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Regarding retirement savings, we all hear about the elusive “top 3%.” But how much does it take to get there? Turns out, the number might surprise you.
According to data from the Federal Reserve and the Employee Benefit Research Institute, just 3.2% of retirees have saved over $1 million. That’s not chump change, but it’s also not the $5-$10 million range some financial gurus – like Suze Orman – insist you must live comfortably. If you’re dreaming of $3 million or more, though, you’re officially aiming for a financial VIP club that represents less than 1% of retirees.
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The Numbers Speak Volumes
For context, the average American household’s net worth (including home equity, investments and other assets) is about $1.06 million. But here’s the kicker: The median net worth – the point where half of households fall below – is much lower. Translation? Most people don’t even hit millionaire status. And for those that do, most don’t feel it. In fact, A Northwestern Mutual study found that only one-third of millionaires classify themselves as “wealthy.”
Now, if you’re eyeing $4 million or more, you’re stepping into truly rarified air. Less than 0.1% of retirees hit the $5 million+ range, so $4 million likely represents an even smaller slice.
See Also: It’s no wonder Jeff Bezos holds over $70 million in art — this alternative asset has outpaced the S&P 500 since 1995, delivering an average annual return of 11.4%. Here’s how everyday investors are getting started.
Why Do So Few Make It?
Reaching these numbers isn’t just about luck or earning a six-figure salary. It requires discipline, strategy, and patience.
Here’s what the financial elite are doing differently:
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They Start Early: The magic of compound interest isn’t just a cliché; it’s a game-changer.
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They’re Consistent: Regular contributions, even when the market dips, add up over time.
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They Diversify: A well-balanced portfolio can protect against downturns and capitalize on growth.
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They Live Below Their Means: Fancy cars and oversized houses might look good now, but they eat away at future wealth.
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They Avoid Debt: Interest payments are the enemy of savings.
Trending: Can you guess how many retire with a $5,000,000 nest egg? The percentage may shock you.
Is $1 Million Enough?
Here’s where it gets tricky. While $1 million puts you in the top tier of retirees, how much you need depends on your lifestyle, location, and goals. Someone living in a high-cost city like New York might find that $1 million doesn’t stretch as far as it would in rural Montana.
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