What Is A Good Monthly Retirement Income For A Couple?

Image depicting a roadmap to retirement

What is a good monthly retirement income for a couple? The anticipation of newfound freedom and leisure comes at a price, and planning ahead to enjoy retirement to the fullest is important.

Let’s explore the intricacies of retirement planning, the factors that influence retirement income, and provide actionable insights to ensure a secure and fulfilling retirement journey. Whether you’re contemplating your retirement goals, estimating expenses, or strategizing for long-term financial security, this blog provides a comprehensive roadmap to guide you toward a comfortable and sustainable retirement lifestyle.

Key Takeaways

Table of Contents | Monthly Retirement Income For A Couple

Assessing Your Financial Health

Any journey must start with figuring out where you are. Obviously, it’s also important to know where you want to go, but even if you’ve got that nailed down, if you don’t know where you’re starting from, it will be impossible to plan a route to your destination.

In retirement, your starting point should be to analyze your current financial situation. What are your assets? What are your liabilities? When do they need to be paid off? How much do you need to meet your living expenses? How much income are you earning? And do you have any surplus after using your income to pay your living expenses? The answers to these questions determine your current financial situation. This is where you’re starting from.

The FDIC provides a great template to use but so do many online websites and financial software packages. Whatever form you use as a template, the goal is to accurately assess all your assets, liabilities, income, and living expenses. 

Putting together a list of everything you have is only the beginning. Not all assets are the same. Within this listing, you need to identify your investable assets. You cannot use all of your assets to fund your retirement. Some assets will never really contribute toward your retirement. 

For example, a “normal” car (meaning a car that is not an antique or collectible) will not contribute to your retirement. Most cars provide transportation, but they begin losing value the minute you drive them off the dealer’s lot. They will not help you attain your retirement goals.

Your primary residence typically does not contribute to your retirement unless you decide at some point to downsize. Downsizing usually means selling a home and purchasing a smaller, less expensive home for retirement. After you sell your current home, pay closing costs and any required taxes, and buy a smaller retirement home, the amount you have left over can contribute nicely to your investable assets. 

Your investable assets are those that you can invest to earn an investment return and generate the needed cash flow to fund your retirement. These are generally referred to as your financial portfolio. Understanding what constitutes your financial portfolio is critical to successfully planning for retirement. These are the assets that comprise your retirement savings. 

Sadly, in the U.S., the average couple’s retirement savings are inadequate. According to USAFacts, almost one-half of American households had no savings. For the remainder, the vast majority do not have enough savings to fund retirement.

This is not to say that everyone’s retirement goals are the same; they are not. But the statistics are sobering. Across the board, too few Americans are adequately prepared for retirement. One of the key reasons for this is they haven’t gone through the simple process above to assess their financial health, let alone take the next step, which is to determine what they want retirement to be. 

Determining Your Retirement Goals

What are your retirement goals? Do you simply want to continue enjoying your living standard (your living expenses)? Do you want to add some expenses for a long-sought second home or trip you’ve always wanted to take? Will some of your normal expenses go away during retirement? Are there new expenses that you’ll have during retirement? The answers to these basic questions and others unique to your specific situation will help you determine your retirement goals.

What is a good monthly retirement income for couples? The simple answer is “enough to meet your retirement goals and sustain your retirement savings against the ravages of inflation. Typically, it is not enough to simply have sufficient retirement income to meet retirement expenses. If that’s all you do, you will gradually see the value of your retirement assets deteriorate over time. The right amount of retirement income is the amount that sustains this living standard as it increases with inflation and grows the balance of the retirement assets, so they, too, keep up with inflation.

By way of a quick example, let’s consider how the 3% long-term average inflation rate affects retirement. If you have $1 million generating $50,000 in earnings at the beginning of retirement, in 20 years, you’ll need approximately $2 million generating $100,000 in earnings just to stay even with inflation over that period. If you don’t, then you will be falling behind. 

How bad can that be? Unfortunately, too many retirees only set the simple goal of maintaining their principal balance at the beginning of retirement. The sad reality is – using our example above – if you end retirement 20 years later with the same $1 million from our example above, you will only be able to purchase one-half the everyday items you need or want in retirement. Even if you have the same $50,000 in earnings from our example, that will only purchase $25,000 worth of gas, food, clothing, medical care, etc. At 3%, inflation will roughly double prices in 20 years. 

The average American spends about 20 years in retirement. Your current retirement living standard will cost about twice as much in 20 years. A $5.00 coffee today will cost almost $10.00 in 20 years, and a burger for $10 today will cost almost $20 in 20 years. 

