1. Minimal debt
It's not unusual for people to carry some debt in retirement. According to Forbes, citing data from Experian, baby boomers carry about 72% of the amount of credit card debt members of Gen X do on average, while members of the silent generation have 37% as much as Gen X. Money that isn’t being spent on debt can be used for a variety of purposes, from paying bills to investing.
Further research from Experian found that credit scores tend to rise with age, with baby boomers having an average credit score of 745 as of 2023, while members of the silent generation averaged a score of 760. Both scored well above the overall average of 715. A higher credit score tends to mean that when debt is in the picture, it's less expensive, since creditworthy borrowers often get lower interest rates.
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Get Started2. Home ownership
In 1994, the median sales price of a U.S. house was around $130,000, according to the Federal Reserve Bank of St. Louis. As of the second quarter of 2024, it's $412,300.
A Vanguard report from 2023 says that about 80% of Americans aged 60 or older are homeowners, and many have a fair share of equity in them.
Home equity is factored into net worth and can be borrowed against via a loan or line of credit. Vanguard also states that, among retirees who relocate, about 60% move someplace less expensive and typically unlock about $100,000 of equity in the process.
3. Assets that continue to grow
Many retirees kick off their golden years with a nice chunk of savings. In fact, the average retirement savings account balance among Americans aged 65 to 74 was about $609,000 as of 2022, according to the Federal Reserve.
But it’s not just that retirees have money to begin with. Many own assets that continue to gain value during retirement, including homes and investment portfolios. Even safer assets like certificates of deposit can continue to generate income.
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Learn More4. Multiple income streams
It’s not uncommon for retirees to have multiple income streams. These could include a pension, Social Security and savings.
The average monthly Social Security check for retired workers as of August was $1,920, according to the Social Security Administration. If you factor in withdrawals from savings based on the average $609,000 balance above, the income looks much brighter. Using the popular 4% rule, a balance that size can add a little over $2,000 of monthly income.
But these figures are just averages. Retirees with higher Social Security paychecks and larger nest eggs may be covering their expenses without breaking a sweat.
5. Able to support adult children
A report from Savings.com found that 47% of parents with grown children provide them with financial support. Among parents providing support, 21% are helping millennial or Gen X children.
Seeing as how Gen X are now in their 40s and 50s, it's fair to assume that a good number of retirees are still helping their children cover some expenses. And if they're in a position to do so, it means they may be wealthier than they realize.
Your financial picture in retirement may be better than expected
You may have your doubts about your ability to support yourself in retirement, no matter how many assets you hold or how much savings you have. That’s why it can pay to sit down with a financial adviser and discuss your concerns.
A professional can help you figure out what retirement expenses you can afford to take on based on your financial situation. They might also help you come to the realization that you’re in a better position to retire than you thought you were.
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