Unedited Transcript:

Mark Struthers (00:00.216)

Welcome to the Healthy and Wealthy Retirement, where your certified retirement counselor marks others. Take the holistic approach to retirement, going beyond finances and embracing holistic well-being. This YouTube channel will address not just the financial part of retirement, but also the social, the physical, and the emotional parts of retirement. Everything you need for a healthier, a wealthier, and a happier retirement.

Here is your host, Mark Struthers.

Welcome to the Healthy and Wealthy Retirement. My name is Mark Struthers. I am your host. Happy Fourth of July, everybody. Would you like to be a one percenter? Or see if you’re on track to join the 1 % club in retirement savings. And some of the numbers might surprise you. There certainly are big numbers, but I think some people are surprised that maybe they’re not bigger. Most Americans do struggle to save for retirement.

The top 1 % as you might guess certainly amass a nice nest egg. Although oddly enough, I work with a lot of clients that fall into these categories here in Minnesota or actually across the country, but especially in Minnesota who don’t really feel like they’re the one, like they’re one percenters. So we often don’t appreciate how much we have.

When you think about retirees before we get to the numbers One stat and I believe all this came from the Federal Reserve that this is Federal Reserve data So a small fraction retirees actually have saved that ever elusive 1 million dollars 1 million dollars used to be a lot of money. It still is It is still a fantastic number to get to if you can

Mark Struthers (01:59.694)

And the percentage that have actually saved that in the US This actually did surprise me is around 9 % It says somewhere between 8 and 10 % So when I heard that number There are two things that occurred to me one is That did not factor in the value of someone told That’s a conversation that we’re gonna have more and more When I just listened to a podcast from the Institute of Wealth Management and they talked about it’s a concern for folks because as we age and if our income streams are kind of fixed that if the value of our home is increasing the cost of that home is increasing and I’m not going to go too far in a tangent even though I’m known for that but it’s a concern because while the value of your home might be going up it often isn’t going up

enough to compare to other assets. You know, if you need to grow assets at 6 % for long term care or other goals, whatever they may be in your home is only going up at three to four. And that doesn’t include the cost and the cost of the home. You know, you can figure 1 % for property taxes, half a percent for insurance and so on and so on. That’s a separate podcast. But that when I heard about only 10, 9 %

of folks having $1 million. I think if you factor in home equity, that would be different. The question is, how do you, from a financial plan standpoint, how do you factor that in? Especially if you don’t have access to it, if someone doesn’t.

Another stat that I found interesting in 2023, the average American retiree had about 170,000, which is not a lot, especially if you count long-term care costs, a decrease from 191,000 in 2022. That surprised me.

Mark Struthers (04:02.862)

Taking amount take take into account general recommended savings amounts for the typical retiree It’s recommended that the typical person have just over half a million now They I did not get what what they used for that number. I’m guessing it’s something like the 10 % roll But only 12 % of retirees have achieved or exceeded that recommended amount. So Those are concerning but again, they don’t factor in

the equity of someone’s home and it also doesn’t factor any pensions. Pensions are less and less common, but for a lot of baby boomers, they still have them. They still are a big asset.

The overall retirement savings for the wealthiest 1 % is around 2.3 million. And if you consider a broader definition of retirement assets, that figure jumps to five. That’s a big number. know, it is a, we’re such a house centric society and because of secular changes, the cost of homes keep going up that, that it is a concern when you think about.

For a financial standpoint and just a mindset around, do you use some of these less liquid assets to help with your…

So for the top 1 % by age group, we’re only gonna cover three age groups. So 50 to 54 is at 2.3 million for the top 1%. 55 to 59, a little over 3.1 million. And 60 to 64, 3.5. And then it does, after the age of 70, then they start to drop off. So it keeps getting larger with age. And keep in mind, this is the top 1%. Now, these figures, if you’re in New York,

Mark Struthers (05:56.266)

and you’re a 65 year old, $3 million I’m sure is a lot of money, but it’s not the same as having $3 million if you’re in Minnesota, if you’re in rural Minnesota, rural Mississippi. And part of the big chunk of that is housing as well. We watch these home and garden network shows and then when they’re buying a home, some place really expensive, a million dollars won’t buy you much of a home in Manhattan.

but a million dollars will buy you a lot, a lot of home in rural Mississippi. The reason I chose these three age groups is because this, this is really where people start to think about retirement and retirement transition. there are certainly folks who work to 70, but what I have found matches this other data point, from the federal reserve is that the, the average retirement age for in the U S is 60.

which is young, but I’m not totally surprised. And with a median age of 62 and 62, I find to be a popular number, you know, unless someone is kind of forced out, unless they’re entirely burnt out. You know, often there could be an illness that pops up. There could be a family member for them or a family member, or there’s a bunch of layoffs at the company that they’re working at. And rather than looking for a job,

58 59 years old they just decided to retire So I am hoping the attitudes around that changes a little as many of you know I’m a big fan of working comfortably in retirement Which takes some planning, know, whether it’s consulting what whatever the case may be Just because people often will say I I’m willing to work to 70 or 67. Well something happens and they can’t

You know, it’s it’s unusual to see too many people retire in their in their mid mid early to mid fifties. Again, once you start getting late fifties to early sixties, you certainly see it. This is where planning can be valuable. Plan is not perfect. We’re guessing that the future. But if you can put some thought into what retirement looks like and what you might need or something that you could do to work comfortably in retirement, it’s

Mark Struthers (08:22.796)

The more planning you do, the more it’s going to be your choice and the more you’re going to have that healthier and wealthier retirement. Normally I would close on that, but I’m not going to here. So when you think about the 1 % to keep around this, these are the top savers. These are usually the top earners that they have this retirement. This is not meant to make you jealous or fearful, but it’s meant to encourage you to say, what do I need?

I don’t have, I’m 50 years old. don’t have $2 million saved, but what do I have? What do I need? It could be you have your home is maybe unusually high. Your home equity is unusually high for your age. could that be part of your financial plan or what do you need to get to where you want to be? And for some people, honestly, even though these are the top 1 % because of their spending or where they live, it’s not a lot of that I certainly have had 50 year olds.

that have $2 million saved and will save another half to three quarters of a million and maybe in home equity who given what they want to spend and what they want to do in retirement, it’s not enough. You know, if someone is spending 20, 30 grand a month in retirement, you’re probably going to need more than that $2 million. So it all depends as with anything else.

The part thing is, that you gather information and that’s why you’re tuned into this YouTube channel and that you try to make an informed, thoughtful decision. And if you do that, you’re going to have a healthier, a wealthier and a happier retirement. Stay well, everyone.