Surprising Net Worth Number

[grumpy]

Jonathan Clements has an article in today WSJ with the following statistic:

Don't get me wrong: I am not claiming $1 million isn't a huge sum.

Indeed, it's beyond the wildest dreams of most Americans. Take households headed by someone 55 to 64 years old, which is America's wealthiest age group. Even for these folks, who are on the cusp of retirement, the median household net worth -- including home equity -- is under $250,000, according to the Federal Reserve's 2004 Survey of Consumer Finances.


No wonder we retirees are in the minority!



Grumpy

 

[Sam]

Yeah, but 1MM net worth (at age 55 - 64) is most likely laughable on this board.

 

[cute fuzzy bunny]

Last time I looked at the numbers it was worse than that...there werent many people in "the median". Lots of people with under $25k and a bunch with a lot of money.

Seems you either "get it" or you dont.

 

[roadkill]

Jonathan Clements has an article in today WSJ with the following statistic:

Don't get me wrong: I am not claiming $1 million isn't a huge sum.

Indeed, it's beyond the wildest dreams of most Americans. Take households headed by someone 55 to 64 years old, which is America's wealthiest age group. Even for these folks, who are on the cusp of retirement, the median household net worth -- including home equity -- is under $250,000, according to the Federal Reserve's 2004 Survey of Consumer Finances.


No wonder we retirees are in the minority!



Grumpy

I wonder what the net worth number would be without home equity. Me thinks that once home equity is factored out, it gets really scary.

 

[haha]

Likely this does not include defined benefit pensions. Plenty of people in this age group are doing fine- they buy $400,000 to million $+ homes. What pays the mortgage is mostly pensions. A surprising number of them are government pensions.

Ha

 

[cute fuzzy bunny]

Except for the very lowest income levels, where home equity is zero or close to it, it ranges from 30-60%.

For a pretty large segment of the population, building home equity as a store of value as a forced savings plan IS their retirement plan. I guess it helps that shelter is a necessary expense in the first place.

 

[MasterBlaster]

Well if we elect Hilary then you can share more of your prosperity. She has made quite the stump speech lately talking about shared prosperity and how we are all in this together.

Quoting her...

“Fairness doesn’t just happen. It requires the right government policies.”

 

[bssc]

I saw this article on why you need $500 in the bank. I guess that we really are in the minority.

 

[HFWR]

I saw this article on why you need $500 in the bank. I guess that we really are in the minority.

Well, I happen to know the REAL number is $503.78...

 

[dex]

Yeah, but 1MM net worth (at age 55 - 64) is most likely laughable on this board.

I agree and from what I see in the USA the numbers quoted don't seem right to me.

HaHa also has a great point.

A couple of other things to remember. Most journalist don't know how to do financial analysis and the article needs a fear factor to get any interest.

I would really like to see an article that attempts to point out all the wealth in this country.

 

[lazygood4nothinbum]

not meant as a personal attack but just to add some humility to this thread: some people are forced into debt through no fault of their own while others never had the luck or the mental capacity to accumulate much wealth so i wouldn't be so quick to laugh, and certainly not at a million bucks.

 

[maddythebeagle]

I heard that the GAO had its own study and showed people were doing better than these articles point out....Also, I think what is missed in these is that folks with a lower income rate will simply have a decent amount of social security replace their income....if you make and live off of 20k while working, social security isnt bad...

Also, this discussion is similar to all of the threads "Can I retire on 1 million"....some here would scoff at the idea of living on 30-40k/yr while others would consider it pretty damn good...

 

[OAG]

I could live on $80K a year but choose to live on no more than $30K a year. So I guess I would be classified as VERY LOW INCOME. When are these journalists ever going to get the FACT that it is EXPENSES that drive the train NOT INCOME.

 

[haha]

I could live on $80K a year but choose to live on no more than $30K a year. So I guess I would be classified as VERY LOW INCOME. When are these journalists ever going to get the FACT that it is EXPENSES that drive the train NOT INCOME.

Print journalists aren’t stupid. A financial journalist is like a health writer, she must write to her audience. That audience has a short attention span, and at best they are reading to confirm whatever bias they already have in place, or stoke a lingering fear, or whatever. What they are not doing is trying to understand unfamiliar concepts.

Ha

 

[Martha]

Clements writes for the WSJ. I'll bet many readers have a high income but not big savings. Saying a million dollars ain't what it used to be is relevant to that audience, who may expect to spend $100,000 a year.

 

[dumpster56]

But if you and your wife worked for 30+ years and will both be gettin SS of about 25K combined would that not average about 1 million with the 250 average?

 

[Arc]

Well if we elect Hilary then you can share more of your prosperity. She has made quite the stump speech lately talking about shared prosperity and how we are all in this together.

