Wondering if your nest egg stacks up with the average retiree? As we age, the idea of “middle class” starts to look a little different — especially in our 70s, when income often shifts from paychecks to pensions, savings and Social Security.
According to retirement-plan provider Fidelity Investments, people should have the equivalent of 10 times their income put aside by age 67 to have a comfortable retirement.
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“When you’re in your 70s, being ‘middle class’ isn’t just about how much income you bring in each month — it’s about whether your total financial picture allows you to live comfortably without worrying about running out of money,” Kevin Marshall, certified public accountant (CPA), tax and personal finance expert, and senior contributor at Amortization Calculator.
If you’re curious where you stand, here’s a look at the minimum net worth typically considered “middle class” for folks in their 70s.
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The Bottom Line: You Need $500,000 to $1.5 Million To Live Comfortably
According to Kevin Huffman, owner of Kriminil Trading, the amount of money you’ll need to sustain a middle-class lifestyle in your 70s in 2025 will vary significantly based on where you live, what your health costs look like and what kind of lifestyle you want to enjoy.
But as a rough guideline, he said we’re looking at something from $500,000 to $1.5 million for most retirees.
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That Presumes Homeownership (or Low Housing Costs), Medicare Coverage and Modest Discretionary Spending
Huffman noted that while someone in a mid-cost city such as Denver may need about $750,000 to cover just the basics: Healthcare premiums ($7,000 per year), groceries, utilities, and occasional trips. Those in high-cost areas, such as San Francisco, could end up needing $1.2 million or more, with inflated living expenses.
“The typical 70-year-old couple needs, at a minimum, $55,000 to $65,000 per year post-retirement, not including long-term care,” Huffman added.
But Net Worth Is Only Part of the Picture — Cash Flow Is Just as Important
According to Huffman, those in their 70s with $300,000 in savings following a mortgage payoff and who have Social Security/pension income of $40,000 per year can frequently manage to eke out a middle-class lifestyle without much suffering.
The trick, he explained, is to maintain enough liquid financial assets, in the low seven figures, while also ensuring you have a guaranteed income stream enough to outpace inflation.
Sound planning like downsizing or annuitizing part of your savings could stretch your net worth even further.
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This article originally appeared on GOBankingRates.com: Here’s the Minimum Net Worth To Be Considered Middle Class in Your 70s
