What ‘super wealthy’ in retirement looks like — how do your savings stack up to the top 1%, 5% and 10% of retirees?

Many of us dream of retiring wealthy. But how much is enough to be considered wealthy? And if you’re not there yet, is it possible to still retire in the top percentile of Americans? To be considered wealthy at age 65 or older, you need a household net worth of $3.2 million, according to finance expert Geoffrey Schmidt, CPA, who used data from the 2019 Survey of Consumer Finances (SCF) to determine the household net worth needed at age 65 or older to determine the various percentiles of wealth in the U.S. Schmidt argues that household net worth is more appropriate than individual net worth for this analysis, because household status is usually set by age 65. At this level of wealth, he says, you can worry less about day-to-day financial planning and start thinking about wealth planning. Here’s how to figure out where you fall on the ladder — and how you can pull yourself up a couple rungs, too.

Breaking down wealth demographics

According to the SCF report, it takes a net worth of $16.7 million or more for those over 65 to be considered super wealthy. People at this level “engage in just about anything they want to engage in,” says Schmidt. These are people who travel extensively, pursue esoteric interests and own expensive assets like wineries. But that represents just the top one percent of American retirees. Here’s how all the other categories are broken down, including the associated net worth for each category:

• Super wealthy (99th percentile): $16.7 million
• Wealthy (95th percentile): $3.2 million
• Well off (90th percentile): $1.9 million
• Middle class (50th percentile): $281,000
• Poor (20th percentile): $10,000
• Insolvent (less than the 20th percentile): $0

The people in the top categories were most often people who “saved early, saved often and saved a lot,” says Schmidt. And while they often had careers or businesses that made a lot of money, this wasn’t the case for everyone in the survey. Take for example finance personality Dave Ramsey’s National Study of Millionaires, which found that of all the millionaires Ramsey Solutions surveyed, the most common profession was teaching. Teachers, with a modest $61,690 average salary, are a perfect lesson in the powerful combination of resolve and consistency.

How to build wealth

So, how can you catch up if your net worth isn’t on track to make you “super wealthy” — or, at the very least, as wealthy as you’d like to be at age 65? (Without going back to teacher’s college a couple decades ago.) While it’s possible to build at least some wealth with the right mindset and discipline, there’s no one-size-fits-all solution for everyone. Taking control of your finances often starts by creating a budget, which can help you understand where your money is going and where you can cut back to increase your savings. There are several budgeting techniques, including incremental budgeting, zero-based budgeting and the 50-30-20 rule. But it’s important to find one that works for you, so it’s easier to stick with it. Cutting expenses can help you save, but if you want to build wealth you should also consider whether you can boost your income. That might mean taking courses to advance your career, looking for a better job, expanding your business or adding a side hustle.

Take care of your foundation

With some extra cash on hand, you can start building up your emergency fund. You’ll want to save at least $1,000, but many financial advisers recommend that an emergency fund cover three to six months of your expenses. This can help weather financial bumps in the road, without having to borrow money or tap into your retirement funds. You’ll also want to pay off your non-mortgage debt and make sure you’re contributing what you can to maximize any employer matching of your 401(k), if that’s something you’re fortunate enough to have through work. Even if matching only provides a small percentage of your contribution, it’s still as close as it gets to free money — and it can add a significant amount to your savings over time. Consider enlisting a professional financial planner to help you optimize your portfolio and decide which other accounts might be suitable—such as a Roth IRA — and how much you should be contributing to those. It takes a significant net worth to be considered super wealthy. If you’re not there yet, you may be able to catch up — by saving a lot, saving early, paying down your debt and optimizing your investments. You may not become “super wealthy,” but you’ll still build wealth. And that’s definitely super, regardless.