Could You Live Off the Average Couple's Social Security Benefit in Retirement?

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The average retired worker gets about $1,666 per month from Social Security, and married couples usually fare better because both spouses can claim benefits. Even so, Social Security probably won’t cover all of the average senior couple’s retirement expenses. Here’s what the numbers have to say.

How far will the average senior couple’s Social Security benefit go?

The typical senior couple consisting of a retired worker and a spouse, both of whom claim Social Security benefits, received about $2,739 per month as of April 2022. That amounts to an annual benefit of about $32,868 per year. Though that’s a sizable sum, it still falls short of the average senior couple’s expenses.

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The average household headed by an adult 65 or older spent about $47,579 in 2020, according to the Bureau of Labor Statistics. This is the most recent year for which data is available. It’s likely that average expenditures in 2022 will be higher given how inflation is driving up the cost of everything.

It’s also worth noting that this data on annual expenses doesn’t include younger adults eligible for Social Security — those aged 62 to 64. Some younger, more active beneficiaries who plan to travel or spend a lot of time on hobbies could also spend more than this average.

If we assume a typical senior couple spends around $50,000 per year, that means the average Social Security benefit will only cover about two-thirds of their expenses. They’ll need to cover the remaining one-third ($17,132) on their own. For a 20-year retirement, that amounts to over $342,500 in total. 

And it’s worth noting again these are all just averages. Some people might spend more or less in retirement or receive larger or smaller benefits. Rather than rely on these estimates, it’s better to create a custom retirement plan based on your needs.

How to prepare for what Social Security won’t cover

Your retirement expenses could look different from your expenses today. This makes them difficult to estimate, but doing so is key to determining how much you need to save. You can use your current expenses as a baseline, but think about how your spending in each category will change between now and retirement. For example, you might spend more on healthcare as you age but little to nothing on child care once you’re retired.

Once you have a rough estimate of your annual retirement expenses, multiply this by the number of years you expect your retirement to last, adding 3% annually for inflation. Or you can use a retirement calculator to do the math for you. That should give you the total amount you need to cover your retirement expenses. But you don’t have to save all this on your own.

You should also create a my Social Security account to estimate your Social Security benefit at various starting ages. Keep in mind that the longer you delay collecting Social Security, the larger your checks will become (until you hit your maximum benefit at age 70). But delaying doesn’t make sense if you have a short life expectancy. Choose the starting age you think makes the most sense for you and have your spouse do the same.

Next, multiply each person’s monthly benefit by 12 to get an estimated annual benefit. Then, multiply this by the number of years each of you expects to claim benefits to get your combined estimated lifetime benefit. For example, if one of you believes you’ll get $1,500 per month and claim for 20 years, your lifetime benefit would be $360,000. Subtract this from your total estimated retirement costs to figure out how much you need to save on your own.

If you expect money from other sources like a 401(k) match or a pension, subtract these income sources as well from your total estimated costs. Then, figure out how much you need to save per month to reach your goal. Keep in mind you’ll probably have investment earnings to help you. Plan for a 5% or 6% average annual return, even though your actual returns might be higher. By being conservative, you reduce your risk of falling short of your target.

When it’s not possible for you to save as much as you’d like, you might have to delay retirement to give yourself more time to save. Or you could consider ways to boost your Social Security income like delaying benefits until you qualify for larger checks. Play out a few different scenarios until you find the one that works best for you.