Dear Bernard,,

Have you ever heard of the 6 levels of wealth for retirement-age Americans? No? Don't feel bad, I had not either until a couple weeks ago.

However, according to Moneywise.com, in an online article published by Yahoo Finance, there are six categories Americans fall into when they reach retirement. Keep in mind, these number are representative. So many factors come in to play with your specific situation. But like most generalizations, there is some inclination of fact involved.

This also reminds me of the campaign run by Voya a number of years ago: "What is your number?"

With the idea that these are not specific to your situation, here are the six levels of wealth for senior-led households between the ages of 65 and 69, based on the Federal Reserve’s Survey of Consumer Finances from 2022 as published by Moneywise:

1) Financially Vulnerable (Household net worth $69,500 and under): Seniors with a net worth of $69,500 or less make up 25% of retirees and fall into the bottom category. This group is highly dependent of public programs and is in a poor position to absorb financial shocks to their household.

2) Lower Middle Class (Household net worth between $69,500 and $394,300): Around 50% of senior households fall into this group. Much less vulnerable than those in the first category, retirement could still be a struggle at this level. Budgets need to be monitored and costs controlled. Inflation can have a significant impact on this group keeping up with the cost of living.

3) Solidly in the middle class (Household net worth between $69,500 and $394,300): Middle class can allow you a more comfortable retirement. Costs are still a concern, but this class has room to absorb financial shocks and take advantage of opportunities. However, if your assets are trapped in long-term or illiquid investments, creating cash flow or liquid access can be a priority.

4) Upper Middle Class (Household net worth between $1.2 million and $2.9 million): Like the middle class, retirement can be low on stress depending on expenses and cash flow. Tax considerations may be more of a concern than those in the first 3 classes. Expense creep can also be an issue. While many accomplished this class with high wages and smart investments during working years, the loss of current income and continuing to spend as if your income would continue may deplete assets sooner than expected.

5) Affluent Class (Household net worth $2.9 million or more): This level of affluent retirees are usually former bankers, lawyers, C-suite executives or business owners who are accustomed to a lavish and financially free lifestyle. This group also has some of the same issues as upper middle class, but may be seen more as the country club group. To continue their pre-retirement lifestyle hig levels of savings may be required or the sale of an asset such as a business.

6) Top 1% (Household net worth $21.7 million or more): Only the top 1% in this bracket have a net worth over $21.7 million. This is the ultra-wealthy group that most Americans can only dream of belonging to. Those in this class have a retirement plan that probably looks a little unconventional. They may be less focused on budgeting and more focused on asset allocation, tax optimization and estate planning.

From our view, any of the six categories deserve a quality and well deserved retirement. Retirement should not mean you have to change your lifestyle, change your friends, or change your address. We believe proper planning can help you take advantage of savings and investment programs to help you enjoy your golden years.

If you would like to discuss or review your retirement planning give us a call, or schedule a visit via the link to the left. We would be happy to discuss options with you and provide leadership.

As always, thank you for reading and have a wonderful Independence Day weekend.

Bernie & Chad