer isn’t one-size-fits-all. Much depends on your lifestyle, expenses, and what you envision for retirement. This article dives into the factors you need to consider and how to set a goal for your retirement income.

1. Living Costs in Retirement

When planning for retirement, you should first consider how much it will cost to maintain your current lifestyle. This includes regular expenses such as:

  • Housing: Will your mortgage be paid off by the time you retire? If not, how much will you be paying monthly?
  • Utilities: Think about water, electricity, gas, and internet bills.
  • Food: How much do you spend on groceries, dining out, or ordering in?
  • Healthcare: As one age, healthcare becomes a significant expense. Consider medications, doctor visits, and insurance.

It’s also crucial to account for inflation. The cost of living tends to rise over time, so what seems like a sufficient amount now might not be enough in the future.

2. Leisure and Travel

Retirement is also the time many couples look forward to traveling, taking up hobbies, or simply enjoying leisure activities. You must factor these into your retirement income goals:

  • Travel: Do you plan to visit new countries or take regular vacations? Estimate the yearly cost.
  • Hobbies: Whether it’s golf, painting, or joining dance classes, hobbies come with expenses.
  • Entertainment: Movies, theater visits, concerts, or regular cable TV subscriptions.

3. Unexpected Expenses

Life is unpredictable. Even in retirement, unexpected expenses can pop up:

  • Home repairs: Your house might need a new roof, plumbing, or other repairs.
  • Medical emergencies: While you might plan for regular medical costs, emergencies can be expensive.
  • Helping family: Sometimes, you might want to financially support children, grandchildren, or other family members.

Having a safety cushion in your retirement income for such unforeseen costs can be a wise move.

4. Calculating Your Total Monthly Need

Once you’ve estimated your monthly expenses in the above categories, add them up. This will give you a clear picture of how much you’ll need every month during retirement. For instance, if your living costs amount to $2,000, leisure activities to $500, and you set aside another $500 for unexpected expenses, your monthly need would be $3,000.

5. Sources of Retirement Income

Now that you have a number in mind think about where this money will come from:

  • Social Security: This is a common source of retirement income for many. Find out how much you’ll receive monthly.
  • Pensions: If you or your partner have a pension, factor that in.
  • Savings and Investments: Calculate how much you can withdraw monthly from your savings without depleting them too quickly.

The sum of these sources should ideally match or exceed your estimated monthly need.

SoFi states, “Retirement savings refers to money saved in tax-advantaged accounts, such as a 401(k), 403(b), 457 plan, or Thrift Savings Plan (TSP). Whether you and your partner have access to these plans can depend on where you’re employed.”

Planning for retirement is all about ensuring you can maintain a comfortable lifestyle without the regular paycheck you’ve been used to. By breaking down the costs and understanding where your money will come from, you can set a realistic monthly retirement income goal. Remember, it’s always a good idea to review and adjust your goals as circumstances change and consider seeking advice from financial experts to make informed decisions.

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