How Much Monthly Income Will I Need in Retirement?

“How much monthly income will I need in retirement?”

That’s a loaded question.

Everyone is different.

The real answer starts with one concept: your income floor.

Your income floor is what you need to calculate. It’s what you need to understand. It’s what you need to build.

That’s the starting point.

Add Up What’s Already Hitting Your Bank Account

Start with Social Security.

That’s an annuity you already own. The best inflation annuity on the planet. It pays as long as you’re breathing.

Look at your Required Minimum Distributions from your IRA. That’s annuity-type income.

If you have a pension, that’s annuity income.

Side hustle income. Dividends. Interest. Whatever is hitting your bank account monthly.

That’s your income.

Now the question becomes:

Is it enough?

Only you can answer that.

If It’s Enough, You Don’t Need an Annuity

If you’re living comfortably, traveling, buying what you want, and the income floor covers your lifestyle, then you don’t need an annuity.

It’s really that simple.

Yes, I’m America’s annuity agent.

But if you don’t need one, you don’t need one.

If There’s a Gap, That’s the Real Issue

If the income you’re receiving is not enough to live the way you want, then you may need additional lifetime income.

That’s where annuities come into play.

The first question is:

When do you want the lifetime income to start?

The second question is:

Is it single life or joint life?

Single Life vs Joint Life Matters

If it’s single life, payments are higher.

If it’s joint life, payments continue unchanged for the surviving spouse.

If the spouse is only listed as beneficiary, they do not receive continued lifetime payments. They receive what’s left over.

That’s an important distinction.

If you want lifetime income covering both lives, it must be structured as joint life.

The Money Does Not “Go Poof”

Annuities can be structured so that 100 percent of unused money goes to beneficiaries.

Life with cash refund.
Life with installment refund.
Life with period certain.

Most people choose options that ensure money goes to family.

The annuity company does not automatically keep the money.

What Determines the Payment Amount?

Lifetime income is priced primarily on life expectancy at the time income begins.

The older you are, the higher the payment.

The younger you are, the lower the payment.

Interest rates play a secondary role.

Life expectancy is the primary pricing driver.

Shop All Carriers

Annuities are commodity products.

You shop all carriers for the highest contractual guarantee.

A-plus rated or better.

Companies adjust pricing based on age tranches they want to fill.

Sometimes they raise guarantees. Sometimes they lower them.

Quotes expire like milk. Seven to ten days unless locked.

That’s how it works.

The Bottom Line

How much monthly income do you need in retirement?

Calculate your income floor.

Add up everything hitting your bank account.

If it’s enough, you’re done.

If there’s a gap, fill it with contractual guarantees structured properly for your life or joint life.

That’s how you answer the question.