There are 3 characteristics that all rich retirees share.

The Retirement Security Research Center of the Employee Benefit Research Institute split 2,000 retirees into five groups in a new report: average, comfortable, struggling, ‘just getting by,’ and affluent. The survey only looked at households with less than $1 million in assets and were retired persons aged 62 to 75.

The study identified key financial achievements that may be more difficult for some people than others depending on a variety of factors, including debt and income levels over your working life, any generational wealth, and living prices across the US. The qualities that members of this group shared, on the other hand, are consistent with common financial goals for many Americans who aspire to retire one day.

Here’s what the affluent group accomplished, and how you may apply these strategies to your own retirement strategy.

1. They were able to pay off their mortgages.

The affluent were largely homeowners who had paid off their mortgages, according to the survey.

Paying off your mortgage will lower your monthly expenses and allow you to stretch your retirement resources farther. Keeping up with your home’s bills in retirement will be considerably easier when you’re simply responsible for property taxes and maintenance.

Consider how much time you have left on your mortgage and how much more your money could make if it were invested before you retire if you decide to pay off your mortgage. Consider non-financial factors as well: if it would make you feel more comfortable in retirement and you can afford it, it would be a wise decision.

2. They have no consumer debt.

Credit card debt and auto loan debt, two popular categories of consumer debt, were shown to be the least common among wealthy retirees in this study. Only one out of every five wealthy retirees had auto loan and credit card debt, according to EBRI study. That’s much less than the average retiree, who had credit card debt and a car loan around half of the time.

Not having consumer debt can make a significant impact in your retirement planning, since it not only reduces the amount you’ll need to spend each month, but it also allows you to stretch your resources longer.

If paying off credit card and auto loan debt sounds like a good idea, start by calculating how much time you have left before retiring. If you still have a few years, a debt snowball or debt avalanche strategy, which prioritizes debts by size or interest rate, can assist you in paying it off rapidly.

3. They have almost $320,000 in savings.

The affluent category of retirees at EBRI had more than $320,000 saved for retirement, but your needs may be substantially different.

According to Personal Capital, the average 60-year-old has around $642,000 in savings. According to Tanza Loudenback of Insider, the average retiree would require around $1.6 million to live on $65,000 per year in retirement.

Because it depends on your lifestyle and how you plan to receive income in retirement, there is no predetermined amount you’ll need. However, there are methods for calculating your unique figure.

The 4 percent rule, which implies you’ll withdraw 4% of your savings each year in retirement, is one of the most common techniques. To figure out how much you’ll need based on this rule, multiply your desired annual income by 25 (the average number of years you’ll be retired). The outcome is a reasonable estimate of how much money you’ll need to retire comfortably.


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