Anonymous
Anonymous asked in Business & FinancePersonal Finance · 1 month ago

The median net worth for Americans when they retire in their sixties is $223,000. Why do some people say you need more?

It's a fact that most Americans have less than $250K when they retire in their sixties.

My dad is retired in his late sixties and he has more than that. His net worth is about $270,000. He lives a good life and he survives well.

I am in my late forties and I am struggling with debts. My net worth is positive but it doesn't exceed 30K and I get tired when people say things like you can't retire unless you have a net worth of half a million bucks!

I will frankly never have that amount of money by the time I retire. But I am sure that I will be able to live normally when I retire. I won't have a luxurious life,I get that part, but I will be able to have what I need to survive just like most other American retirees.

So could people just put things in perspective. You only need half a million or more to live a very comfortable life.

Most American retirees have less than $250K and they are surviving well,living and having fun in their own way.

https://flowingdata.com/2019/10/29/when-people-rea...

Update:

I get that there are retirees living living in poverty and have a hard life. But those with around $223,000(which is most Americans at retirement age) live a normal life. 

8 Answers

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  • 1 month ago

    I don't want to survive, I've busted my butt and saved & scrimped... I got PLANS for my retirement years.  I worked 4 jobs for 4 years to knock out my debts so I could be FREE to do what I want.  $250,000 per financial advisors allows you to draw about 7,500 from a diversified portfolio and not really worry about depleting it.  That sounds pretty threadbare living to me. I nearly went bankrupt 14 years ago, I've busted my butt for a few years to get ahead of my debt and start investing. I make below the national average yet I am already well about of the net worth number you quote with plenty of years to go yet before retirement.  It takes planning and a few years of sweat equity and anyone can be successful. You've got 25 to 30 years yet to get ahead of your debts and let your $30,000 compound (and you add to it). 

    Start by making a plan, setting goals and spread sheeting your finances that you update monthly to track your progress.  It works, it gets you focused on the big picture and pass up on spending on noise. 

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  • 1 month ago

    inflation makes that number meaningless. give up on this illusion of retirement and live your best life now (with balance).

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  • A.J.
    Lv 7
    1 month ago

    Non-cash assets, cash and cash equivalent, income from pensions and/or Social security, dependents or just one person, place to live, medical coverage.

    That's some things to consider.

    I quit working 10 years ago in my early 50's.

    Two pensions, cash accounts, retirement accounts, medical reimbursement accounts, social security and medicare eligible eventually, some inheritance at a future date.

    I'm fine.

    This is a mortgage amortization

    http://bretwhissel.net/amortization/amortize.html

    225000 @ 5% earnings a year spread out over 30 years is $1207.85 per month using up all the money.

    5% is a midlevel risk investment set.

    But, prices of goods and services go up over time.

    https://data.bls.gov/cgi-bin/cpicalc.pl

    In 20 years, using past as guidance, things cost 50% more.

    Now, $12,490 a year is now Federal Poverty Level for one person.

    That's $1041/month

    The $1208 is 16% above Federal Poverty guidelines.

    If a person ONLY has $225,000 and NO OTHER income or assets, that person is heading for financial disaster.

    So, circle back. What else do you have other than the $225K?

    One guidance says $1 Million with no pension or other assets can make it work in many places.

    Must add that although neither political party has acted responsibly, the current administration is a disaster. The ignorant Republican lower and middle class should wake up to what the people in power are doing. The Trump proposal includes cuts to Social Security and Medicare funding in order to build his useless vanity wall. 

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  • Amy
    Lv 7
    1 month ago

    $223,000 is pretty damn close to the median house value in the US. Retiring with that net worth means that you have a house and nothing else, or you have money for food but no place to live.

    So let's assume you are talking about your father's retirement accounts IN ADDITION to a house, roughly doubling his net worth. From a starting value of $270,000, he can withdraw $900 per month - any higher and he would risk running out of money in the future. Maybe he gets another $1000 from social security. That's enough to live comfortably on while he's healthy.

    But let's consider what happens 15 years from now. The house is falling apart and costs more and more to repair. Social Security is bankrupt. Inflation has doubled the cost of everything. And his health is declining - nothing serious yet, but a lot of prescriptions and doctors' visits that he has to pay for.

    Why do some people say you need more to retire? Because that median retiree quickly runs out of money and becomes a financial burden on their family.

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  • Anonymous
    1 month ago

    Yes, but why would you want an average lifestyle, when you could have a better lifestyle?

    I concur that most people in the US have less than the 300 thousand mark in assets or 250 thousand as you worded it. But who wants to just live a normal life? 

    I personally want to have nice cars, fly overseas several times a year and have a high quality life when I retire. Never mind half a million Dollars, I am looking to have a total wealth of 1 million Dollars when I retire. I want to really enjoy life and still have great experiences at that age.

    But if you're happy with just a basic life, that's up to you. $223,000 is what most people in the US retire on, but are they having a lot of fun travelling overseas? Do they have nice cars that they drive? Do they have fine dining at fancy restaurants?

    The answer is probably not! But hey, if you are happy with that basic lifestyle, then good for you, be like the average US citizen, but just remember some of us want to retire when we are much more comfortable than the average person on the street.

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  • Anonymous
    1 month ago

    This may be true for some.  But it's certainly not true for everyone.  My mother-in-law is retired and has around $200K in retirement funds, plus social security.  Between the two of them, her income is around $18K per year, which is above the federal poverty level but not much more than that.  She owns her house and is able to pay her bills.  She has very little for anything past that.  When her mower died, we had to loan her money to replace it (she lives in a rural area and has around an acre of land).  When her car dies or has serious problems, she will have to borrow from us again.  She can't absorb more than around $300 in unplanned expenses.  Right now her health is good, but she has friends who, even with Medicare, pay over $1K per month for medicine and other medical bills.  She's a free caretaker for a friend who had a stroke and cannot care for himself, but can't afford anyone to help.  He was healthy - 74 years old and ran marathons.  Now he's dependent upon friends to cook and care for him.  Your dad is in his sixties.  That's young.  Medical bills pile up with age.  Many older people have to move to new homes if they're unable to walk up and down stairs.  Nursing homes can cost more than $5K per month.  Your dad may be lucky.  But there's a good chance he'll be hit with medical bills over the next decade or two that will bankrupt him.

    This is, of course, assuming you and he are American.  If you live in a first world country like Canada then obviously he'll be fine.

    Edit - yes, we loaned her money.  She refused to accept any cash.  She insisted upon paying us back.  It was a John Deere mower/tractor that cost close to $5K.  It took her 5 years, but she did repay us at her insistence.

    • STEVEN F
      Lv 7
      1 month agoReport

      You LOANED your mother money to replace a lawnmower? You should have just BOUGHT a lawnmower.

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  • 1 month ago

    Telling us your networth doesn't tell us the full picture.

    If all you have is $30K, I am positive you will not "live normally" when you retire (or for that matter if you are ever able to retire).

    Does your father receive social security or a pension?  Will you?

    Does it cover his "costs" and his retirement savings is extra?

    Will it cover your "costs"?

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  • Anonymous
    1 month ago

    So keep spending. Is that what you want to hear?

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