Motley Fool: Couples Need At Least $650,000 to Retire

Motley Fool: Couples Need At Least $650,000 to Retire

Couples need between $650,000 and $860,000 in savings to remain financially independent in retirement, according to a new article from Motley Fool reporter Ryan Downey.

Downey says the median retired couple has annual income of $57,000, $31,000 of which comes from Social Security. Investment income must cover the $26,000 gap. “To stay within 4 percent rule guidelines, that necessitates between $650,000 and $860,000 in retirement savings (and that’s just to maintain a median income, assuming no taxation). That number will also be higher for people retiring in the future, due to inflation,” he adds.

Downey further recommended that couples:

  • Accumulate at least $300,000 in assets to cover healthcare costs in retirement;
  • Retain some exposure to stocks so that the value of their investment portfolio keeps pace with inflation;
  • Recognize that proceeds from IRAs and 401(k)s will be taxed. Tax rates vary by state and change over time, but it’s common for retirees to have effective income tax rates of 10 to 15 percent; and
  • Plan for more than 20 years of retirement.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.