The nice thing about being a couple in retirement is that you and your partner can share expenses, like housing and utilities, thereby making that stage of life more affordable. You can also pool your income for more buying power.
But if you're counting on Social Security to provide you with all of your retirement income, you may want to rethink your plan. The average senior couple today probably gets less Social Security income than you'd expect. And if you end up in a position where those monthly benefits are the only income available to you and your spouse, it could make your retirement quite miserable.
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A number that's not notably high
As of January 2024, the average retired couple was collecting $3,033 from Social Security. That's roughly $36,400 a year. But that's not such a generous income when you consider that it needs to cover not only things like housing, transportation, and groceries, but also healthcare.
Consider this: The standard monthly premium for Medicare Part B in 2024 is $174.70. That's $349.40 per couple, per month, or almost $4,200 a year for a senior couple just to have Part B coverage. That doesn't even include the cost of Part D (drug plan) premiums, prescriptions, coinsurance, and other medical expenses.
And remember, healthcare is just one of many expenses you'll need to pay for as a retiree. So your plan should really not be to fall back on Social Security alone.
Try your best to build savings
If you're not yet retired, it's time for you and your spouse to sit down and come up with a savings strategy that leaves you with a decent sum of money outside of Social Security. One thing you may want to do is create a joint budget that prioritizes savings. Look at your expenses and decide where there's room to cut back. Consider making lifestyle changes to promote more savings, such as sharing a single car, if possible, instead of paying for two.
Another thing both you and your spouse should do is make sure you're taking advantage of any free money for retirement that may be available to you. If you each have access to a 401(k) plan through work, try to each contribute enough to claim your employer match in full.
Even if you're getting a late start to the savings party, if you really make an effort to carve out funds for a retirement plan, you might build up a nice nest egg in a relatively short period of time. If you're able to sock away $1,000 a month between the two of you over a 15-year period, and your portfolios generate a relatively conservative 6% return during that time, you'll end up with about $279,000 in savings.
Even though you might receive more income from Social Security as a retired couple than as a single retiree, those benefits may not be able to sustain you in the absence of savings. So work with your spouse to come up with a plan to build a nest egg so you can enjoy a retirement that isn't filled with financial worries.
