A Couple's $1.2 Million Portfolio Faces a 3.9% Withdrawal Rate Reality

"Morningstar's 2026 research suggests a 3.9% withdrawal rate for new retirees. Applied to $1.2 million, this generates approximately $46,800 annually, or $3,900 monthly from the portfolio alone. Social Security adds substantial income for dual-earner couples. The Social Security Administration reports the average aged couple receives approximately $3,208 monthly in 2026, or roughly $38,500 annually after the 2.8% cost-of-living adjustment. Combined with portfolio withdrawals, this creates total annual income around $85,300, or about $7,100 monthly before taxes."

"For couples with uneven earnings histories, spousal benefits become crucial. The lower-earning spouse can claim up to 50% of the higher earner's full retirement age benefit, even if their own work record would produce a smaller payment. This coordination can meaningfully boost household income."

"The claiming sequence matters enormously. If one spouse earned significantly more, delaying their benefit until age 70 while the lower earner claims earlier can maximize lifetime payouts. Each year of delay past full retirement age increases benefits by 8%, a guaranteed return that's hard to match elsewhere. Portfolio allocation should shift toward stability as withdrawals begin. A balanced approach might include 60% stocks for growth and 40% bonds for income and volatility dampening. The Vanguard Total Bond Market ETF currently yields 4.13%."

A $1.2 million portfolio combined with dual Social Security benefits can generate roughly $85,300 annually before taxes using a 3.9% withdrawal rate and average couple benefits. Morningstar's suggested 3.9% withdrawal produces about $46,800 from savings. The Social Security Administration's 2026 average for aged couples is about $3,208 monthly, or $38,500 annually after a 2.8% COLA. Spousal benefits can provide up to 50% of the higher earner's full retirement age benefit and can materially increase household income. Delaying the higher earner's benefit to age 70 increases payments roughly 8% per year. A 60/40 stock-bond split and bond yields near 4.13% support income and reduce volatility.

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