What Retirement Income Puts You In The Top 1%
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When it comes to retirement, achieving financial security is a top priority for many individuals. Some dream of being able to enjoy their golden years without having to worry about money, while others aim to leave a lasting legacy for their loved ones. For those who want to ensure they are truly set for life, it may be worth looking into what it takes to be in the top 1% of retirement income earners.
In the United States, the top 1% of income earners are defined as those who make at least $422,000 per year. While this figure may seem daunting, it is important to note that retirement income is typically lower than yearly earnings during one’s working years. With this in mind, the threshold for being in the top 1% of retirement income earners is substantially lower than $422,000 per year.
According to recent research, the median retirement income for Americans aged 65 and older is around $50,000 per year. This means that to be in the top 1% of retirement income earners, one would need to have an annual income significantly higher than the median. The exact figure can vary depending on the source of income and the specific dataset being used, but it is generally agreed upon that to be in the top 1% of retirement income earners, an individual would need to have an annual income of at least $200,000 or more.
So, what kind of retirement income puts you in the top 1%? There are several sources of retirement income that could potentially elevate your status to the top 1%. These include:
1. Pension Plans: Some individuals are fortunate enough to have pension plans through their employers or unions. These plans provide a guaranteed income for life, and if the payments are substantial enough, they could certainly put someone in the top 1% of retirement income earners.
2. Annuities: An annuity is a financial product that provides a steady stream of income for a specified period of time, often for the rest of one’s life. If an individual has a high-value annuity, it could significantly boost their retirement income.
3. Retirement Accounts: Individuals who have diligently contributed to retirement accounts such as 401(k)s, IRAs, or other investment accounts could see a substantial income in retirement if their investments perform well. With a large enough nest egg, one could easily fall into the top 1% of retirement income earners.
4. Social Security: For many Americans, Social Security is a significant source of retirement income. While the average monthly benefit is around $1,500, those who have earned higher incomes during their working years can receive substantially more, potentially pushing them into the top 1%.
5. Investment Income: Finally, income from investments such as stocks, bonds, and real estate can also contribute to a high retirement income. If an individual has a diversified investment portfolio that generates substantial returns, it could certainly place them in the top 1% of retirement income earners.
In conclusion, achieving a retirement income that puts you in the top 1% is certainly within reach for those who are diligent savers, careful investors, and have access to lucrative retirement benefits. While the exact figure required to be in the top 1% may vary, it is clear that a combination of pensions, annuities, retirement accounts, Social Security, and investment income can provide the financial security necessary to be in the upper echelon of retirement income earners. It is important to consult a financial advisor to develop a retirement plan that maximizes income and ensures a comfortable and secure retirement.
I'm putting off taking out a mortgage for now and just focus on the stock market until the economic storm subsides, and since there is a bull run, the 100k I might have used for a down payment could make more some money in the stock market, but I'm not very familiar with stocks.
If you have Pension and/or SSI income, can you say your income is from the 4% Rule, say $40,000/yr from a pile of invested money of $1,000,000. Realizing you will never put your hands on that pile of money except for the 4%/yr, can you add that $1M into your net income?
You mentioned two stats – that top 1% in net worth for 65+ is 2.7M, and top 1% for income in the same group is 1M, which implies something like a 25M$ net worth. So how can those two be so different?
Well, I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered and I don't know where to go here out of devastation.
I'm currently pursuing a balance between fat and lean FIRE with the guidance of financial advisor David Marvin Willis. By diligently budgeting and keeping living costs in check, I save a substantial portion of my income. However, I prioritize enjoying life, dining out, going on holidays, and savoring good food at home. With the goal to grow my income in the next 5-10 years (I'm 34), maintaining a savings rate of 30-40%, I aim to potentially reduce working hours around the 45-50 age range. This journey, spanning the next 10-15 years, won't entail a bare minimum lifestyle.
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Michelle Stewart.
