Top 1% of Retirees Have 16.7M

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our goal which we are on track to make is the 95th percentile.

I’m purposely not comparing myself to the “I can’t retire with a NW of 10M” crowd. I’m running my own race.

DH has about $1.3 mil in his retirement account. Yesterday, we looked at the growth month to month for the past 9 months. Growth per month averaged about $16.5K. Exclude taxes, it would be like $11.5K net. We can totally live off of that. And that's just his 401k. We have other accounts, and my 40k1 will have probably $1.7mil (conservative) when I'm 59 in a few years.

We could live off of the growth and not touch the principle. And in the years where the market tanks, we'll have cash saved from the previous years where we took out the growth only so we don't have to withdraw from our 401k. Our expense are not $20K/month.

Hey. You know that’s not how it works right? You can’t live off the growth and not touch the principal unless you are earning dividends.

Can't live off the growth in perpetuity but the months that there is growth, why can't you sell the same amount as the growth? Yes, in down markets the "principal" amount would go down, in which case, you don't sell.

You could buy it would whittle your number of shares down and be risky long term if that growth was seasonal or something

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

So if you are no longer paying for your kids day-to-day and no longer saving or paying for college and your house is paid off…seems like $200k per year keeps you in the same lifestyle.

Yes that is a given. But you may increase travel, want to travel in higher level of service, etc. But technically, yes you could live same lifestyle for less.
You can also live for less if you downsize. Take that paid off 5k sq ft home, net $1.5M and buy a condo for that or less and reduce overall costs. Also reducing items you have to manage. In a condo, your HOA fees cover the roof/exterior/landscaping/snow shoveling/etc. So you don't have to actively manage things, which is nice in retirement

Condos are a path to poverty. Better off staying in your previous house.

Not if the condo is in a city

Took our 18 yo condo (purchased 7 years ago and rented out), renovated it/gutted it. Now living in it as empty nesters. It's in one of the top 3 condo buildings in our major city. It will increase in value over time. Maybe not as much as a house. But I no longer wish to live in a suburb. I want to live in the city, not worry about anything on the exterior of my "home". My packages are delivered to my door (with no chance of being stolen, as it's in the condo building), my wine deliveries are always signed for, my dry-cleaning is picked up from the concierge desk and returned there 1-2 days later. I'm only responsible for the inside of my unit. No exterior painting or roof to worry about, windows are washed every 3 months, Hot water is central to the building, etc. That's what we want for our retirement.....we don't want to have to manage a home or deal with a large place. 1500 sq ft condo is perfect for 2 people.

Also, I don't need my condo to appreciate drastically. I own it fully, and real estate is only 5% of my Net worth. So it's something we own for both living and enjoyment. My other investments grow 10%+/year so if my condo only grows 2-3% I'm fine with that. It's about quality of living.

Agree with this. We have a condo we bought 10 years ago and while it has not appreciated aggressively, it's in a desirable central neighborhood walkable to lots of amenities and close to public transportation. Our original plan was to sell it this year, but given the current state of the market, we've decided to keep it and rent it out. Yes it would be nice to get a few hundred thousand in equity out of it now, but it's not totally necessary, and instead our plan is to finish paying it off and hold onto it as an investment property until retirement, at which point we'll either move back into it (allowing us to sell our house) or sell it for the proceeds and invest them. It's actually pretty great to have an investment that also serves as an alternative housing option down the road, in case we realize we really want to be back in the city. This way we won't have to buy or rent a condo at whatever the market rate is at that point. We already have one (and got it pretty cheaply because of when we bought).

Condos are the first thing to go down the crapper when the Real Estate market crashes (and this one will too). Owners are typically stuck with their condos for several years before price recovery. Be mindful of that.

[Anonymous]

Of course the top 1% have this much. I wouldn't have expected anything lower this is America after all lol

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

So if you are no longer paying for your kids day-to-day and no longer saving or paying for college and your house is paid off…seems like $200k per year keeps you in the same lifestyle.

Yes that is a given. But you may increase travel, want to travel in higher level of service, etc. But technically, yes you could live same lifestyle for less.
You can also live for less if you downsize. Take that paid off 5k sq ft home, net $1.5M and buy a condo for that or less and reduce overall costs. Also reducing items you have to manage. In a condo, your HOA fees cover the roof/exterior/landscaping/snow shoveling/etc. So you don't have to actively manage things, which is nice in retirement

Condos are a path to poverty. Better off staying in your previous house.

