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The figure is misleading. You should not include all population into calculations of things like this one. If you include children or students, your numbers become irrelevant. The more relevant figure would be to see net worth of working adults with at least 5-10 years of work experience.
Not to turn this into a political conversation, but I wonder how changing to a single payer healthcare system would affect the amount people need for retirement.
Healthcare is the wild card when it comes to retirement savings.
Not to turn this into a political conversation, but I wonder how changing to a single payer healthcare system would affect the amount people need for retirement.
Healthcare is the wild card when it comes to retirement savings.
It's an interesting question, worthy of serious consideration, particularly when you consider the US median net worth ranks at the bottom of almost every modern industrialized state, all of which have national health care systems (and pretty decent pension systems).
Even if that's the case it's still a pathetic number on average. Built up equity only helps if you are going to sell, move and live elsewhere
Unless you need a home equity loan on a property that has a lot of equity. What about paid off rental property that produces a positive cash flow every month?
Unless you need a home equity loan on a property that has a lot of equity. What about paid off rental property that produces a positive cash flow every month?
A heloc isn't something you should live on, does it help in a jam? Sure but then after it's created it's no different that carrying a mortgage.
On the rental that's nice but a completely different topic. Positive cash flow is beneficial but you would have to compare that to the same dollar figure invested as the value of the real estate, minus expenses. It is a different beast than your primary residence though
I think that the home equity part of the retirement equation is something to be considered, but I think that the majority of retirees don't move unless they are forced to. After spending 20 to 30 years in the same house I don't think that older folks are willing to move for extra retirement money. If they are forced to sure, but I think the majority will not move. Familiarity and comfort are very important issues to retirees.
Excluding homes - a common practice, but not a realistic one. There is an enormous difference between someone that owns a 250,000 home free and clear with 15k in the bank and someone that rents with 15k in the bank.
It would make sense to assume they needed to have their home paid off, and perhaps to look at it is the amount of networth the person has beyond the cost of a reasonable home in the area they intend to require in. Renting in retirement is for people that will die very quickly.
Pension Benefit Guaranty Corporation is no guarantee of full pension payment
Quote:
Originally Posted by katestar
Pensions, those must have been nice!
Not if you relied on it, and now find the system is bankrupt. For better or worse, many corporations ended pensions in the '90s, so they are really only common amongst people over 50.
Even for funds insured by PBGC, when a plan fails only 85 percent of pensioners receive the full amount of their promised benefit. And PBGC itself is underfunded.
You can't trade a home for a different asset class, but couldn't you tap into that equity with a HELOC or reverse mortgage? It's not something I would do, but it's an option that makes a house more useful.
not without borrowing money and having the burden to pay it back you can't. in fact i was able to enter in to one of the greatest real estate partnerships of my life only because i rented and did not have my money tied up in a house anymore.
no way could i have done the deal if i had to take a loan and worry about paying that money back while the investment was in the early stages.
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Pension Benefit Guaranty Corporation is no guarantee of full pension payment
