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Average Net Worth in Retirement | Age 65, 70, 75 - YouTube
Channel: Holy Schmidt!
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in this video i discuss the average net
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worth of retirees at age 65
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70 and 75 coming up next
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on holy schmidt holy schmidt
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most of the videos on youtube discuss
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finances
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net worth savings earnings
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for folks in their 40s 50s and even 60s
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not unsurprisingly
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these numbers have a tendency to go up
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the older someone gets
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any more that they earn and save
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during their lifetime this is the first
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video i've done
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in fact that i've seen here on youtube
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that discusses
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what happens to people's net worth after
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they enter
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retirement and it talks about what their
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net worth is at age 65
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age 70 and 8.75 it's an important video
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because
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there's not a lot of transparency out
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there on what happens to someone's
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finances once they enter
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retirement it's almost like a black box
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where the information just
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disappears which is a shame because for
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a lot of people
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they want to know what happens after
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they get into retirement
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and there just isn't a lot of
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information out there and that's why i
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created this video for you
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in this video i discuss the mean and the
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median
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net worth of people at 65 70 and 75
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and the outcomes are a lot different
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than you would expect
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before we begin please make sure you
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click subscribe and notifications
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there's a lot happening out there in the
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world and
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retirement for folks is changing daily
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sometimes in terms of the rules
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and the information and i work very hard
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to get what's happening out there
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in here for you when someone enters
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retirement the game changes
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they had just spent the last 30 or 40
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years contributing to their retirement
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nest egg
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and now they're actually drawing down on
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their retirement nest egg
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they're living off the return on their
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investments a pension
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social security perhaps even some
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part-time work
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it is this dynamic which causes a lot of
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concern for people in retirement
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because the message that they had
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received up until that point
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was about preparing for retirement not
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what to do next
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with the safety of full-time employment
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gone and
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the experience of living off of the
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returns from your retirement savings
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the road ahead is both exciting and a
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little bit stressful
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let's start off with age 65 because this
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is the next stop for a lot of you
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and of course you're naturally curious
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about those numbers first
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the data i'm going to use comes from the
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2020 survey of consumer finances from
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the federal reserve board
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so it's quite accurate the first number
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we're going to talk about is the mean
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which is just the average of all of the
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respondents that the federal reserve
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board talked to
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this data comes from both ends of the
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spectrum on the low end people that have
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more liabilities than they do assets
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this means that they're insolvent and at
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the high end people that have
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so many assets that they couldn't
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possibly spend their way through them
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during their lifetime
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and those are going to go to their
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family members when they pass
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at age 65 the mean net worth is 1
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million
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ninety six thousand eight hundred
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dollars now i can tell you right now
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that most of the people watching this
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video
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don't have that amount a better number
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is the median
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median simply means there are an equal
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number of respondents
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with a higher net worth and an equal
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number with a lower net worth
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so it's the person right in the middle
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that person has a
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net worth of 239 450
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so in other words less than one-fourth
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of the average net worth of the mean
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of that group what do you think the
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average net worth of a 70-year-old would
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be
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well if you ask most people they would
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think that the 70-year-old would have
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drawn
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down on their pensions their 401ks
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their savings etc and
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their net worth would have gone down
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interestingly that's not really the case
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though
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at age 70 the average net worth actually
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increases to one million
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two hundred seventeen thousand seven
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hundred dollars
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up one point seven percent the median
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goes up to two hundred sixty six
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thousand four hundred dollars
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in other words it goes up by 11 so why
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did both
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go up well there are a lot of theories
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but
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the one that's most likely is that
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people are calibrating
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during the first few years of retirement
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they're intentionally not
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spending as much as they could because
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they don't want to get it wrong
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so if that's the case you'd expect the
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next five years to actually go down
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and that's exactly what happens at age
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75
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the mean net worth goes down to 977
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thousand
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seven hundred dollars down 19.7 percent
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from the net worth at age 70.
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the median goes down to 254 thousand
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eight hundred dollars
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down four point four percent from age
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seventy
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so why does the mean net worth go faster
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downward from 70 to 75 than the median
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during both time periods there are a lot
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of reasons the most likely reason
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for the increase between 65 and 70 is
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that
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those retirees at that age at least at
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the high end
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most likely own their own businesses and
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aren't fully retired yet
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but by the time they hit 70 and they
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move towards 75
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not only are they out of the business
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but they're setting up trusts and
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arranging their lives so that their
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assets
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are moving into different pockets for
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their heirs if you like this video and
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you'd like to see more of me
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please make sure you click subscribe
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notifications so that you get alerted
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the next time i post a video
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i post about twice a week also check out
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this video on the average
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social security payment in this country
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this is jeff schmidt
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thanks for watching
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