The nice thing about being a retired couple is that you and your partner can share expenses such as housing and utilities, making that stage of life more affordable. You can also bundle your income for more purchasing power.
But if you’re counting on Social Security to provide you with all of your retirement income, you may want to reconsider your plan. The average senior couple these days probably gets less Social Security income than you might expect. And if you find yourself in a position where these monthly benefits are the only income available to you and your spouse, it can make your retirement quite miserable.
A number that is not appreciably high
As of January 2024, the average retired couple received $3,033 from Social Security. That’s about $36,400 per year. But that’s not such a generous income when you consider that it has 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 per year for a senior couple just to have Part B coverage. That doesn’t even include the cost of Part D premiums (drug plans), prescriptions, coinsurance, and other medical expenses.
And remember: Healthcare is just one of many expenses you’ll have to pay as a retiree. So your plan really shouldn’t be to rely solely on social security.
Do your best to build up 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 will leave you with a decent amount 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 determine where you can cut back. Consider making lifestyle changes to promote greater savings, such as sharing one car, if possible, instead of paying for two.
Another thing that both you and your partner should do is make sure you take advantage of any free retirement money that may be available to you. If you all have access to a 401(k) plan through work, try to each contribute enough to fully claim your employer match.
Even if you start the savings party late, if you really make an effort to raise money for a retirement plan, you can build up a nice savings pot in a relatively short time. If you’re able to set aside $1,000 per 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 may receive more Social Security income as a retired couple than as a single retiree, these benefits may not support you if there are no savings. So work with your partner to come up with a plan to build a nest egg so you can enjoy a retirement that isn’t filled with financial worries.
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Here’s What the Average Senior Couple Collects in Social Security Today was originally published by The Motley Fool