Acquiring a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $160K for some time now, but my major challenge is not knowing the best entry and exit strategies. I would greatly appreciate any suggestions.
Gross income or net income?
So retirees on the top one percent make MORE money than working folks in the top one percent?
(570k v one million)
Numbers would be easier to understand if charts were presented.
2.7 million in net worth, saved you 9 minutes
Interesting video; I wish I had more time for experimentation, but I'll be 50 by June, and I'm looking for ideas and suggestions on what investments to acquire to set myself up for retirement, especially with the looming inflation; my goal is to have at least $5 million by the age of 65.
Is the networth per household? If not that could explain the discrepancy.
Is that net or gross income. It makes a big difference!
I just 30 this year and have just under $40k in my own 401k and another $10k between my other retirement accounts. My wife has about $41k in her retirement accounts (she is not currently working). I currently make close to $63k a year. I only do 5% though to my 401k for the company match and another 10% of my income is split between an HSA and a ROTH IRA
I think you’re wrong. My understanding is that to be in the top 95% your net worth needs to be 3.25 million. So what? 1.9 million net worth puts you in the top 90%. To be in the top 99% it’s like 15 million.
Top 1% Net Worth is $10 Million, not $2.7.
Others have pointed out that other sources say that top one percent cut off for USA household net worth is about $11m. Assuming the other data that I have consistently seen is correct, I suspect you made the same mistake as a recent Wall Street Journal article. It confounded household retirement assets (which have limited annual contribution amounts) with household net worth.
who gives an f*? You are retired, enjoy it. 1%, 10%, 50%. When are you going to stop worrying about how rich you are relative to someone else, when you're dead?
Totally incorrect data. Who’s still talking about 4%. Your data is 1990
[4:47] In another video you said top 10% not 1% had 2.9 Million in savings. Some time people will have a one time increase in income due to a sale of a business or property which might get them into that $579K+ range. So a lot of the $570K people might be due to a one time income.
Easy, military retirees from USA or teachers from strong education states …..not only pensions that grow but health insurance included
Lol, these number are nothing but silly…I'd like to thank all those folks at those income levels for all the taxes they're paying so I don't have to…that's very generous of you. I've juked the stats and cracked the code with our frugal lifestyle that's inflation proof, recession proof and even tax proof. Those 1%s may have a high income but only 5 years saved on average, yikes they'll never sustain that in retirement and why would you ever want to? I can keep our lifestyle going for a few decades and I've got what they never will…enough I'll keep going too solely for the tax savings alone.
Cheers!
You are thinking about it wrong. the people in the top 1% of income, don't start out life in the top 1% of income.
By the time their income gets to the 570,000 or more range, they are often at peak earning, and only get to enjoy that for a few years.
So the top !% earners aren't saving too little vs their income, they only get that income for a very short amount of time.
whereas net worth is the total cumulative lifetime accumulation of asset.
that is why net worth is "only" a multiple of 5 of income for the "top 1%"
The top 1% wealth numbers here don’t match other sources. It’s far too low.
That’s why when you see a guy walking down the street and he’s not dressed that we’ll DO NOT JUDGE !
So I don’t feel too bad then from an overall income perspective but damn $1M/yr in retirement. No way I’ll hit that
Net worth is far more important than income when figuring out the top one percenters.
That top savings amount my be deceptively low because when you have a lot of wealth, it’s smart to put the assets into trusts so that they cannot be taken away yet you can still receive most of the benefits of having what is in the trust, and transferring it to your heirs can be done tax-free.
My dad always told me it's not what you make; it's what you save. With that said, I find it hard to believe that to be in the top you have 2.7M.
Best retirement is having a younger wife still making money.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Thanks!
I think what some of this doesn't catch is people with pension income. I know several people with 80-120k a year in pension income, but that wouldn't be factored into lump sum savings.
A lot of these comments on here are obvious advertisements for financial services.