Top 1% of Retirees Have 16.7M

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:120k salary is 90th percentile. Makes sense they end up with a 90th percentile retirement as someone making 120k and maxing retirement and owning their own house with no mortgage should have about 2M in assets by late 60s.

A lot of inflation. You're thinking in 1990s numbers when it's 2024.

120k is only the 70th percentile for household income. The average household has more than 1 person working. Also people can’t spend most of the home value associated with their house unless they sell it and live in a tent. 2M is not a lot of money anymore especial when 500k-1M is tied up in your home. Here’s a real world example. My grandparents Net worth would be about 1.6M under this methodology and 675k of this is from social security pension, with another 500k from their paid off house. But they only have 400k of assets excluding house and pensions. One of them got a cancer recently and they will be on the hook for the remaining 20% of medical bills not covered by Medicare. If the first line treatment therapy does not work, the only option left are some very expensive gene therapies that cost 400-500k. They will be on the hook for the 80-100k not covered by Medicare. The first line therapy for this cancer has a “cure” rate around 50%. So the total cost of treating this cancer will easily reach 100k+ if they are unlucky and need gene therapy treatment. A single medical incident can easily wipe out 25%+ of their existing liquid assets. They are not that old and it is very likely that one of them will live another 15+ years.

Why don't they have health insurance to cover the gap not covered by medicare?

My father has advanced parkinsons and sees doctors all the time and every penny is covered by health insurance + medicare. Including several major surgery bills from when he fell down the steps and broke his spine. Every single penny was paid out by the health insurance + medicare. The only thing they paid out of pocket for the last few years of treatment and appointments was parking.

I am curious about this too. My parents have had all sorts of major surgeries that were 100% covered. I had to sign my dad out once by going to billing and he didn't pay any of the 500K bill. Medicare plus both drug and another supplemental, not Medicare advantage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The media generally lacks perspective and context and likes to talk about "the never-before-seen transfer of wealth between the boomers and their kids".

What they fail to mention is that people have higher standards of living than in past generations and we are on our way to a multipolar world, leaving behind post-WWII American supremacy.

So yes, we'd better have money saved.

Top contender for one of the smartest comments on DCUM. Spot on. World is changing. I’d like to retire when we have 10m plus banked. Our net worth is currently 5 plus but it’s not liquid, tied up in stocks and real estate. I’m also not sure hubby is the retirement type, he loves work and “the hunt”. My dad is 85 and living off of his real estate (rented out) and 2m plus portfolio and it feels desperately stressful and low budget. Please save for your retirement folks and if possible, STOP blaming the boomers for everything affecting your sad sack lot in life!!!

85 years old, collecting social security + rental income and has 2m portfolio and feels broke? Something is wrong with this picture. Even without social security he could live off rental income and a 4% draw on the 2m portfolio and have a solid 6 figure income, enough for a comfortable retirement home/assisted living for his last 10 years on this earth. And still be able to pass on a solid inheritance to you.

No social security, exorbitant effective tax rate, and started paying for Medicare just a few years ago so premium is high. His life was poorly planned for and expensive!!! I’m telling you, I am thankful for what he has but it is worrisome all things considered.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The media generally lacks perspective and context and likes to talk about "the never-before-seen transfer of wealth between the boomers and their kids".

What they fail to mention is that people have higher standards of living than in past generations and we are on our way to a multipolar world, leaving behind post-WWII American supremacy.

So yes, we'd better have money saved.

Top contender for one of the smartest comments on DCUM. Spot on. World is changing. I’d like to retire when we have 10m plus banked. Our net worth is currently 5 plus but it’s not liquid, tied up in stocks and real estate. I’m also not sure hubby is the retirement type, he loves work and “the hunt”. My dad is 85 and living off of his real estate (rented out) and 2m plus portfolio and it feels desperately stressful and low budget. Please save for your retirement folks and if possible, STOP blaming the boomers for everything affecting your sad sack lot in life!!!

85 years old, collecting social security + rental income and has 2m portfolio and feels broke? Something is wrong with this picture. Even without social security he could live off rental income and a 4% draw on the 2m portfolio and have a solid 6 figure income, enough for a comfortable retirement home/assisted living for his last 10 years on this earth. And still be able to pass on a solid inheritance to you.

Agreed that something seems off here. 2M portfolio, rental income, SS. Does he have high property taxes? Does he still have mortgages?

[Anonymous]

Anonymous wrote:Does "wealth" include equity in your primary home?

Yes, because sane people don't follow the absurd DCUM practice of pretending that home equity in not an asset.

[Anonymous]

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.

[Anonymous]

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.

I couldn't even read that thread because it seemed ridiculous and tone deaf given the audience. BUT, it really is all about how one is invested and how much one spends. I could easily live on 10M NW. But I have a friend who couldn't and maintain their current lifestyle. So it is all relative.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Does "wealth" include equity in your primary home?

Yes, because sane people don't follow the absurd DCUM practice of pretending that home equity in not an asset.

