When is a Retiree Considered "Wealthy" ??? | FRB Data

Firmly middle class here but fairly content. My wife and I are retiring in 2024. Like many people our house funded most of our retirement. Sold the highly appreciated home and used the equity to buy a much less expensive place. So - no mortgage, no debt, a net worth of about $500K. Retirement income is nowhere near what our income was in our earning years, but our expenses are much lower too without the debt load. So I think we'll be ok.

Not a georgraphy video but it sounds like you are talking about LaJolla, CA at the beginning of the video. If so, it is pronounced La HOY-a and is near San Diego not SF.

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.

How should income like pensions and social security be factored into my net worth? My net worth is about $3.5M and my income from pensions and Social Security is around $160K/yr. I have no debt and own my home (no mortgage) and cars. I was in the military for 22 years, a government worker 20 years, and my wife was a public school teacher for 18 years…all have pensions and medical benefits.

Ok so the bottom are broke and the top are FU wealthy. Interesting, but only for conversation. I'll just extrapolate my situation and call it good at around 70%.

Ask a person the time, they tell you how to build a watch

Well, the deal is here also how many dependents (even grown children) are on the dole, depending on you? I would like a video on that. It doesn't matter if you're making 200K or have 2 million in retirement if you've got hands out on your accounts/ net worth. For example, I have a friend who makes about 120K/year, yet is deeply in debt because she has three adult children still under her roof, and she likes to go on a lot of vacations. Second mortgage on her house. There are so many ways that people perceive and spend money.

Interesting but your using 2019 data it’s 2023 isn’t there more current data out there.

If you have a net worth of over a million, I’d say you’re VERY well off and approaching wealthy. Especially if most of it isn’t your home. Most people in a million or two million dollar home in California aren’t going to sell it and move to Arkansas, so the value of their home is meaningless to their spending ability.

I’m happy with well off and retired 5 years ago at 53.

Would be interesting to know more about between 50th and 90 percentiles

Keep your overhead and expectations reasonable.

What happened to the 75th percentile?

#1 eliminating debt move expenses from fixed to variable avoid buying toys move to a less expensive state

Do I count the value of my pension in my net worth calculation?

Planning retirement has never been this confusing! First SVB, then Signature bank and now First republic, these are all the signs of yet another 2008 market crash and recession 2.0, so my question is do I still save in the United States dollar, or could this be a good time to buy stocks? So I’m left wondering what 2023 has in store for us investors, I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here,

How about pensions? Are they included by calculating their net present value? I have two government pensions that will make up a significant proportion of my retirement income. This can be estimated by an annuity calculator, using your age, gender, and monthly amount, which will give you the amount you would need to invest to create a lifetime monthly income stream of that amount. To generate my the gross value of my current pensions (not including Social Security), I'd have to invest somewhere in the neighborhood of $750,000. For retirement purposes, not intending to will it to heirs, that's money in the bank. Again, for retirement purposes only, shouldn't that be considered in my net worth calculation?

Above the 95% and still feel middle class.

In the last 6 weeks, I paid $3,000 to have vehicle repaired from accident by uninsured motorist, and $1,500 for 30 day supply of diabetics medication. At this rate I’ll be broke in no time.

I retired at 58 with a net worth of 3.4 million I own 3 homes and retired with 1.4 million in my 401k but after 3 yrs of Joe Biden I now have 3 homes that are worth less money because nobody will buy a house at 8% interest and my 401k is down t $980.000 so I say FJB! And thanks Democrats you picked a real winner.

I would be retiring or working less in 5 years, and I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $90K per year but nothing to show for it yet.

When is a Retiree Considered "Wealthy"?

When they've enjoyed their money while young enough to actually enjoy it, paid of their house and other debt instead of watching their "retirement" grow and managed to save some money but still choose to work because idle time is boring.

You are missing a group of wealthy that don't fall into your numbers. But are more well off than many of the wealthy who have far more money. And that group are the pensioners, especially government pensioners like teachers. To correctly compare them, you have to consider their pension as an annuity. Then figure out the value of the annuity on the open market (maybe add 3% because its government guaranteed). When you do this you will find that most full government pensioners like your Kindergarten teacher are wealthy. And there are far more wealthy than are counted because there are literally millions of people collecting full government pensions.