Quoting her...

“Fairness doesn’t just happen. It requires the right government policies.”

The Goddess of Fairness speaks. Do you really need to know anything more about Hillary?

 

[cute fuzzy bunny]

hey ha...sounds like hairballs!

Hillary?

 

[Arc]

Tried to attach my first picture file. Hope it worked.

 

[macdaddy]

well

This doesn't take into account couples with pensions... 2 teachers or 2 federal employees or other public sector type employees... 2 pensions + SS = $100k/year in retirement pretty easily. Even 1 30+ year state/federal pension + SS = $70k/year.

How many millions of people have state and federal pensions?

I have an aunt and uncle who both work for the state in California. They live an upper-middle class lifestyle. They probably have less than $250k in assets. They spend whatever they make ($120k/year). No investment accounts or retirement accounts. But when they retire their pensions will be $120k/year and I think they just plan to spend, spend, spend forever.

 

[haha]

How many millions of people have state and federal pensions?

I have an aunt and uncle who both work for the state in California. They live an upper-middle class lifestyle. They probably have less than $250k in assets. They spend whatever they make ($120k/year). No investment accounts or retirement accounts. But when they retire their pensions will be $120k/year and I think they just plan to spend, spend, spend forever.

Pretty nice life. The taxpayers are crazy to go along with this. People who are on the receiving end have many self-serving justifications, but it really amounts to I've got mine, be gone stupid taxpayer! The common argument that they don't make as much while they are working so they deserve more in retirement is total hogwash. Except for a few with truly executive positions most could be replaced easily with a 20% pay cut and a garden variety 401K.

Except of course the public servants on this board, who would all be grandfathered in my scheme. Hell, we could even afford to give those dudes and dudettes a raise.

Ha

 

[ERD50]

Quoting her...

“Fairness doesn’t just happen. It requires the right government policies.”

I would say to her: “Net Worth doesn’t just happen. It requires the right personal policies.”


I know, there are exceptions....


-ERD50

 

[MasterBlaster]

Pretty nice life. The taxpayers are crazy to go along with this. People who are on the receiving end have many self-serving justifications, but it really amounts to I've got mine, be gone stupid taxpayer! The common argument that they don't make as much while they are working so they deserve more in retirement is total hogwash. Except for a few with truly executive positions most could be replaced easily with a 20% pay cut and a garden variety 401K.

Except of course the public servants on this board, who would all be grandfathered in my scheme. Hell, we could even afford to give those dudes and dudettes a raise.

Ha

I'd have to agree with you it doesn't seem fair, however it was pointed out that we may want to pay the public employees well. Otherwise you get (more) corruption and situations like they have in Mexico where police use their official power to shake down people they deem to be "rich".

It just may be less expensive to give the government employees a sweet deal.

Per the crazy taxpayers in California being crazy to go along with these sweet public pensions. It's the same old story... The unions give money to the liberals so that they can be re-elected. The liberals then give the unions a sweet package (Quid Pro Quo). When the schools or the poor need additional resources, cutting that sweet govenment-employee package is off the table. The public isn't paying attention so the party goes on.

 

[dex]

I'd have to agree with you it doesn't seem fair, however it was pointed out that we may want to pay the public employees well. Otherwise you get (more) corruption and situations like they have in Mexico where police use their official power to shake down people they deem to be "rich".

It just may be less expensive to give the government employees a sweet deal.

Very nice point. Our public services in the USA are plentiful and very good. In some other countries the citizen needs to deal with curruption, indifference, and delays.

Having said that I also believe in anti curruption departments and laws. In Hong Kong there is a full time unit with the sole job of finding currupt officials throughout government. In the USA I don't think there are dedicated units. It just gets discovered in the course of other investigations. Of course police departments have Internal affairs.

 

[grumpy]

Pretty nice life. The taxpayers are crazy to go along with this. People who are on the receiving end have many self-serving justifications, but it really amounts to I've got mine, be gone stupid taxpayer! The common argument that they don't make as much while they are working so they deserve more in retirement is total hogwash. Except for a few with truly executive positions most could be replaced easily with a 20% pay cut and a garden variety 401K.

Except of course the public servants on this board, who would all be grandfathered in my scheme. Hell, we could even afford to give those dudes and dudettes a raise.

Ha

Ha,

So why didn't you chose a gov't career if the pension deal is so sweet? I think it is unfair for you to criticize those who had the foresight and fortitude to chose and stay with a gov't career and collect a good pension. In my case, I went to work for Uncle Sam in 1969, at the height of the Viet Nam war protests. Most of my contemporaries were trying to tear down the government, not go to work for it. Without the inducement of a secure job and good pension I would not have made that choice. Sounds like sour grapes to me.

Grumpy (federal annuitant)