The Federal Reserve Board issued a survey with details about the net worth across the nation. For the average household, the net worth reached just over $120,000.
For individuals at retirement age, or people in their late 60s and early 70s, the median net worth was more than double than the overall household median at $266,400. Overall, people in their retirement years have an average net worth of $1.2 million.
Net worth is the value of an individual’s assets subtracted by debt. Assets include bank balances, savings accounts, government bonds, health savings accounts, investment accounts, annuities, real estate and vehicles, among others. Debt will include mortgage, credit accounts and other loan payments. So, you can calculate your net worth by subtracting your liabilities from your assets.
The survey also shed light on the challenges of saving for retirement. Many young workers don’t think much about their net worth. They are more concerned about paying their bills, saving some money and one day owning a home.
So, how much money should people near retirement age have saved up? According to Fidelity, the ideal is saving 10 times their income before the age of 67. Based on today’s dollar, people should be looking to save about $500,000.
As you plan for retirement, remember you have some options to explore. Retirees over the age of 62 can turn to a home equity conversion mortgage to increase their financial resources and flexibility.
Retirees can boost their retirement income and eliminate their mortgage under this program. And they can do so without having to move or sell the home. You can retain the option to sell the home or pass remaining equity onto heirs.
To learn more about how you can navigate today’s financial realities as you plan ahead, please contact us to learn more about how a home equity conversion loan can work for you.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax deductible until the borrower makes partial or full repayment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.