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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Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.
Easy Tax Relief could help you lower or get out of your tax debt for good. They’re well respected in the industry and have been recognized for their ethical standards when dealing with tax debt. While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.
Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.
You don’t have a mortgage
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
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
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
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
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
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
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
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
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
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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