Estimating Retirement Expenses

As you can see, it is critical that you accurately assess what your retirement expenses will be in retirement. As we pointed out above, you need to start by calculating what those living expenses are today, but you’ll have to live with tomorrow’s expenses in retirement, not today’s expenses. Some expenses will decrease or go away because you won’t need them; most expenses will simply grow with inflation, but some expenses will increase substantially more as you age. Healthcare costs, for example, typically increase faster than the general level of inflation.

As mentioned above, calculating your current living expenses is a starting place. Your basic living expenses, like housing, utilities, food, and transportation, are obvious. There are other retirement expenses to consider, but in the end, the full list of retirement expenses will be unique to each person or couple. 

The basics are just that – basic. However, everyone has unique health issues, and their healthcare costs may increase by more or less than national averages up to and through retirement. Likewise, different people will factor in different leisure and recreation expenses. Some hobbies are very expensive; some trips are easy, while others are bucket list occurrences and are priced accordingly. 

As you can see, the average retirement income needed for a couple will differ from one couple to another. That means how much a couple should have for retirement will differ significantly. Calculating your current living expenses and then estimating your future retirement expenses is critical to enjoying a successful retirement. Once you do that and have a good sense of what it will cost to enjoy the retirement lifestyle you want in the future, you have to figure out what you should have in that nest egg when you hit retirement. You need the right amount to fund your retirement lifestyle and to keep the principal balance growing with inflation.

Strategies For Generating Retirement Income

When you finally retire, the planning needs to shift from solely accumulating enough assets to meet a couple’s retirement income needs to then actually generating that income. You might think this is easy; if you’ve already estimated your retirement expenses properly and saved the appropriate nest egg, isn’t it a simple matter of “turning on” the faucet to let all this income flow into your checking account? 

In one sense, you could do that. You can take social security when you’re first eligible, you can accept whatever pension option feels like the best option, you can withdraw any arbitrary amount you want from your IRAs or 401Ks, you can withdraw only the required minimum withdrawal (RMD) from those IRAs or 401Ks, or you can simply withdraw the interest and dividend income which your portfolio generates. Those are all retirement income options. But they are not all equal options.

Account Withdrawals

Some withdrawals cause more income taxes than others. IRA & 401K withdrawals are 100% taxable, but Roth withdrawals are tax-free, and withdrawals from joint or trust accounts are typically only partially taxable. If you don’t pay attention to tax consequences through your retirement years, you’ll pay more in total taxes than you need to pay.

Some investments, such as dividend stocks, bonds, and real estate, can generate less interest and dividend income than the total return they generate. If you limit yourself to interest and dividend income only, you may be leaving money on the table. You should take a “total return” approach to these investments when deciding how much to withdraw.


Some pensions offer very attractive high withdrawal rates, but only at the expense of the surviving spouse and your family. You should consider how long you need the annuity to survive when picking the withdrawal option.

Social Security

Social Security benefits can significantly increase if you postpone claiming your benefits for a few years. The goal should be to maximize the anticipated total lifetime benefits paid based on your life expectancy and other income sources you have.

Side Hustle or Part-Time Work

You might even consider a side hustle or part-time work if there’s something you truly enjoy doing and if you have the energy and time to pursue it. Every dollar you earn through employment or a little business you run helps you in two ways: it reduces the amount you need to tap from your nest egg, and it extends the life of your nest egg. 

You May Need Additional Planning

Generating retirement in retirement requires some additional planning if you want to maximize your cash flow while also preserving your principal balance and minimizing your taxes. There is no one-size-fits-all perfect way to actually generate your retirement income.

Here also, there is really no such thing as an “average couple’s retirement income,” and what is good retirement income for one couple may not be good retirement income for another couple. It is a very individualistic need; therefore, how you meet that need will be individualistic. 

You need to do what’s right for you. Longer life expectancies today, along with the investment options you pursue, all factor into how to best generate the retirement income you need.

While investment structure is not the scope of this blog article, it is still important to determine how to generate retirement income. In retirement, the sequence of returns becomes important. When accumulating your retirement nest egg, it doesn’t matter all that much when the stock market is up and when it is down. Throughout your investing life, it will be both up and down. Which years are up and which are down is known as the sequence of returns.

When you enter the retirement stage and withdraw from your retirement nest egg, the sequence can have a significant impact and even determine success and failure. While it is never possible to predict the sequence of returns, it is very possible to protect yourself from an adverse sequence. 

