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Can you guess how many people retire with a $5 million nest egg?

Can you guess how many people retire with a $5 million nest egg?

When it comes to retirement savings, only a select few people in the United States reach the $5 million savings milestone.

Data from the Employee Benefit Research Institute, based on the Federal Reserve’s Survey of Consumer Finances, shows that only 0.1% of retirees manage to accumulate more than $5 million in their retirement accounts, while only 3.2% collects more than $1 million.

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A look at those with some $5 million in savings, as reported by the Wall Street Journal, shows that such retirees often did not expect to reach such financial heights. They were consistent in their savings efforts from the beginning of their careers, but their lifestyle remained modest. Many continue to work part-time, forego the frequent purchase of new clothes, and although they spend money on global travel, they share the same health and family concerns as other older Americans.

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Meanwhile, Northwestern Mutual’s research indicates that Americans believe they need about $1.46 million to retire comfortably. Yet the average retirement savings account balance paints a grimmer picture, at just $87,000, according to the latest figures from the Federal Reserve’s Survey of Consumer Finances. Here’s how these numbers break down by age group:

—Under 35: $18,880

–35-44: $45,000

–45-54: $115,000

–55-64: $185,000

–65-74: $200,000

–75 or older: $130,000

While the average balance for all families is higher at $333,940, this figure is pushed higher by the wealthiest households. In addition to retirement accounts, many retirees also have significant amounts of money in regular savings accounts, investment accounts and real estate investments.

The equity in a retiree’s home also contributes significantly to his financial security. In 2021, home equity represented an average of 45% of the total wealth of U.S. homeowners, indicating that a significant portion of the average person’s wealth comes from their primary residence.

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The picture of the financial health of American retirees is therefore more nuanced than it seems. Financial planners recommend considering all assets and net worth to fully assess retirement readiness, rather than focusing solely on retirement account balances.

Although a $5 million nest egg is rare, achieving a comfortable retirement is still within reach. In consultation with a financial advisor, you can develop a customized plan to achieve your retirement goals, based on your financial situation and lifestyle ambitions. A financial advisor can provide valuable insights and strategies to help you maximize your savings and ensure financial security for your retirement years.

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*This information is not financial advice and personal guidance from a financial advisor is recommended to make informed decisions.

Jeannine Mancini has written about personal finance and investing for the past thirteen years in various publications, including Zacks, The Nest, and eHow. She is not a qualified financial advisor and the contents of this document are for informational purposes only and do not and do not constitute investment advice or any investment service. Although Mancini believes that the information contained herein is reliable and from reliable sources, no representation, warranty or undertaking, express or implied, is made as to the accuracy or completeness of the information.

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This article Can you guess how many people retire with a $5 million nest egg? originally appeared on Benzinga.com

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