What percentage of American retirees do you think retire with at least a million dollars? (Equating to a retirement of $40k/year) It's around 10 percent. How are the other 90 percent surviving?

LTC facilities on Medicaid?

Social security goes a long way for most retirees. Many sell their homes and downsize and/or move to warmer climates. Many need to work longer than they would like to.

Following this thread…

@mysterious-tomato-10057 What defines a retiree in the dataset?

Retirees may pay virtually no taxes and don't have to earn money at the highest marginal tax bracket to save for retirement. • 401k / Traditional IRA is taxed at marginal rates after the standard deduction and there's no FICA taxes • Medicaid and Medicare • Social security • Often paid off home or downsize • No kids and tuition • Smaller car(s) (often paid off) The average social security payment with maximum payout (age 70 retirement) is $2200 per month. For a couple that's $4400 which is waaaay more than most people need (assuming they no longer have the above large expenses) unless they need assisted living

so why are we saving so much money for retirement? 🤔

Depends what you want to do in retirement. Fly to your kids multiple times a year? Do some vacations? Live in a house big enough to host your kids? Retire early (@mysterious-tomato-10057 in a productive way obviously 😎) Not be on Medicaid?

This is also why I make two plans at least for each family, one that includes and one that doesn't include social security, so they can see what they need to do if they don't plan on relying on it continuing to exist.

At most, Social security benefits will be cut by 20% but even that is unlikely since congress will probably step in (and raise taxes) so that it's not reduced at all.

Idk if you can say that. Someone who is 20 and making a financial plan is over 40 years away from collecting social security, and a lot can change in 40 years.

True and the same can be said about many things. But to plan for Social Security disappearing entirely seems a bit extreme.

It's unlikely that social security will disappear. Even raising retirement age when people are living 10-20 years longer on average is political suicide

I'm not advocating to plan for social security disappearing. I'm advocating for making an informed decision, planning for multiple possibilities, and being intentional. Each person should make their own decision on if they want to include social security in their financial plan and I see reasons for both.

Are you including pension plans? That's something current retirees may have, but not future retirees. 401k plans currently run on the assumption you need to save more for yourself rather than having your work continue to pay you after retirement. So if you're asking about how many current retirees have significant 401k's, that's not accounting for their pensions and the changing landscape requiring self generated funds for future retirees, and therefore younger workers should hopefully have larger 401ks than current retirees. Some retirees also have investment properties that are paid off and therefore continued income during retirement in lieu of a 401k.

@bumpy-minister-26192 pension plans were definitely something I was thinking about, but those are less and less common.