How Much Money Couples Need to Retire With Annuity Income by State

How much money couples need to retire comfortably depends heavily on where they live and how much income they can count on. A model based on 2024 federal data puts the typical retired couple’s savings target at about $1.16 million after Social Security, but annuity income can lower the amount that must remain invested.

What the retirement estimate includes

The estimate starts with a typical couple age 65 or older spending about $84,000 a year. That budget includes discretionary costs such as travel, restaurant meals and entertainment, not only housing, food and other essentials. The number is an average, not a spending plan for every household.

Combined Social Security benefits are estimated at about $37,700 a year. They cover roughly 45% of the modeled annual spending, leaving a gap of about $46,000. Using the 4% withdrawal rule to fund that gap produces a savings target of about $1.16 million.

The 4% rule is a planning guideline: it begins with withdrawals equal to 4% of an investment portfolio, then adjusts withdrawals over time for inflation. In this calculation, the rule converts an annual income gap into a portfolio estimate. It does not promise that a particular balance will last for a particular household, and it does not account for every possible change in spending, investment results or lifespan.

Location changes the starting point. Modeled annual spending for couples ranges from roughly $70,000 in the least expensive states to more than $90,000 in the costliest. Before any annuity income is included, the estimated nest egg ranges from about $800,000 in North Dakota to nearly $1.33 million in New Jersey. The difference is almost $530,000.

These figures are estimates for a two person household, not personal forecasts. A couple with a paid off home, substantial medical costs, a pension, different Social Security benefits or a more expensive lifestyle could have a very different gap to fund. The useful starting point is to compare the modeled assumptions with actual household expenses and reliable income.

How much money couples could need with annuity income

Each $500 of monthly annuity income supplies $6,000 a year. Under the 4% rule, that income replaces the amount a $150,000 portfolio would need to provide each year. As a result, the model reduces the remaining invested balance by $150,000 for every $500 in monthly payments.

The table shows the modeled balance that would still need to be invested after the annuity is in place. It assumes about $37,700 in annual Social Security benefits. The figures do not include the money spent to purchase the annuity, so they should not be read as the total amount a couple needs to save before retirement.

This is a comparison of income levels, not a schedule of annuity prices or a set of available products. For example, the model says a couple receiving $1,000 a month from an annuity would need about $858,650 invested to cover the modeled spending gap. It does not say how much that couple would have to pay to secure the payment.

That distinction matters. Imagine a couple has $800,000 and spends $200,000 to purchase an annuity. The couple then has $600,000 invested, plus the annuity income. The $600,000 is the remaining portfolio in this example. The purchase cost is still part of the couple’s resources used for retirement, even though it is excluded from the table’s remaining nest egg figure.

Annuity pricing varies with factors including the buyer’s age, interest rates, how long payments last, survivor coverage, inflation protection, guarantees and other contract terms. The source figures do not provide a purchase price for any of the monthly income amounts. A couple should not assume that a particular payment can be bought for the same amount as the reduction in the required portfolio.

State costs still shape the savings target

In every state, the model subtracts the same amount from the required invested balance for a given annuity payment. A $500 monthly payment cuts the modeled balance by $150,000; $1,000 lowers it by $300,000; and $2,500 lowers it by $750,000. Those reductions follow from the same 4% calculation, not from local annuity prices.

Because states begin at different spending levels, the remaining balances are not equal. With $1,000 a month in annuity income, the estimate is about $1.03 million invested in New Jersey and Hawaii. It is about $500,000 in North Dakota and $507,000 in Arkansas.

At $2,500 a month, the modeled amount still needed ranges from about $50,000 in North Dakota to nearly $579,000 in New Jersey. Arkansas, Mississippi and West Virginia are also below $75,000. California, Hawaii and Washington, D.C., remain above $550,000.

These are results from a simplified model, not a claim that a couple in a low cost state can safely retire with only the amount shown. The figures depend on the assumed spending level, Social Security income, annuity payment and withdrawal guideline. They also exclude the lump sum paid for the annuity. A household’s actual costs and income sources may not match the state estimate.

For perspective, the national estimate of $1.16 million is an average across a wide range of local costs. Someone planning a move in retirement should look at the likely costs in the destination, rather than treating the national figure as a universal target. The model’s state comparisons demonstrate how much housing and other regional price differences can affect the calculation.

What to compare before considering an annuity

An annuity can provide a defined stream of income, which may cover part of a spending gap that would otherwise come from savings. In return, the purchaser commits part of the retirement assets to a contract. The central practical question is not only how much income the contract promises, but how the purchase affects the money left for expenses the payments do not cover.

Different annuities can have different payment start dates, payout periods, survivor provisions, guarantees, fees, restrictions and optional riders. The calculation here assumes a fixed monthly income for illustrating the effect on a portfolio. It does not compare named contracts or establish that all annuities pay the same way.

Before comparing quotes, a couple can assemble a household picture that includes:

• Expected annual spending, separated where possible into essential and discretionary costs.
• Each spouse’s expected Social Security income and any other dependable retirement income.
• The amount of savings that would remain after a possible annuity purchase.
• Expenses that need to be covered from the remaining savings, including costs that could change over time.
• The contract terms that affect payment amounts, access to funds and income for a surviving spouse.

Then compare the proposed monthly payment with the actual gap between household expenses and other income. The table provides a useful scale for understanding the arithmetic: each additional $500 per month corresponds to $150,000 less in the model’s invested balance. It does not establish whether that trade is suitable for a particular couple, because the purchase price and contract terms are not included.

Ask for the payment amount and the complete contract terms in writing. Clarify when payments begin, whether they continue for a spouse after the purchaser dies, what guarantees apply, what fees or restrictions apply, and how inflation protection or other options affect the offer. The source analysis does not state universal fees or eligibility rules, so those details must be checked against the specific contract and the buyer’s circumstances.

Also compare the remaining savings with the expenses the annuity will not meet. A steady payment can reduce pressure on investments, but a large purchase can also leave less accessible money. The analysis specifically warns that retirees need enough left after buying an annuity to handle costs the contract does not cover. A qualified financial professional can help assess the contract and its effect on a broader retirement plan.

How the estimates were built

The state estimates use 2024 federal data on housing, consumer spending and regional price differences. The calculation first estimated costs for a single retiree in each state, then adjusted those costs for a two person household. A comfortable retirement was defined using average spending that includes discretionary expenses.

From each state’s estimated annual cost, the model subtracts about $37,700 in combined Social Security benefits and any annuity income being tested. It then divides the remaining annual gap by 4% to estimate the invested balance. The lump sum used to buy an annuity is left out.

The result is best understood as a consistent comparison across income scenarios and states. It shows how a specified monthly payment changes the amount a model says must remain invested. It does not forecast investment returns, calculate a personal annuity quote or account for every household’s income and expenses.

Frequently Asked Questions

Why do most couples argue?

Couples can disagree about money, household responsibilities, family decisions or communication. The reasons vary between relationships; the retirement estimates here do not measure why couples argue.

How much is couples therapy?

The cost depends on the provider, location, session length and insurance coverage. The retirement analysis provides no therapy prices.

Why do i love money so much?

People can value money for security, freedom, comfort or the choices it makes possible. The reasons are personal and are not addressed by the retirement data in this article.

How much is couples counseling?

Prices vary by location, counselor and whether insurance covers any of the cost. No counseling fees are included in the financial figures above.

How much is couples therapy uk?

Costs vary across the UK according to the therapist, location and type of service. The source figures concern United States retirement spending and do not provide UK therapy prices.