Not if the condo is in a city

Took our 18 yo condo (purchased 7 years ago and rented out), renovated it/gutted it. Now living in it as empty nesters. It's in one of the top 3 condo buildings in our major city. It will increase in value over time. Maybe not as much as a house. But I no longer wish to live in a suburb. I want to live in the city, not worry about anything on the exterior of my "home". My packages are delivered to my door (with no chance of being stolen, as it's in the condo building), my wine deliveries are always signed for, my dry-cleaning is picked up from the concierge desk and returned there 1-2 days later. I'm only responsible for the inside of my unit. No exterior painting or roof to worry about, windows are washed every 3 months, Hot water is central to the building, etc. That's what we want for our retirement.....we don't want to have to manage a home or deal with a large place. 1500 sq ft condo is perfect for 2 people.

Also, I don't need my condo to appreciate drastically. I own it fully, and real estate is only 5% of my Net worth. So it's something we own for both living and enjoyment. My other investments grow 10%+/year so if my condo only grows 2-3% I'm fine with that. It's about quality of living.

Agree with this. We have a condo we bought 10 years ago and while it has not appreciated aggressively, it's in a desirable central neighborhood walkable to lots of amenities and close to public transportation. Our original plan was to sell it this year, but given the current state of the market, we've decided to keep it and rent it out. Yes it would be nice to get a few hundred thousand in equity out of it now, but it's not totally necessary, and instead our plan is to finish paying it off and hold onto it as an investment property until retirement, at which point we'll either move back into it (allowing us to sell our house) or sell it for the proceeds and invest them. It's actually pretty great to have an investment that also serves as an alternative housing option down the road, in case we realize we really want to be back in the city. This way we won't have to buy or rent a condo at whatever the market rate is at that point. We already have one (and got it pretty cheaply because of when we bought).

Condos are the first thing to go down the crapper when the Real Estate market crashes (and this one will too). Owners are typically stuck with their condos for several years before price recovery. Be mindful of that.

Im the PPP (previous PP). We plan to actually live in ours for the next 20+ years. So the inherent value for us is it's our home. We renovated to make it exactly what we wanted (never renovated in the past 30 years, just lived with what was in our nicer homes). Now we have the $$$ and want to live at 50+ with what we love. However, condos in a major city will not depreciate a ton. You may not see astronomical appreciation, but the right condo in the right location will hold value and get some appreciation. We are in one of the top 3 condos in our city, with a great HOA management (we fix problems before they become major issues, and are well funded) with a great concierge/management team. Centrally located. It has held value for 8 years now.

[Anonymous]

Anonymous wrote:Of course the top 1% have this much. I wouldn't have expected anything lower this is America after all lol

Yes, shocking, the rich manage to save money. And then use that money to make themselves richer. That is what smart people do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Of course the top 1% have this much. I wouldn't have expected anything lower this is America after all lol

Yes, shocking, the rich manage to save money. And then use that money to make themselves richer. That is what smart people do.

Very true! We lived very comfortably but well below our means and always saved as soon as we got married. Aggressive saving and compounding is a beautiful thing. We are now retired and last year our interest and dividends alone were around $850k. Every college student should be required to take a financial planning course that deals with saving and investing.

[Anonymous]

These “top x% have $y” studies are interesting, because they include the outsized mega rich, billionaires, etc. those must pull the numbers up a lot, when it comes to the average of the top 1% figures. I’m curious if you did the average of the top 99% to 99.95% and took off the very top 0.05% what the average would look like. I bet it’s much lower than $16M

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

So if you are no longer paying for your kids day-to-day and no longer saving or paying for college and your house is paid off…seems like $200k per year keeps you in the same lifestyle.

Yes that is a given. But you may increase travel, want to travel in higher level of service, etc. But technically, yes you could live same lifestyle for less.
You can also live for less if you downsize. Take that paid off 5k sq ft home, net $1.5M and buy a condo for that or less and reduce overall costs. Also reducing items you have to manage. In a condo, your HOA fees cover the roof/exterior/landscaping/snow shoveling/etc. So you don't have to actively manage things, which is nice in retirement

Condos are a path to poverty. Better off staying in your previous house.

Not if the condo is in a city

Took our 18 yo condo (purchased 7 years ago and rented out), renovated it/gutted it. Now living in it as empty nesters. It's in one of the top 3 condo buildings in our major city. It will increase in value over time. Maybe not as much as a house. But I no longer wish to live in a suburb. I want to live in the city, not worry about anything on the exterior of my "home". My packages are delivered to my door (with no chance of being stolen, as it's in the condo building), my wine deliveries are always signed for, my dry-cleaning is picked up from the concierge desk and returned there 1-2 days later. I'm only responsible for the inside of my unit. No exterior painting or roof to worry about, windows are washed every 3 months, Hot water is central to the building, etc. That's what we want for our retirement.....we don't want to have to manage a home or deal with a large place. 1500 sq ft condo is perfect for 2 people.

