Retirement is an exciting time for couples to take stock of their lives and plan the next chapter.
It’s also uncertain, as those near retirement must decide how much money will be enough during the upcoming decades. What real monthly income allows retirees to pursue all of their dreams?
To answer this question, it helps to consider the various sources available for funding—namely Social Security payments, pensions (if available), withdrawal rates from other investments & savings, and whether or not part-time work should factor into calculations.
Read on for expert insights into ensuring that retired life doesn’t mean living paycheck-to-paycheck!
Consider Using A Retirement Planning Calculator
You and your partner can refine financial objectives to better suit your circumstances with the help of a retirement income planning calculator.
This tool will give you a more comprehensive understanding of your current financial standing and the potential outcomes of various retirement savings strategies.
Furthermore, it will provide valuable insights on how best to allocate funds, enabling you and your spouse to make informed decisions tailored toward achieving long-term financial stability.
When you put figures into the equation, you can observe what would happen if different decisions were made, such as investing a different sum each month, making a large initial deposit, or saving more later.
A great advantage of using a retirement money planning calculator is that adjusting some variables can make it more individualized.
For instance, you can change the rate at which your savings will grow or estimate the inflation rate soon.
If comparing all your options on a retirement planning calculator seems overwhelming, consider contacting a financial advisor who can assist you in making these calculations and establishing an appropriate savings plan.
Benchmarks For Married Couples On Retirement Savings
Financial specialists suggest that a couple aged sixty with a combined guaranteed income of $75,000 annually should have amassed a retirement fund equivalent to seven times their collective household income.
This means they should have saved approximately $525,000 to sustain their desired lifestyle during retirement.
A couple aged 65 living on a single income of $75,000 per annum should have amassed approximately $562,500 in their retirement account by faithfully setting aside seven and a half times their annual salary.
This comprehensive estimation brings the total savings to an impressive $525,000.
Factors Affecting Retirement Planning For Couples
According to Thrivent’s 2023 Valentine’s Day survey, it was discovered that less than half of Americans have a retirement plan in place with their partner, even though each couple has distinct needs and circumstances.
Even though individual preferences and situations may differ greatly, many couples still need to take the time to discuss their financial objectives together and develop a retirement strategy accordingly.
Unfortunately, this means they need to take advantage of opportunities to secure their economic well-being in later years.
To begin planning for retirement as a couple, it’s essential to have ongoing conversations about how much money is needed. Consider these five factors when discussing this topic:
How Much Will You Live On?
Retirement can be costly, as studies have revealed that retirees tend to spend approximately 80% of their pre-retirement funds. Bearing this in mind can be very useful when putting together your budget.
You could lower your lifestyle costs to 70% or increase them to 90%. If you know, you’ll be going on trips, trying out new hobbies, or spending more money in other ways; you may even want to raise it even higher.
Confirming your target savings number with each other is extremely beneficial regarding retirement planning. One way to do this is by creating sample budgets and exploring the most important questions about retirement planning.
How Much To Withdraw From Retirement Savings Annually?
Even after you and your spouse have retired, retirement savings will still be increasing; however, the growth rate may need to catch up with the amount of money being taken out, resulting in a shrinking total balance.
Retirement savings should stay relatively high, as having them last until you no longer need them is preferable. Therefore, the balances should decline gradually.
Many years ago, individuals were suggested to withdraw 4% annually from their investments.
However, this amount can change due to the market’s performance in a given year, other sources of funds available, and one’s expenses for the year.
During economic hardship, some people opt for a more conservative approach. In contrast, others are more willing to deplete their savings in an emergency, as they can access other payment methods.
Couples should consider together if a consistent withdrawal rate should be maintained or if the amount would be adjusted annually.
You and your partner desire to agree on how your retirement income and outlay will need to be adjustable over time to fulfill all your objectives and offer the way of life you have been striving for.
Your Other Assets, Income, And Pensions
If you and your partner have a rental property that produces reliable revenue, consider selling any assets (like land) when you retire or access a pension or annuity.
This can be considered when computing the total money needed for retirement. A financial advisor experienced in retirement planning can make the process less difficult and give you more confidence, although you may decide to handle these matters yourself.
How Much To Receive From Social Security?
Social Security will likely provide you with an average retirement income if you both need to retire soon.
Nevertheless, in most scenarios, people require 70-90% of their working income when they cease working, meaning they may need more than Social Security to support them adequately.
Considering your expected Social Security income, you can plan for retirement more efficiently.
This means that instead of relying on your retirement savings to cover all expenses after retiring, part of the burden can be alleviated by the money received from Social Security.
Understanding and planning with this in mind will help you maximize your available resources.
If you and your partner are relatively young, with many years left until retirement, there is no definite answer about how much you should rely on Social Security for your later years.
Formulating a plan for living on reduced Social Security income is sensible when preparing for retirement since you already have time to consider it.
Consulting A Financial Advisor
Mapping out a retirement strategy and figuring out how much money is required for a comfortable retirement is something that many couples struggle with. You and your spouse are no exception.
A Thrivent financial advisor can assist you in determining what types of savings will likely provide a comfortable standard of living for you, even throughout an extended retirement period.
They can guide developing a plan that emphasizes some of your savings and seeks growth to your savings to maintain their value over time.
Figure Out A Good Monthly Retirement Income For A Couple
In conclusion, it can be challenging to determine how much income will be enough for couples after they retire.
Ultimately, the answer depends on their goals and lifestyle. Rather than aiming to make a certain dollar amount in pre-retirement income, couples should create an income stream that meets their needs while not using up too much of their retirement savings simultaneously.
This can include various sources, such as Social Security benefits, pension plans, and other investments.
Additionally, couples should establish an emergency fund separate from their retirement account to help them if unexpected expenses arise.
Timely financial planning and budgeting can ensure couples’ money will go further in retirement to enjoy financial Security for years.
