Here’s How Much You Need to Retire Upper Class, and How to Get There
A light at the end of the tunnel. You’ve worked hard to get there. The question is, how bright is that light going to shine? For some it doesn’t matter, they’ll do with most any level of retirement as long as they can stop working and live comfortably. For others, they want to maintain the lifestyle they had while they were earning. If this is you, start preparing now.
FROM INC MAGAZINE / BY AVA LEVINSON
Expert Chris Walker says it’s all about structured preparation.
The minimum net worth required to be considered upper class at age 66 in the U.S. is from $1.5 million to $2 million. That range comes from Chris Walker, founder and certified financial planner of marketing and outsourcing platform Legiit.
“This figure reflects not just accumulated savings but also home equity, retirement accounts, and investment portfolios,” Walker told GOBankingRates.
Upper-class retirees in the U.S. are within the top 75 percent to 90 percent of all income earners, according to GOBankingRates. But it’s not just luck that gets people there. Instead, it takes approaching preparation as a structured strategy rather than separate, one-off decisions.
Retirement Prep
Walker said that to achieve the life you want after retiring, “the most actionable steps are to start early, automate savings, and use tools that clarify financial decisions.”
Setting yourself up for your goals early on means being purposeful about saving and investing, and being strategic with tax advantaged retirement accounts like 401(k) plans and IRAs.
“Real estate ownership remains a cornerstone of wealth building, but it should be paired with equities and fixed income to withstand market cycles,” Walker said.
Warren Buffett, renowned investor and former CEO of Berkshire Hathaway, has repeatedly emphasized the value of holding investments over time.
“In my view, for most people, the best thing to do is to own the S&P 500 index fund,” he said at the 2021 annual meeting of Berkshire Hathaway shareholders.
Achieving the Desired Lifestyle
Of course, being part of the upper class isn’t the only way to enjoy retirement, and the numbers are just a benchmark. What matters is being able to live independently and without financial stressors.
“At 66, someone in the upper class bracket would typically have a financial situation that allows them to live comfortably without relying on Social Security as their primary income,” Walker said.
Shark Tank investor Kevin O’Leary said preparation for retirement should also involve learning how to live on less.
“The best antidote to panic is realism,” he previously told TheStreet. “If you’re healthy and happy, being old is cheap. Walking, working part time, and living a life of purpose and meaning don’t require a lot of money, just planning and discipline.”