The average amount saved for retirement is a popular topic. But a new analysis using data from the Survey of Consumer Finances (SCF) reports what it takes to be in the top 1%, 5%, 10% and 50% of the wealthiest retirees. . Scroll down to see how we compare.
Before we look at what it takes to become the wealthiest retiree, let’s first understand the definition of wealth.
There are many different measures of wealth, but the most common are income, savings, and net worth. Of these three, net worth is considered the most accurate or all-encompassing measure. It is defined as the total amount of all assets minus the total amount of all liabilities.
Other important factors to consider include age, how “retirement” is defined, and whether household or personal assets are being measured.
How is “retirement assets” defined? When we talk about wealth in this article, we are referring to the following: The household (not individual) net worth of people aged 65 and over (whether they are working or not).
It takes millions of dollars to become one of the wealthiest retirees. However, it may be less than you think.
To be in the top 1% of retirement assets, you need a net worth of $16.7 million
The average annual income for the top 5% is $3.2 million.
The richest 10% have $1.9 million
From there, your retirement assets will decline significantly.
The average net worth of the top 50% is $281,000
And the poorest 20% have an average net worth of $10,000
You might think that the wealthiest retirees are trust fund heirs or powerful senior executives. But the reality is that most wealthy retirees are ordinary people with regular jobs. They simply saved diligently and invested wisely over the long term.
The top five professions for the billionaires are engineers, accountants, teachers, managers and lawyers.
They are university educated, but most have graduated from public universities and state schools.
Only 20% of billionaires received an inheritance
Only 15% of billionaires held a senior executive position during their career
70% earn less than $100,000 per year while working
How do billionaires increase their net worth?
Here are five key takeaways.
The millionaires saved as much as they could through their company’s retirement 401k and other plans.
They also saved and invested beyond the company’s plans.
The Wealthiest Retirees Invested Broadly and Didn’t Focus on a Single Stock
They started saving and investing early in their careers (but it’s important to note that it’s never too late; see 28 ways to grow your wealth even after 50) .
consistency was the key
The average net worth of NewRetirement subscribers is just over $3 million.
It’s no surprise that the top 5% use the most powerful retirement planning tools available online. Saving and investing aren’t the only things that increase your net worth. Building and maintaining a financial plan that allows you to make better financial decisions regarding all aspects of your financial health is also a key component.
Actually, it doesn’t matter if you are a millionaire now. It doesn’t even matter if you are moving towards that goal. Anyone can enjoy their retirement with peace of mind just by making a plan.
Use NewRetirement Planner to create or update your plan for the secure future you want. Does that mean living on Social Security alone, working beyond age 65, or retiring in your 40s?
We can help you plan for the secure retirement you desire.
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