If this is the PP who has the dad who can barely get by on 2M NW, and if house equity is a significant part of that, then yes, I can see how someone who gets no SS, which means they also didn't pay into Medicare so have to pay for it (I didn't know this was possible) would be strapped.

As to the snark about "sane people" and the absurd practice of NOT including home equity in the equation, the dad situation is a perfect example why many people do not include home equity. You have to live somewhere. If you can't sell the house then it does no good in supporting retirement expenses. This also explains why the post didn't make any sense. Basically the dad isn't earning 4% on 2M.

[Anonymous]

95th %, works for me. Will never get to 99%. I'm good with that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:3.2M is not even close to wealthy.That is only 128k in annual income before taxes. That is not even the 75th percentile for household income. That is a solidly middle class income and it will provide you an acceptable retirement, but not a life of luxury.

Exactly and it includes equity so actual income is even lower.

I disagree because 128k pretax without a mortgage or rent payments is not middle class. It’s not Kardashian level spending either but that’s not my goal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Does "wealth" include equity in your primary home?

Yes, because sane people don't follow the absurd DCUM practice of pretending that home equity in not an asset.

+10000

[Anonymous]

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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Does "wealth" include equity in your primary home?

Yes, because sane people don't follow the absurd DCUM practice of pretending that home equity in not an asset.

If this is the PP who has the dad who can barely get by on 2M NW, and if house equity is a significant part of that, then yes, I can see how someone who gets no SS, which means they also didn't pay into Medicare so have to pay for it (I didn't know this was possible) would be strapped.

As to the snark about "sane people" and the absurd practice of NOT including home equity in the equation, the dad situation is a perfect example why many people do not include home equity. You have to live somewhere. If you can't sell the house then it does no good in supporting retirement expenses. This also explains why the post didn't make any sense. Basically the dad isn't earning 4% on 2M.

You can get a reverse mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The media generally lacks perspective and context and likes to talk about "the never-before-seen transfer of wealth between the boomers and their kids".

What they fail to mention is that people have higher standards of living than in past generations and we are on our way to a multipolar world, leaving behind post-WWII American supremacy.

So yes, we'd better have money saved.

Top contender for one of the smartest comments on DCUM. Spot on. World is changing. I’d like to retire when we have 10m plus banked. Our net worth is currently 5 plus but it’s not liquid, tied up in stocks and real estate. I’m also not sure hubby is the retirement type, he loves work and “the hunt”. My dad is 85 and living off of his real estate (rented out) and 2m plus portfolio and it feels desperately stressful and low budget. Please save for your retirement folks and if possible, STOP blaming the boomers for everything affecting your sad sack lot in life!!!

How much is the $2mil earning per month, and what is his monthly expenses?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Does "wealth" include equity in your primary home?

Yes, because sane people don't follow the absurd DCUM practice of pretending that home equity in not an asset.

If this is the PP who has the dad who can barely get by on 2M NW, and if house equity is a significant part of that, then yes, I can see how someone who gets no SS, which means they also didn't pay into Medicare so have to pay for it (I didn't know this was possible) would be strapped.

As to the snark about "sane people" and the absurd practice of NOT including home equity in the equation, the dad situation is a perfect example why many people do not include home equity. You have to live somewhere. If you can't sell the house then it does no good in supporting retirement expenses. This also explains why the post didn't make any sense. Basically the dad isn't earning 4% on 2M.

If your father would rather earn 4% on 2M in equities, then he can sell his house and earn that 4%. Surely there must be some landlord out there who would be willing to rent to someone with 2M in relatively liquid assets.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The media generally lacks perspective and context and likes to talk about "the never-before-seen transfer of wealth between the boomers and their kids".

What they fail to mention is that people have higher standards of living than in past generations and we are on our way to a multipolar world, leaving behind post-WWII American supremacy.

So yes, we'd better have money saved.

Top contender for one of the smartest comments on DCUM. Spot on. World is changing. I’d like to retire when we have 10m plus banked. Our net worth is currently 5 plus but it’s not liquid, tied up in stocks and real estate. I’m also not sure hubby is the retirement type, he loves work and “the hunt”. My dad is 85 and living off of his real estate (rented out) and 2m plus portfolio and it feels desperately stressful and low budget. Please save for your retirement folks and if possible, STOP blaming the boomers for everything affecting your sad sack lot in life!!!

85 years old, collecting social security + rental income and has 2m portfolio and feels broke? Something is wrong with this picture. Even without social security he could live off rental income and a 4% draw on the 2m portfolio and have a solid 6 figure income, enough for a comfortable retirement home/assisted living for his last 10 years on this earth. And still be able to pass on a solid inheritance to you.

No social security, exorbitant effective tax rate, and started paying for Medicare just a few years ago so premium is high. His life was poorly planned for and expensive!!! I’m telling you, I am thankful for what he has but it is worrisome all things considered.

Why doesn’t he get social security?