From Dennis Miller of Casey Research:
Who fares better in retirement, pensioners or folks who saved up their own respective nest eggs? If you look at the numbers, you might be surprised to learn who's really "living large" after retirement.
Regardless of how you made your money, what determines if you're rich when you retire? Frankly, it isn't how much money you made, but how much you accumulated that counts. So who are the real rich people?
Retirees generally fall into one of four groups: folks who retired from the private sector with a 401(k), IRA, or a lump sum payout in lieu of a private pension; those with a government pension; self-employed folks who saved their own respective nest eggs; and finally, those scraping by on Social Security alone.
The U.S. Census Bureau reports that in 2010 the top 10% had a median net worth of $1,864,000. If you're worth that much or more, 95% of the population thinks you're rich. But are you?
When my wife and I were first married, we had a negative net worth. No silver spoons for us! By our late 50s, we were successfully self-employed and in the top income tax bracket. And yet, once we paid federal and state income taxes, plus Social Security and Medicare, about 50% of our gross income went to taxes. We raised a family with what was left.
Once the children left the nest, we were in the race to the retirement finish line. For us, like most folks, that's when we really began to accumulate wealth for retirement.
Here was our challenge...
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