What Is the Average Retired Couple's Income?

by Jane Meggitt ; Updated June 29, 2018
What Is the Average Retired Couple's Income?

As our longevity increases, we will spend as many, or possibly more, years in retirement as we did working. It’s not unusual for people to live to age 90 these days, and some are even reaching the century mark. Whether retirement income can keep pace with longer life spans is a source of concern for many retirees. Key findings from a 2016 brief provided by Boston College’s Center for Retirement Research reports that retirement security remains a major challenge that requires today’s workers to save more and/or work longer. Roughly half of all retirees are at risk of falling short when it comes to retirement income.

The Numbers

According to data provided by NewRetirement.com, the median income for households age 65 to 74 was $47,432, as of 2016. However, not everyone in that demographic was retired or married. The median income of married retired couples in 2016 was $39,823, which means half of all such households received less than that amount, and half received more.

The numbers drop precipitously for households age 75 and up, to a median of $30,635. This number reflects a higher number of retired people, since relatively few individuals age 75 and up are working, and also represents fewer couples as death takes its toll.

Income Sources

Social Security remains a major source of retirement income for retirees. The age for full benefits eligibility has risen to 67, but many people are still opting for benefits much earlier and reducing the amount of money they will receive. For 2018, the average retired person receives $1,404, so a couple might receive $2,808 monthly in Social Security benefits. While many retired people benefit from their 401(k) income and similar employer-sponsored retirement plans, or IRAs, the average baby boomer has just $164,000 in retirement assets. For a couple, that equals retirement assets of $328,000, which at a 4 percent rate of return produces an income of $12,600 annually. AARP states that a retired couple needs a nest egg of about $1.18 million to generate $40,000 annually in income for a 30-year retirement.

Roughly one-third of current retirees receive pensions, so this income doesn’t apply to the majority of retirees. Pension numbers vary widely, with the median private pension bringing in less than $10,000 per year and federal pensions averaging $22,172.

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Back to Work

More and more people are working again after retiring from their primary careers, and this trend is expected to continue. While some work because they enjoy it, others take on part-time or occasional gigs because they need the money to meet their living expenses. Nearly one-third of people age 65 to 74 are expected to be in the labor force by the early 2020s, while the number of those in the workplace past the age of 75 is expected to grow to 11 percent.

About the Author

A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.

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