News
Can you guess how many retire with a $5 million nest egg?
Can you guess how many retire with a $5 million nest egg?
In the realm of retirement savings, only a select group of people in the United States reach the $5 million nest egg mark.
Data from the Employee Benefit Research Institute, based on the Federal Reserve’s Survey of Consumer Finances, reveals that only 0.1% of retirees are able to accumulate more than $5 million in their retirement accounts, while only 3.2% accumulate more than US$1 million.
Don’t miss:
An analysis of those with about $5 million in savings, as reported by the Wall Street Journal, shows that these retirees often did not anticipate reaching such financial heights. They were consistent in their savings efforts from the beginning of their careers, but their lifestyles remained modest. Many continue to work part-time, forgo frequent shopping for new clothes, and although they splurge on global travel, they share the same health and family concerns as other older Americans.
However, Northwestern Mutual research indicates that Americans believe they need about $1.46 million to retire comfortably. However, the average retirement savings account balance paints a bleaker picture, standing at just $87,000, according to the latest numbers from the Federal Reserve’s Survey of Consumer Finances. See how these numbers break down by age group:
—Under 35: $18,880
—35-44: $45,000
—45-54: $115,000
—55-64: $185,000
—65-74: $200,000
—75 years and older: $130,000
Although the average balance for all families is over $333,940, this number is skewed upward by the wealthiest families. In addition to retirement accounts, many retirees also have substantial amounts held in regular savings, brokerage accounts and investment properties.
The equity in a retiree’s home also contributes significantly to their financial security. In 2021, home value represented a median of 45% of the total net worth of U.S. homeowners, indicating that a significant portion of the average person’s wealth comes from their primary residence.
The picture of the financial health of American retirees is therefore more nuanced than it seems. Financial planners advise considering all assets and net worth to fully assess retirement readinessrather than just focusing on retirement account balances.
While a $5 million nest egg is rare, achieving a comfortable retirement is still within reach. Per consulting a financial advisor, you can develop a personalized plan to achieve your retirement goals based on your financial situation and lifestyle aspirations. A financial advisor can provide valuable information and strategies to help you maximize your savings and ensure financial security during your retirement years.
The story continues
Read next:
*This information does not constitute financial advice and personalized guidance from a financial advisor is recommended to make well-informed decisions.
Jeannine Mancini has written about personal finance and investing for the past 13 years for a variety of publications, including Zacks, The Nest, and eHow. She is not a licensed financial advisor and the contents of this document are for informational purposes only and do not constitute or are intended to constitute investment advice or any investment service. Although Mancini believes the information contained herein to be reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “News & Everything” Trading Tool: Benzinga Pro – Click here to start your 14-day trial now!
Get the latest stock analysis from Benzinga?
This article Can you guess how many retire with a $5 million nest egg? originally appeared in Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.