The recently released 2010 Survey of Consumer Finances data from the Federal Reserve Board has quantified what we knew to be true in the post-recession years: wealth levels have dropped, dramatically. The story of the average American family, however, like all averages, hides substantial variation in experiences. When we examine trends in net worth (total assets minus total debts) between 2001-2010 by family position in the income distribution, three different stories emerge. Continue reading
In her post “How old is old? Is 80 the new 65?”, Susan discussed how increases in longevity have dramatically increased the typical years lived post-retirement. The average 65-year-old retiree is now expected to survive until age 84. These changes mean that retirees need increasing amounts of money to afford a comfortable retirement and provide a cushion for emergencies over such a long period without employment.
How much do retirees need? Being able to retire at 65 is expensive even under the most conservative of estimates. Using the CNN Money retirement calculator, a 64-year-old earning $50,000 a year needs nearly $450,000 in savings to supplement Social Security and pay for their current standard of living for 19 years. While these needs may go down if they receive an employer pension, the costs will skyrocket if they face a medical crisis, require long-term care, or live longer than expected. In fact, some report that 65-year-old retirees need a minimum nest egg of more than $1 million.