Retirement is often seen as the time to enjoy the fruits of years of hard work, aiming for a comfortable, financially secure life. But when it comes to being “wealthy” in retirement, what exactly does that mean? Is it just about the money in the bank, or does it involve something more substantial?

A 2024 study by the National Institute on Retirement Security revealed that many Americans feel a sense of anxiety as they approach retirement, worsened by inflation. With rising costs affecting nearly every aspect of life, retirees are finding it harder to maintain their financial well-being.

Geoffrey Schmidt, a certified public accountant, author, and international speaker, explores this idea in a YouTube video from “Holy Schmidt!”. Schmidt unpacks what “wealthy” really means in retirement, and helps viewers understand where they might stand on the wealth spectrum.

So, what exactly is retirement wealth? It’s a complex concept that includes a wide range of financial situations, from minimal savings to vast fortunes. To determine where you fall on this scale, you must understand percentiles and net worth.

Net worth is essentially the total value of your assets, like homes, savings, and investments, minus liabilities such as mortgages and loans. Using this data from the Federal Reserve, we can break down retirement wealth into different percentiles.

At the 20th percentile, with a net worth of around $10,000, retirees face financial struggles. They likely have few assets, and homeownership and investments are uncommon in this group.

The 50th percentile stands at $281,000, providing retirees with a comfortable middle-class lifestyle. They enjoy moderate savings and home equity, enabling them to afford occasional luxuries and social activities.

Those in the 90th percentile, with a net worth of $1.9 million, are well off. They often have substantial savings, investments, and enjoy a rich lifestyle, which may include traveling the world and supporting charitable causes.

Reaching the 95th percentile, with $3.2 million in net worth, places retirees firmly in the wealthy category. These individuals have financial freedom and engage in comprehensive wealth planning, owning multiple properties and managing complex investment portfolios.

At the top, in the 99th percentile, retirees boast a net worth of $16.7 million. They exemplify financial success, leading lavish lifestyles with luxury travel, diverse investments, and financial security.

However, retirement wealth isn’t just about numbers. It goes beyond your net worth to include a sense of freedom, security, and fulfillment. True wealth in retirement is achieved through strategic planning, thoughtful decision-making, and creating a life you can enjoy. Whether you fall into the 20th or 99th percentile, understanding your financial situation can help you set goals for a retirement that aligns with your values and dreams.

Ready to take charge of your retirement? Now’s the time to plan your path toward financial success in your golden years.