Just FYI, the town of Atherton, CA, just a short way north of the Loyola area, had a median home price in 2023 of $7,950,000. I lived there with my family from 1958 to 1968. In 1960 we bought a sprawling home on 2 landscaped acres with 5 bedrooms, and 4 baths for $70,000 (expensive at the time). It is now valued at over $21.5 million. It's true, you can't go home again. 😢

Though Americans are only required to take a certain portion of their retirement savings out as distributions each year, a study from JPMorgan Chase shows that there is likely good reason to take out more. I want to know: How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $3M over time?

Who cares???

That's a huge spread between $281K and $1.9 million.

weird how you never take the value of pensions into account. I get that it is not a majority of US workers, but those of us who worked in jobs that pay a pension--military, police, FD, civil service--have that as wealth through our retirement years. While it is not "cash in the bank" so to speak, the value of the pension is wealth. I'd like to see you talk to that dynamic sometime, because many of us made next to nothing for years, had to move every other year and never owned homes, real estate, or had anything to put into an IRA for 10-20 years. This means that the generic advice really does not apply to the 15% of us out here who are in this category.

La jolla is 400 miles from San Francisco in Southern California.

Skip to 4 minutes in to get to numbers

I am very close to 99th percentile but only live as if im well off.

No useful at all…..move on.

You’re called rich when the IRS wants your money.

Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.

I would say im probably in the 80% range counting my pensions as net worth.

How do you calculate pensions into net worth? Annual amount ÷ by 5%

One thing missing in this analysis is the equivalent of wealth which produces steady income like someones SS benefit, pension and an annuity that they bought for lifetime income.

95 percentile at 55 alone with no spouse or additional net worth source. I still don't feel secure and when talking with my financial advisor and running the Monte Carlo scenarios that go out to age 90, I feel even less so. I cannot imagine being what is like to be paycheck to paycheck with very little net worth

I just recently went from the 20th to the 95th and im needing a good financial advisor

Net worth is important, but what is more important is the retiree's annual income.

I lucked into a job that I loved but also offered me a 401-k plan. So, every one of my dollars invested was matched by my employer, and over a career of 34 years, that plan grew into a pretty piggy bank. I'm not wealthy, just lucky. And . . . I've always lived within my means. Oh . . . one more thing: greatest piece of advice I was ever given as I thought about retiring was this--make sure that you retire TO SOMETHING and not just FROM SOMETHING.

I've come to realize that the key to amassing wealth lies in making sound investments. I purchased my first home at the age of 21 for $87,000 and sold it for $197,000. My second home, acquired for $170,000, was later sold for $320,000, and my third property, purchased at $300,000, fetched $589,000, with buyers covering all closing costs and expenses. Not reaching a million before retirement feels like an unfulfilled goal.||

You have some fantastic content on your channel. At 53 years old, my wife and I achieved a net worth of $1 million back in 2017. Fast forward five years, and it has grown to $2.4 million. Despite our combined annual salary of just over $100,000, we have adopted a frugal lifestyle. We continue to drive older cars, prepare meals at home, and make use of leftovers. Additionally, we have two children currently in college. Fortunately, we had saved for their college expenses, and they are contributing by working part-time. As a result, they will graduate without any student debt.

I retired in 2008 at the age of 51 with a pension and very small SS monthly paycheck(At 62). My net worth has grown significantly since retirement. My net worth now is 1.5 million with a monthly income of $9,000, no debt whatsoever. I've been single most of my life but just got married to a younger woman who is basically a housewife and the love of my life. Not rich but we are surviving.....Not bad for a guy from the hood.

I am 76 years old and been fully retired since 2015. I have never spent one penny of our retirement savings. We live off a pension and social security. Those two together are about $100,000 per year. Our investments are growing about $10,000 per month which I could live off but chose to continue to reinvest. We are both healthy and still walk daily and go to the gym twice a week. I have no idea where I am on the spectrum, but “happy” should be one of your statuses … which we are.

After having worked 47 years in Hospitality and raising 3 daughters..."Retired Wealthy" is anyone having any savings...I live only on SSA and some minor consulting......I find I can actually live really well on $52K a year vs my last salary of $189K a year. I have no savings, no assets, no real estate, I don't even own a car.

Thank you. It's nice you actually gave numerical figures for each category