Again, this is beyond the scope of this blog article, but the best approach requires consistent monitoring of your returns against established benchmarks and targets on a regular basis. “Setting it and forgetting it” is a recipe for disaster. Regular assessments can almost guarantee success if you take the necessary corrective actions when needed.

Let The Professionals Help You

Determining the right amount of retirement income and generating that income are not simple tasks. They require careful analysis and planning both in the years leading up to retirement and during your retirement years. You cannot rely on some abstract notion about the “average retirement income for a couple.” There is no such thing. Or at least, if there is an “average,” it is useless as a guide. 

Each couple’s retirement income needs are unique to their circumstances and goals. Getting this right is important and too complicated to do yourself. Professional, experienced financial advisors will help you and can make the difference between success and failure. You wouldn’t diagnose and treat your own severe illness, and you wouldn’t represent yourself in court on a serious charge. You’d hire a really good doctor for your medical needs and a really good attorney for your legal case.

Retirement planning requires the same approach with a few added considerations. In the financial planning industry, “advisors” are allowed to sell products and take commissions. This approach is fraught with conflicts of interest and usually results in poor planning but great product sales.

Fortunately, there is a solution. Today, you can take advantage of working with a 100% objective, fee-only fiduciary advisor. Financial advisors who rise to this level will always work in your best interest; they are legally required to do so. Their advice will always be objective; you’ll never have to worry whether their recommendations are excuses to sell you a mutual fund or an annuity. You will know with certainty that their advice is objective and represents their best assessment of what you must do to achieve your financial goals and dreams.

Objective, fee-only fiduciaries will walk through all the steps above, and the best ones will do so in a way that is easy to understand. There won’t be any mumbo-jumbo or fancy jargon. They will explain what you must do and why in plain, understandable language and provide clear, actionable steps. 

First Financial Consulting has 45+ years of experience as a fee-only, 100% objective fiduciary advisor. We have helped hundreds of clients determine what retirement income they will need, develop a plan to achieve it, and then help implement that plan consistently across the years and decades – not just up to the date you retire, but actually up to and all the way through retirement. If you want to learn more about how we help our clients secure their retirements, use the link below to schedule a complimentary meeting with one of our advisors. 

Greg Welborn is a Principal at First Financial Consulting. He has more than 35 years’ experience in providing 100% objective advice, always focusing on the client’s best interests.

Greg Welborn is a Principal at First Financial Consulting. He has more than 35 years’ experience in providing 100% objective advice, always focusing on the client’s best interests.

FAQ | Monthly Retirement Income For A Couple

What Is The Average Retirement Income For A Couple?

While we're sure there is some "average" across the United States, it is a totally meaningless number. What's right for you in your current situation, at your age, with your retirement goals, with your family, at this time in your city and state will be entirely different than what's right for another couple in their personal circumstances. The better question is, "What retirement income do you need?" 

What Retirement Income Do I Need?

Ideally, you need to generate enough total earnings from your retirement nest egg to cover your retirement living expenses, keep up with inflation, and maintain the real value of your retirement nest egg across your entire retirement. 

How Can I Maximize My Social Security Benefits?

You need to maximize your Social Security Benefits over your reasonable life expectancy. Easy answers like starting early so you receive benefits longer are as bad as easy answers like delaying as long as possible to receive the largest monthly benefit. The truth is you need to maximize your benefits across your entire remaining lifespan, and that can't be determined exactly. It's always a best estimate based on detailed analysis.

Should I Take The Largest Pension Payment Option Available?

The answer is similar to the question about maximizing Social Security benefits. You need to determine how long you want or need the pension payments to continue and whether you want your spouse and/or heirs to be able to enjoy any benefits. Once you determine the goal, you can determine which payment option is the best for you.

What Types of Investments Are Best To Generate Retirement Income?

The investments you use should be well-established, offer predictable average returns over your entire life (and perhaps beyond), provide sufficient diversification to protect you from substantial losses, and managed with professional help. But don't fall for the sales pitches. There are too many promises and too few results made by stock brokers and insurance & annuity salespeople masquerading as "professionals" or "advisors."

Should I Buy Annuities For Retirement Income?

Annuities are a unique financial product that can provide benefits in a very specific set of circumstances. Unfortunately, they pay very high commissions and get pitched as solutions for every problem imaginable. The reality is that annuities most often restrict your earning potential, lock up your money for unreasonable periods of time, and deprive your heirs of a meaningful legacy. 

Understanding Annuities

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