How Much Monthly Retirement Income Will You Need in League City?

Start with what you spend each month

Forget percentages for a minute. Pull your last three months of bank and card statements and write down what actually leaves your account. Split it into two piles: bills you must pay no matter what, and spending you could cut if you had to.

The first pile is your floor. That is the money you can never be short on. The second pile is where you have room to adjust when times are lean.

• Mortgage or rent, property taxes and utilities
• Groceries, gas and car costs
• Health insurance premiums, prescriptions and copays
• Insurance premiums you plan to keep
• Travel, eating out, gifts and hobbies (the adjustable pile)

What counts toward your monthly income?

Once you know your spending, add up what will come in. For most people the base is Social Security. Some also have a pension from a past employer, which is common for folks who worked in energy, government or education.

Next comes money you draw from savings: a 401(k), an IRA or a brokerage account. Some people also have part-time work for the first few years, or income from a rental. The gap between what comes in and what goes out is the number we plan around.

• Social Security for you and your spouse
• Pensions, including any survivor option you chose
• Regular withdrawals from retirement accounts
• Annuity payments, if you have them
• Part-time or rental income

Costs people forget to plan for

Health care is the big one. If you stop working before 65, you will need coverage until Medicare starts. After 65 you still pay Medicare premiums, supplement or Advantage plan costs, and out-of-pocket bills that tend to climb with age.

Texas has no state income tax, which helps. Property taxes are another story. Check whether you qualify for the over-65 exemption and school tax ceiling, since that can change your monthly budget. Along the Gulf Coast, windstorm and flood coverage premiums also deserve a line of their own.

Then there are the slow costs: replacing a car, a new roof or AC unit, helping grown kids or grandkids, and prices going up a little every year. A budget that works at 65 can feel tight at 80 if you skip inflation.

Why the must-pay bills should be covered by steady income

Here is how we think about safety. Your floor, the bills you must pay, should be covered by income that shows up every month no matter what the market does. Social Security, a pension or an annuity can do that. Market money is better used for the extras, so a bad year means a smaller trip, not a missed payment.

Also plan for the day one spouse passes. When that happens, one Social Security check stops, and a pension may shrink or end. Many bills stay the same. Life insurance, such as whole life or a final expense policy, can help the surviving spouse keep the lights on and cover funeral costs without draining savings.

How we help you find your number

We sit down with you at our office in League City, or meet by phone or video if that is easier. Folks come to us from Friendswood, Dickinson, Webster and nearby towns. Bring your statements, your Social Security estimate and any pension paperwork.

We go through it line by line, write down your floor and your gap, and show you options to cover it. We explain each one in plain words. If what you already have is enough, we will tell you that.