Deciding when to retire is one of the biggest financial choices couples face. The age you choose—whether 62, 67, or somewhere in between—can have a major impact on how much monthly income you’ll need to maintain your lifestyle comfortably. In this article, we’ll break down what a good monthly retirement income looks like for couples retiring at 62 versus those retiring at 67, and why timing matters more than you might think.
Why Does Retirement Age Affect Monthly Income Needs?
When couples retire earlier, like at 62, they typically need their savings to stretch over a longer period, which means you may need a larger cushion or a more conservative spending plan. On the other hand, retiring at 67 means your retirement funds have had more time to grow, and you’ll generally receive higher Social Security benefits.
Key reasons retirement age affects income needs:
- Longer retirement horizon at 62: More years to cover means money needs to last longer.
- Social Security impact: Benefits increase the longer you delay up to age 70.
- Healthcare costs: Medicare eligibility starts at 65, so retiring before then means additional healthcare expenses.
- Potential income from work: Retiring at 62 might mean working part-time longer or relying more on savings early on.
What Is a Good Monthly Retirement Income for a Couple Retiring at 62?
For couples retiring at 62, a good monthly income needs to balance covering living expenses while preserving savings over possibly 30+ years of retirement.
Typical expenses to consider:
- Housing (mortgage/rent, utilities, maintenance)
- Food and groceries
- Healthcare (including private insurance before Medicare eligibility)
- Transportation
- Entertainment, travel, and hobbies
- Taxes (income, property, sales)
- Unexpected expenses (home repairs, medical emergencies)
Rough estimate of monthly income needs at 62:
Most experts suggest aiming for 70% to 85% of your pre-retirement income to maintain a similar lifestyle, but this can vary widely depending on spending habits and location.
Example:
If your combined pre-retirement income was $80,000/year, then:
- 70% = $56,000/year or about $4,670/month
- 85% = $68,000/year or about $5,670/month
Since Social Security benefits at 62 are reduced compared to waiting, you might expect to rely more on savings in the early years.
What Is a Good Monthly Retirement Income for a Couple Retiring at 67?
Couples retiring at 67 can typically expect to need slightly less monthly income from savings because:
- Social Security benefits will be higher, replacing a larger portion of income.
- Savings have had more years to grow.
- Medicare coverage starts, reducing healthcare expenses compared to early retirees.
Estimated monthly income needs at 67:
Using the same $80,000 pre-retirement income, experts often suggest needing around 60% to 80% of pre-retirement income due to Social Security and Medicare support.
Example:
- 60% = $48,000/year or $4,000/month
- 80% = $64,000/year or $5,330/month
This means the couple may withdraw less from their savings or have a lower total withdrawal rate, which can help preserve the nest egg longer.
How Does Social Security Affect Monthly Retirement Income?
One of the biggest factors in your retirement income is Social Security, and the age you claim benefits plays a huge role.
Social Security basics:
- Full retirement age (FRA) is typically 66-67 depending on birth year.
- Claiming at 62 results in permanently reduced benefits (about 25-30% less).
- Delaying benefits until 70 increases payments by about 8% per year after FRA.
What this means for couples:
- Retiring at 62 means a lower guaranteed income from Social Security but more years of benefit payments.
- Retiring at 67 means higher monthly payments but fewer total years of collection.
Since Social Security forms the foundation of many retirees’ income, understanding how it works with your retirement age is crucial.
How to Calculate Your Needed Monthly Income
When planning retirement, one of the key questions couples ask is, “how long will my retirement savings last?” Estimating your monthly income needs and withdrawal rates helps answer this by giving you a clearer picture of how much you need to withdraw each month to make your savings last for the duration of your retirement.
Use these steps to estimate what you’ll need monthly, whether retiring at 62 or 67:
- Estimate your annual expenses: Consider essentials, lifestyle, and unexpected costs.
- Subtract guaranteed income: Include Social Security, pensions, or rental income.
- Calculate savings withdrawal: The remaining amount is what you’ll need from your retirement savings.
Example Calculation:
- Annual expenses: $60,000
- Social Security benefits at 62: $20,000/year
- Social Security benefits at 67: $30,000/year
At 62: $60,000 – $20,000 = $40,000 needed from savings → ~$3,330/month
At 67: $60,000 – $30,000 = $30,000 needed from savings → ~$2,500/month
What Are the Healthcare Cost Differences Between Retiring at 62 vs. 67?
Healthcare is often one of the biggest unknown expenses in retirement, especially if retiring before Medicare eligibility.
Retiring at 62:
- You’ll need private health insurance, which can be expensive.
- Out-of-pocket costs may be higher.
- Consider budgeting an additional $500–$1,000 per month on healthcare until Medicare kicks in.
Retiring at 67:
- Medicare eligibility reduces healthcare premiums and out-of-pocket costs.
- Supplemental Medicare plans (Medigap or Medicare Advantage) may still add costs but generally less than private insurance.
What Are Some Strategies to Boost Your Monthly Retirement Income?
Regardless of whether you retire at 62 or 67, there are ways to improve your monthly income outlook:
- Delay claiming Social Security: Even a few extra years can boost monthly benefits significantly.
- Consider part-time work: This can help bridge the income gap, especially if retiring early.
- Downsize your home: Reduces expenses and may free up cash from home equity.
- Optimize investments: Keep a balanced portfolio to generate income and protect against inflation.
- Control spending: Regularly review your budget and cut unnecessary costs.
- Get expert help: Consulting a fiduciary financial advisor can provide personalized guidance tailored to your unique financial goals and help you develop a sustainable retirement income strategy.
Should You Retire at 62 or 67? What’s the Best Choice?
The answer depends on your financial situation, health, and lifestyle goals.
Retiring at 62 might be right if:
- You’re ready to leave work and have sufficient savings.
- You can manage higher healthcare costs before Medicare.
- You want to enjoy more years of retirement, even with reduced Social Security.
Retiring at 67 might be better if:
- You want higher Social Security benefits.
- You prefer to wait for Medicare coverage.
- You want your savings to last longer with lower withdrawal rates.
Closing Thoughts: Planning Your Monthly Retirement Income
Understanding what is a good monthly retirement income for a couple retiring at 62 vs. 67 is essential to making informed retirement decisions. The difference in timing impacts:
- How long your savings need to last
- Your guaranteed income from Social Security
- Healthcare costs and coverage
- Your overall quality of life in retirement
Start by estimating your monthly expenses, knowing your income sources, and planning for healthcare. Remember, it’s never too early (or too late) to adjust your retirement strategy.
