Can a Retired Couple Live on $100k a Year?

Shawn Plummer

CEO, The Annuity Expert

Understanding Living Costs

To determine if a retired couple can live on $100,000 a year, it’s crucial to consider various factors:

  1. Location: Living in cities like New York City or Los Angeles with a high cost of living can be challenging on this budget. Housing, utilities, groceries, and transportation costs are significantly higher in these areas.
  2. Lifestyle Choices: The kind of lifestyle the couple leads also plays a role. Frequent dining out, entertainment, and travel can quickly deplete the budget.
  3. Healthcare Expenses: As retirees age, healthcare costs can increase. This includes insurance premiums, out-of-pocket expenses, and long-term care costs.
  4. Debt and Obligations: Existing debts, loans, or financial obligations can impact the feasibility of living on $100,000 a year.

Financial Strategies

Using an annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB) can be beneficial:

  1. Steady Income: GLWB ensures a steady flow of income throughout retirement, which is crucial for budget planning.
  2. Inflation Protection: Opting for an increasing income option with the annuity can help keep pace with inflation, maintaining the purchasing power of retirees.

Example Scenario

Consider a couple living in a mid-sized city with moderate living expenses. They have no major debts and lead a relatively modest lifestyle. Here’s a possible budget breakdown:

  • Housing (rent/mortgage, utilities): $30,000/year
  • Groceries and Dining: $12,000/year
  • Transportation (car maintenance, insurance): $8,000/year
  • Healthcare (insurance, medications): $15,000/year
  • Leisure (travel, hobbies): $10,000/year
  • Miscellaneous (clothing, gifts): $5,000/year
  • Savings/Emergency Fund: $20,000/year

Total: $100,000/year

Conclusion

In most cases, a retired couple can live comfortably on $100,000 a year, especially with careful budgeting and in areas with a lower cost of living. An annuity with GLWB can provide financial stability and keep up with inflation. However, this depends greatly on their lifestyle, location, and financial obligations.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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