Key Takeaways:
• A “good” monthly retirement income for a couple covers the essentials with room for comfort and unexpected costs.
• With Social Security, pension income (if any), and steady withdrawals from retirement savings, retirees can have a reliable paycheck after leaving the workforce.
• Couples can map out a 12-month budget, accounting for claiming ages, tax withholding, and other key factors to consider what retirement may look like for them.
When it comes to retirement planning for couples, the final figure must be sufficient to support two people and account for two different employment timelines (one spouse may work longer), Social Security, and health coverage needs. A good monthly income should cover essentials and leave room for flexibility.
The ideal target amount varies depending on where you live, whether you rent or own, and how much you rely on healthcare benefits. In this guide, you’ll learn how to develop a reliable retirement plan for two, how to prioritize expenses, the types of retirement income you may be able to lean on, and how American Hartford Gold could fit into your plan.
What Is a “Good” Monthly Income for Two?
A “good” monthly retirement income is one that covers your core needs with some wiggle room for discretionary spending and emergencies. For most couples, the primary needs are housing, food, transportation, healthcare costs, and taxes. Common discretionary spending categories include travel, hobbies, and gifts, among others.
Most households aim to replace the vast majority (if not all) of their working income, but this is not always possible or necessary. The goal should be to ensure your budget produces what you need to live with room to enjoy life, and you may not need your full working amount to do that.
Write down your current bills and determine which ones will shift in retirement and which ones will not. Then subtract any expenses that have an end date, like the costs associated with commuting to work. Be sure to include costs that may increase, like Medicare premiums, and account for new ones, too, like taking on a hobby.
What Are Your Core Household Expenses?
Housing is typically the largest expense in retirement, even without a mortgage payment. Property taxes, home insurance, and necessary maintenance can be costly. Renters, on the other hand, are often subject to annual increases that vary across different markets.
Food and household supplies also add up over time, and prices can shift based on diet, store location, and how frequently someone is purchasing groceries, among other factors. Additionally, even without a work commute, getting around still costs money.
Two drivers may still want their own cars, which means setting aside money for fuel, insurance, repairs, and regular maintenance. Healthcare costs are also important to plan for, especially since they tend to increase with age. Most retirees enroll in Medicare at age 65, and the total cost extends beyond the base premium.
Many also add supplemental coverage and a drug plan, which increases the monthly amount, but can lower the risk of having to take on high out-of-pocket costs. Taxes also need to be considered. Traditional 401(k) and IRA withdrawals are typically taxed as ordinary income, and Roth withdrawals can be tax-free as long as the conditions are met.
How Can Location and Lifestyle Impact Budget?
The area you choose to live in can increase your cost of living significantly, meaning you’ll need to set more money aside for retirement. Property taxes, state income taxes, or costly insurance premiums could force you to adjust your target amount.
Utility costs vary by climate, and homeowners in areas that get extremely warm or cold will likely pay more for utilities than those who live in climates that remain relatively stable all year. Some couples opt to downsize or relocate to give their budget some breathing room.
Others choose to remain where they are and make the adjustments they need to continue living in the neighborhood they love. Additionally, a couple who enjoys frequent travel or entertainment will need to set aside more discretionary income than one who lives a quieter lifestyle.
How To Create a Monthly Retirement Paycheck
Set an annual figure that aligns with your goals, then divide it by 12 to determine what your monthly deposit will be. Each year, increase your budget accordingly to keep up with fluctuating prices, and you can lower this increase or skip it altogether if markets are rough. You can automate transfers from your IRA or brokerage account to your bank.
Withholding taxes on retirement withdrawals can also be automated so there are no surprises. Traditional accounts are taxable at the time of withdrawal. Roth funds can be tax-free when the required conditions are met. Note that taxable accounts can produce dividends and gains that push you into a higher income bracket, which could increase your tax obligations.
Mapping Out Your Monthly Plan
Begin by calculating how much of your monthly income will come from Social Security and any other sources. Subtract that figure from your target, and the remainder is what you will need to produce. Next, pick a withdrawal amount that covers the gap you need to fill, and set it to arrive on the same day each month.
You can withhold a reasonable percentage for federal and state taxes if applicable. Revisit your plan a couple of times each year as food prices, medical, or other needs change. It’s also good to have a small cushion (one or two months of expenses) in a linked savings account so there are funds you can access quickly if needed.
Testing Out Your Budget Before Retirement
A stress test can confirm whether your monthly goal will feel comfortable to live on or not. Write down three versions of your budget. The first will be for essentials only. The second includes your discretionary spending. The third accounts for a month that includes a big trip, a new roof, or an unexpected event.
Compare those three budgets against your income plan spanning a full year. This will help you understand if your planned savings target can hold up in months with both typical and extreme spending. It is also good to consider a few other factors. If both spouses are not the same age, for example, one may enroll in Medicare earlier than the other.
This can alter premiums and out-of-pocket costs for a period of time. Additionally, property taxes and insurance bills often group up in certain months, which could strain the budget. It’s also important to remember that required minimum distributions (RMDs) begin later in life for many retirement accounts, typically when you reach 73, which can increase your taxable income.
Leaving Room for What-If Cases
Take some time to think through a few “what-if” cases. What if one spouse wants to work part-time for a year or two? What if a child or parent needs financial help for a while? What if you decide to relocate to be closer to family? You can then adjust the plan as needed to account for these potential events.
Home and car repairs are another important “what-if.” What if a roof or HVAC system needs repairing? What if a vehicle is getting quite old and needs to be replaced soon? Plan for these events so you are prepared ahead of time. Waiting until things happen to deal with them could put you in a stressful position.
Diversify Your Retirement Holdings With AHG
A “good” monthly retirement income for a couple is the number that covers your core expenses, accounts for potential emergencies and unexpected life events, and leaves room for discretionary spending. Everyone’s life is different, so consider which line items are most important to include in your budget.
If you’re curious to learn how you could diversify your retirement assets with American Hartford Gold, a Gold IRA is an option. This self-directed retirement account allows you to store physical gold in an IRS-approved depository while reaping the benefits it can bring to your portfolio. Learn more about precious metals and how they could fit into your future planning today.
FAQs
How much do most couples spend each month during retirement?
Spending varies widely by location, housing status, and health or other needs. If you’re curious to know what you may spend during retirement, add up your personal essentials, then include a buffer for discretionary items and the unexpected.
Should both spouses claim Social Security at the same time?
Not always. Some couples claim the lower earner’s benefit earlier while the higher earner waits to ensure a larger payout. Others prefer claiming together near full retirement age (FRA). The decision you make will depend on your cash flow, survivor benefit plan, and employment path.
What if we want to relocate in retirement?
Compare your new location against the same budget template you use now. Consider property taxes, insurance, rent or mortgage payments, and healthcare premiums in the new area. If the new total is lower, you may be able to meet your monthly goal with less savings. If it is higher, you will need to determine whether the lifestyle adjustment is worth the additional cost.
Sources:
2026 Medicare Premiums Announced, Last Weeks of Open Enrollment | Medicare Rights
401(k) Withdrawal Rules & Distribution Taxes | H&R Block®
