You Might Be A 'Lower-Class' Retiree If Your Net Worth Is Below This Number

While no one ever wants to be referred to as "lower class," having a realistic grasp of your finances is the first step to fixing it — or at least, making the best out of it. For retirement, it's even more important because this is a time in your life where you won't have as much room for risks, nor would you have many career opportunities to fall back on. Therefore, it's all the more crucial to know where you stand and plan accordingly.

In 2023, the Federal Reserve published the Survey of Consumer Finances (SCF) that revealed that the median net worth for families headed by people aged from 65 to 74 is $409,900, and $335,600 for those over 75. Retirees with less than $10,000 in net worth sit near or at the bottom 25%, which could translate to "lower class" in some contexts. If your net worth as a retiree is below $10,000, then it's safe to assume that you're not a homeowner. Sadly, going by the 2023 SCF, even at $9,999, you're still below the median net worth for renters, which is $10,400. According to the Federal Reserve Economic Data (FRED), healthcare alone costs over $8,000 for people over 65. Essentially, those in the bottom percentile barely have enough assets for a meaningful buffer, and if you have no other sources of income, you'll probably have to move to a city where you can live comfortably off only Social Security checks.

A $10,000-retirement net worth indicates that you don't have any major investments to generate significant returns. That means your main source of income would likely be Social Security or a job. If you can still work, and you're under the full retirement age (FRA) — which is 66 or 67 for most people — it would be best to delay retiring until you're 70. Doing this will increase how much you'll get through Social Security benefits by up to 8% each year it's delayed, leaving you with up to 24% more than if you retired at FRA, according to the Social Security Administration. This comes with the added benefit that working a job will give you more time to save and improve your net worth.

There are also government programs designed to assist low-wealth retirees. If you're over 65 with less than a $10,000-net worth, you would likely qualify for Supplemental Security Income (SSI), which scales depending on how little you have in income and resources. If your net worth is really less than $10,000, you should qualify for Social Security SSI even with a home (if you live in it) and a car (one per household), because those things don't count toward what the Social Security Administration sees as "resources." When you combine these assistance programs with Medicare and its "Extra Help" option, you could save even more money on healthcare and prescription medication. But you should still keep some out-of-pocket money for the medical costs Medicare won't cover.