​​What is the Average Retirement Income For Married Couples?

The average retirement income for married couples over 65 was $101,500 in 2020. Since high incomes tend to pull up the average, the median retirement income may be a better benchmark. The median income for married couples over 65 was about $72,800 in 2020.

Where does that retirement income come from?

From several different sources. Most married couples receive social security benefits, which can help cover the basics. But for most people, these benefits aren't enough to cover all their expenses. Supplemental income can come from other sources, like pensions, retirement savings accounts, 401(k)s, investments, part-time work, and annuities.

In this article, we provide you statistics for what the average married couple earns in retirement, and where that money comes from.

How Much Do Married Couples Get On Average from Social Security Alone?

As of 2022, the average monthly benefit amount from Social Security for couples was $2,739.10. That works out to about $32,868 in annual income.

Of course, the income that you can expect to receive depends a lot on your circumstances. The Social Security benefit is calculated using the 35 highest-earning years of your career. Then they are adjusted for inflation and cost of living adjustments. For details on how social security benefits are calculated, see information provided by the Social Security Administration (SSA).

Remember that many retirees have their Medicare Part B premiums deducted from their social security income checks. In 2022, this premium is about $170 per month for people earning $91,000 or less.

The important point is that your social security income won't fully replace your income. For most people, it replaces only about 40 percent of pre-retirement income, so there is a large gap to fill. That's why it's so important to save up your nest egg and make a plan for additional retirement income..

Maximizing Your Social Security Benefits

There are a few ways you can maximize your social security check.

First, you can choose to delay when you receive it. You can opt to receive your social security income as early as 62, but the longer that you wait, the larger your check becomes. If you wait until the full retirement age, your check will be larger. If you wait until you're 70, you'll earn delayed retirement credits, and earn the largest possible retirement benefit.

Note that what counts as the "full retirement age" depends on when you were born. If you're born in 1960 or later the full retirement age is 67. You can use this calculator to calculate your social security benefits or read this article if you're wondering if an annuity will affect social security benefits

If you're married, you can also coordinate with your spouse to maximize your retirement benefits. For example, a spouse that earns less may opt to receive their benefits early. This could allow the higher income earner to delay their benefits and ultimately earn larger payouts when their benefits begin.

If you're not sure, consider consulting a financial planner to learn more about how to maximize your Social Security benefits.

What Is a Good Retirement Income for Married Couples?

Note that the amount of income you will need in retirement depends on your cost of living. According to the federal Bureau of Labor Statistics, Americans who are 65 and older spent about $52,141 in 2022. So the average US resident needs an average monthly retirement income of about $4,3451.

Of course, the income you need depends on a number of factors. Your lifestyle, where you live, your life expectancy all play a role in how much income you need for retirement.

Sources of Retirement Income for Couples

Social Security by itself usually isn't sufficient for most people to maintain their pre-retirement standard of living. That's why most people supplement their Social Security checks with other sources of retirement income. Having a diverse portfolio of investments can help set you up for security and stability in retirement. Below are some of the most common income sources for retirees.

Pensions

Many companies offer pension plans to their employees. Through these plans, employers pay a monthly income to former employees after they retire. The value of pension income typically depends on the number of years the employee was with the company, their salary, and their age.

Pensions certainly make retirement planning easier because they're a source of guaranteed income for life. However, if you don't have a pension through your work, you're probably out of luck with this source of income.

IRAs

An individual retirement account (IRA) is a type of retirement savings account that has significant tax advantages. You can save money in your IRA, or use it to hold investments like stocks and mutual funds. These retirement accounts let your money grow tax-deferred. That means you don't pay tax on earnings from your investments. Instead, you'll pay tax when you make withdrawals later in life.

There are two main types of IRAs: traditional IRAs and Roth IRAs. They are similar but have some important differences in how they are funded and taxed.

Traditional IRAs are funded with pre-tax dollars directly from your salary. You pay taxes on your retirement income when you make withdrawals from the traditional IRA in retirement. Note that with a traditional IRA, there are rules about when you can start to make withdrawals. Early withdrawals may face tax penalties.

Traditional IRAs may also be tax-deductible. That means that your contributions are deducted from your income, so you pay less income tax. Whether or not contributions to a traditional IRA are tax-deductible depends on your income level, your tax filing status, and several other factors.

Roth IRAs are funded with money that you've already paid tax on. That money grows tax-free and qualified distributions are also tax-free (as long as you satisfy the requirements). Note that contributions to a Roth IRA are not tax-deductible. Also, you can't contribute to a Roth IRA if your income is very high. In 2022, the limit is $144,000 for single people and $214,000 for married couples.

While IRAs do not provide a retirement income by themselves, they provide a tax-advantaged way for you to grow your money. Then you can withdraw it in retirement to supplement your household income. See the IRS website for more details about IRAs.

401(k)s

401(k)s are another type of retirement account that companies establish for their employees. Employees contribute a portion of their salary directly into the account. If you're lucky, your employer may match those contributions.

Money in the 401(k) is invested in a portfolio of assets you choose. It earns investment income and grows tax-deferred. Then you can begin to withdraw from the account when you reach retirement. You'll be taxed on the withdrawals as ordinary income once you start to receive them.

While 401(k)s are usually only available through your employer, self-employed individuals can start a 401(k) for themselves. Find out more about choosing between an annuity or 401(k) .

Investments

Many retirees grow their savings by investing in the stock market. Common investment options include stocks, bonds, index funds, and mutual funds. If you buy these assets and their price increases, you can sell them at a profit.

Some of these assets can pay you an income. For example, some companies pay dividends to their shareholders. Note that these payments are not guaranteed—companies can stop them at any time. To learn more about the best investment strategy for you, consider consulting a financial advisor.

Part-Time Employment

Many retirees actually continue to be employed part-time. This not only helps provide a little income each month, but it can also be a rewarding social activity. Some jobs can even be fun—think pet-sitter, movie clerk, or even part-time gardener.

Annuities

Annuities are a bit like private pensions that you fund yourself. They work like this: first, you pay premiums to an insurance company. Then, depending on the type of annuity you choose, your money can grow tax-deferred. When you hit retirement, you can choose to annuitize and begin to receive regular distributions from your annuity.

Annuities are the only financial product that can guarantee you a retirement income. They provide retirees with financial security because they ensure that you'll always have some income coming in—regardless of how much you receive from other sources. Another main benefit of annuities is that they provide tax deferral so that your money grows faster.

Annuities are also great for married couples. Most annuities give you the option of adding death benefits. You name a beneficiary, and they will receive any leftover funds in your annuity account in the event of your death. You may even choose to buy a joint and survivor annuity, which ensures that both you and your spouse receive annuity payments while one of you is still living.

There are many different types of annuities that could be right for you depending on your financial goals. Check out the annuity products we offer here at Canvas Annuity for very low risk ways to grow your money and set yourself up to receive a regular retirement income.

Planning Ahead for Retirement

Retirement can be stressful if you're not prepared for it. And while it's important to save up a significant nest egg, your savings will only take you so far once you stop working. In addition to savings, it's important to think about how you can establish a solid retirement income for yourself once you stop working.

We've discussed a number of ways to do that in this article. But one of the only ways to guarantee yourself a retirement income beyond pensions or Social Security is to buy an annuity. Annuities are a gift to your personal finances because they offer you a sense of security. They help you feel confident knowing that you'll have some money coming in each month.

To add a low risk annuity to your retirement portfolio, apply today.