Think you’re a ‘rich retiree?’ You might actually just be upper middle class — here’s the difference

While some retired Americans might consider themselves to be “rich,” in reality they could be lagging behind the top cohort of wealthy retirees. Here’s why the difference matters.

Wealth matters more than income

Once you’ve retired, income is likely no longer the best measure of wealth.

In fact, there’s a good chance many multi-millionaire retirees are drawing a modest income just to optimize their taxes. Meanwhile, some retirees might still be working part-time or freelance to cover the gap in their finances or tackle debt.

With this in mind, there are other ways for older Americans to compare their retirement finances with others in their age group. Net worth, for example, is arguably a much better measure, as a larger nest egg means you have plenty of money saved to live a lavish lifestyle, even if you don’t choose to do so.

The most reliable source of net worth data is the Federal Reserve's 2023 Survey of Consumer Finances (1), paired with DQYDJ's Net Worth Calculator, which sorts that data into percentile rankings by age (2). This is the freshest data we'll get until the Fed updates its numbers in 2026.

According to this data, individuals between the ages of 65 and 69 would need at least $2.96 million in total net worth to be in the top 10%. Those between the ages of 70 and 74 would need about $3 million.

Simply put, if you’re above the age of retirement and looking to get into the top 10% club, you’ll need at least a few million dollars, excluding the value of your primary home. That’s a lot higher than the $1.28 million the average American says they’ll need to retire comfortably, according to Schroders (3).

How to optimize your nest egg

If your nest egg is worth close to $1 million, you’re likely more in the upper middle class category of retirees as opposed to the rich. This distinction matters, as it means you likely have little room for financial errors and may have trouble affording certain luxuries.