9 Signs You’re Doing Better Financially Than the Average Retiree

NEWS & TRENDING - MONEY NEWS
Are you keeping up with the Joneses during retirement? Let's find out.
Updated May 8, 2024
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If you know any retirees, you probably see them posting photos of cruise vacations or bucket-list adventures. As at any age, you may be wondering how you measure up to others in your phase of life.

Retirement may have impacted how you spend your time and money, so you might be unfamiliar with how to gauge your current financial standing compared to your peers. But where you stand financially may be better than you think. 

Here are some signs that you’re doing better financially than the average retiree.

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You don’t have a mortgage

Watchara/Adobe business investment of real estate

Of those 64 and older, 40% still have a mortgage. This might be a conscious choice for some due to record-low interest rates for many years. However, housing costs are generally one of the biggest expenses for households each month.

If you are mortgage-free, you can spend that cash on something else, save it, or invest it.

You owe less than $175,670 on your home

Jelena Stanojkovic/Adobe man with paperwork

Even if you carry a mortgage, there’s still a chance you’re doing better than the average retiree. The average mortgage for people aged 65-74 is $175,670. That number is well below the average home price of $495,100, which should give you some confidence when you sell.

If your mortgage interest rate is between 2% and 3%, it might not make sense to spend $175,000 to pay it off. Instead, you can invest that money and make a higher return.

You have more than $200,000 saved for retirement

Dragana Gordic/Adobe man worried about finance safety

The median retirement savings of those between 65-74 is $200,000. While the average amount is higher, at $426,000 saved, the median provides a better figure for comparison. If you’ve got more than $200,000 saved for retirement, you are doing better than the average retiree.

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You have less than $7,720 in credit card debt

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The average retiree between the ages of 65 and 74 holds $7,720 in credit card debt. For those over 75, that number drops by almost half, down to $3,990.

Credit card debt has reached an all-time high, so if you owe less than that, you are sitting in a good financial position.

You owe less than $23,690 in car loans

shannonbray/Adobe dollar bills

While less than 25% of retirees over 65 actually have car loans, the average loan amount is in the five figures. The number for loans and loan amounts drops after age 75, but according to AARP, that’s when many retirees give up driving, which makes sense. You don’t need a car if you’re not driving.

Your retirement income is more than $50,290

Alex/Adobe woman with glasses holding money

The median income for Americans 65 and older is $50,290. Retirement income is an umbrella term that includes all streams of income: Social Security payments, pension payments, retirement account withdrawals, investments, and any ongoing work.

If you’re bringing in more than $50k per year from all your income streams during retirement, you can be confident you’re doing better than the average retiree.

Your Social Security is more than $1,907

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The average Social Security retirement benefit is $1,907 per month as of January 2024. Social Security is calculated by averaging a worker’s monthly income over 35 years. However, a person who retires at full retirement age in 2024 will receive a top benefit of $3,822.

If your payment each month is the max, you’re doing better than the average.

You have less than $13,800 in medical debt

spyrakot/Adobe stethoscope on the dollars

The average medical debt for those ages 65-74 is $13,800. Even though the majority of retirees are covered by insurance, bills can still go unpaid.

An AARP survey showed three out of four people felt stressed about their debt. There is also a link between the stress of medical debt and shortened life expectancy. If you’re carrying less than the average amount of medical debt, you can rest easy.

You spend less than $4,870 per month

Suriyawut/Adobe woman calculating annual tax

The five biggest household spending categories are usually the house, transportation, food, utilities, and health care. Beyond those big five, there are still things like travel, leisure, and entertainment to budget for.

Data show that younger retirees spend more money than those over 75, but that could be due to better health and mobility in younger years. If your monthly cost of living is below $4,870, you’re probably doing just fine.

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Bottom line

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These averages can help you gauge your financial standing compared to your retired peers. 

In addition to the numbers above, where you choose to retire can also have a large impact on your cost of living and how well you feel you’re doing financially. A $55,000 retirement salary will feel a lot different in Mississippi than it will in California.

Regardless of where you live, you want to avoid wasting money when you could reduce some expenses. And as you age, remember that your healthcare costs are likely to increase.

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Author Details

Holly Humbert Holly is a writer who recognizes that there isn't a one-size-fits-all approach to personal finance. She is passionate about entrepreneurship, women in business, and financial literacy. With more than four years of experience, her work has been featured on MarketWatch and The Ways to Wealth.

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