WSJ - Here’s What a $5 Million Retirement Looks Like in America (spouse, state)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Actually that excludes every other investment outside of those three.
Based on only those 3..I'd be classified as upper poor/lower middle class and practically living in the streets
Yes, exactly. It sounds like they are playing with the numbers a bit to make it seem as though "everyone" is going into retirement flat broke, destitute. I'm not sure why they would do that.
I feel very fortunate to be within the top 7.2% with money saved for retirement. Oh my I feel bad for those that haven't started or have anything saved.
I know people who want nothing at all to do with financial markets. They have all their investment money in rental houses. These people are counted as having zero retirement assets for the article.
There's another category of people who don't trust the 401k system, believing that the government is going to ultimately screw them over in such an account. I have a friend in this camp. I'll bet he's got more than $5M, but very little of that is in "retirement" accounts.
My dad was a farmer. Most of the assets are in the form of farmland, and my mom still collects rent from leasing the land.
Sure, there are a lot of folks who haven't saved anything for retirement, but the situation is not as bad as articles like this suggest.
Great post. I am guessing a more accurate number is a low thirty something percent.
Yes, exactly. It sounds like they are playing with the numbers a bit to make it seem as though "everyone" is going into retirement flat broke, destitute. I'm not sure why they would do that.
I expect it's because those numbers are easy to find.
Trying to track down total assets takes far more work. It would be interesting to have some numbers, but it would need to be in done the form of a survey. Select a thousand people of retirement age at random, send them each a questionnaire and/or interview them. Of course there are issues with this, as a large percentage of the sample won't respond or submit to an interview... similar to the problems with political polling.
I expect it's because those numbers are easy to find.
Trying to track down total assets takes far more work. It would be interesting to have those numbers, but it would have to be in the form of a survey. Select a thousand people of retirement age at random, send them each a questionnaire and/or interview them. Of course there are issues with this, as a large percentage of the sample won't respond or submit to an interview... similar to the problems with political polling.
Yeah, it's all pretty meaningless. You could have a guy classified as having "no savings for retirement", yet, he'll be bringing in 10K/month worth of pensions and living in a 2.5 million dollar house.
Yes, exactly. It sounds like they are playing with the numbers a bit to make it seem as though "everyone" is going into retirement flat broke, destitute. I'm not sure why they would do that.
An agenda. There's always an agenda behind these stories of dire poverty in retirement.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,062 posts, read 7,497,585 times
Reputation: 9788
common: retirement age, pension, SS, homeownership, qualified and nonqualified assets, individual stocks, kids. married at one time, financial planning, and live within their income.
Y5MV
I'm quoting some of the facts and figures which I find interesting below
Quote:
Seventy percent of workers think they will work for pay in retirement, while only 27 percent of
retirees report doing so.
Overall, more than half (55 percent) retired earlier than expected, while 40 percent say they retired
about when than expected and 4 percent later than expected.
Similar to 2020, 7 in 10 in 2022 say Social Security is a major source of their income. Annual
household income is inversely related to reliance on Social Security as a major income source
At time of transition to retirement, over half (57 percent) of retirees were aware of annuities, yet
only 3 percent overall said they had plans to convert any current income sources into a
guaranteed income stream.8
Approximately half of retirees say they spend less than $2,000 each month, while 1 in 3 spend
between $2,000 and $3,999 each month. Sixteen percent spend between $4,000 and $6,999,
with only 3 percent spending $7,000 or more each month.10
On average, retirees report the following monthly spending allocation: 30 percent on housing,
26 percent on food, and 13 percent on health and medical.
More retirees in 2022 say spending is higher than they can afford (17 percent in 2020 vs. 29
percent in 2022)
Twelve percent of retirees have increased their discretionary spending (vs. 8 percent in 2020);
27 percent have increased their essential spending (vs. 23 percent in 2020)
Among those who decreased either their essential or discretionary spending since the
pandemic, the most common reason cited by roughly 9 out of 10 retirees was concern about
inflation
Back to the OP, the title of the WSJ article is "Here’s What a $5 Million Retirement Looks Like in America" so the cited reference of EBRI survey did not seem to fit. Maybe the author just wanted to illustrate the fact that only 0.1% of retirees having that kind of retirement income.
It is expected that when all sources of income are counted (and not just retirement income from defined contribution plans, IRAs, and Keoghs), there would be more retirees with income >= $5M.
It is not a surprise to see retirees who had accumulated their wealth by working, saving and investing continue to live the same way they did before retiring. Their spending pattern may change or shift to activities done more in retirement (travelling, eating out, hobbies vs. clothing, car, child care expenses, college funding) but the spending level is not likely to increase significantly.
The pilot did really well in the market, to have over $6M by age 65, after raising two kids and divorcing (pilots have a great life, but do not earn all that much, ie, his $ must be chiefly from the market). The general surgeon is not particularly retired, ie, if he made $300k in per diem work last year, he must have worked a total of about 9 months with no night call (which agrees with his statement that he travels 3 months per year. It sounds as though he has $1.7M in equity in two houses plus a little over $1M in investments, equaling about $3M, which is about exactly the average at which MDs retire).
If the retirement savings figures are for all the US households (not just for the retirees), the fact that 50% haven't saved anything for retirement is unsurprising. Median age in the US is 39 years.
It is also unsurprising that financially stable retirees who are not centimillionaires or billionaires don't pursue any extravagant spending.
Last edited by toosie; 08-28-2023 at 05:05 AM..
Reason: Edited out deleted post
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