Also, I don't need my condo to appreciate drastically. I own it fully, and real estate is only 5% of my Net worth. So it's something we own for both living and enjoyment. My other investments grow 10%+/year so if my condo only grows 2-3% I'm fine with that. It's about quality of living.

Agree with this. We have a condo we bought 10 years ago and while it has not appreciated aggressively, it's in a desirable central neighborhood walkable to lots of amenities and close to public transportation. Our original plan was to sell it this year, but given the current state of the market, we've decided to keep it and rent it out. Yes it would be nice to get a few hundred thousand in equity out of it now, but it's not totally necessary, and instead our plan is to finish paying it off and hold onto it as an investment property until retirement, at which point we'll either move back into it (allowing us to sell our house) or sell it for the proceeds and invest them. It's actually pretty great to have an investment that also serves as an alternative housing option down the road, in case we realize we really want to be back in the city. This way we won't have to buy or rent a condo at whatever the market rate is at that point. We already have one (and got it pretty cheaply because of when we bought).

Condos are the first thing to go down the crapper when the Real Estate market crashes (and this one will too). Owners are typically stuck with their condos for several years before price recovery. Be mindful of that.

Im the PPP (previous PP). We plan to actually live in ours for the next 20+ years. So the inherent value for us is it's our home. We renovated to make it exactly what we wanted (never renovated in the past 30 years, just lived with what was in our nicer homes). Now we have the $$$ and want to live at 50+ with what we love. However, condos in a major city will not depreciate a ton. You may not see astronomical appreciation, but the right condo in the right location will hold value and get some appreciation. We are in one of the top 3 condos in our city, with a great HOA management (we fix problems before they become major issues, and are well funded) with a great concierge/management team. Centrally located. It has held value for 8 years now.

If it's your home and you are not planning on selling, it shouldn't matter. Check the values though.. In general, condos become 'fancy' and expensive towards the tail end of a housing boom and are the first to drop in value when the RE market starts tanking. If you are not dependent on selling one during those times, you should be fine as long as it's not in a location caught up by euphoria (e.g. Florida before the last crash and the direction they seem to be headed towards now).

[Anonymous]

Anonymous wrote:These “top x% have $y” studies are interesting, because they include the outsized mega rich, billionaires, etc. those must pull the numbers up a lot, when it comes to the average of the top 1% figures. I’m curious if you did the average of the top 99% to 99.95% and took off the very top 0.05% what the average would look like. I bet it’s much lower than $16M

Typically, the numbers refer to entry level for a particular threshold. The article in the OP did not explicitly state this. However, as it was cast in terms of retirees, the $16 million could well be the entry level. It would be lower if it included both retired and non-retired.

[Anonymous]

Anonymous wrote:These “top x% have $y” studies are interesting, because they include the outsized mega rich, billionaires, etc. those must pull the numbers up a lot, when it comes to the average of the top 1% figures. I’m curious if you did the average of the top 99% to 99.95% and took off the very top 0.05% what the average would look like. I bet it’s much lower than $16M

The article notes that 16.7M is the 99th percentile. That means the poorest retiree in the top 1% has 16.7M. The fact that there are billionaires doesn't pull up this number because percentiles don't represent the average statistic of a group but the cut-off to be in that group.

[Anonymous]

Anonymous wrote:

Anonymous wrote:These “top x% have $y” studies are interesting, because they include the outsized mega rich, billionaires, etc. those must pull the numbers up a lot, when it comes to the average of the top 1% figures. I’m curious if you did the average of the top 99% to 99.95% and took off the very top 0.05% what the average would look like. I bet it’s much lower than $16M

The article notes that 16.7M is the 99th percentile. That means the poorest retiree in the top 1% has 16.7M. The fact that there are billionaires doesn't pull up this number because percentiles don't represent the average statistic of a group but the cut-off to be in that group.

Agreed. I posted the numbers for averages in general (not specifically retired people) and the "threshold" to enter the top 1% for the US population in 2023 was about 13M. (I posted the breakdown by age group, probably on the 1st or 2nd page of this thread.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

So if you are no longer paying for your kids day-to-day and no longer saving or paying for college and your house is paid off…seems like $200k per year keeps you in the same lifestyle.

Yes that is a given. But you may increase travel, want to travel in higher level of service, etc. But technically, yes you could live same lifestyle for less.
You can also live for less if you downsize. Take that paid off 5k sq ft home, net $1.5M and buy a condo for that or less and reduce overall costs. Also reducing items you have to manage. In a condo, your HOA fees cover the roof/exterior/landscaping/snow shoveling/etc. So you don't have to actively manage things, which is nice in retirement

Condos are a path to poverty. Better off staying in your previous house.

Florida coastal areas are having fire sales on the condo market.