If you've spent the past few decades quietly maxing out your 401(k), paying off your home, and skipping the flashy cars in favor of financial security, you might be wondering: Did it all add up to enough? For many people in their late 50s or 60s, there's a lingering question that never really goes away—Am I actually in the top tier of retirees?
The million-dollar benchmark still carries a certain weight. But how rare is it, really? According to the latest Federal Reserve Survey of Consumer Finances, retiring with $1 million puts you well ahead of the pack. In fact, only about 3.2% of retirees have more than $1 million saved in retirement accounts. Fewer than 1 in 1,000 reach $5 million or more.
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And while headlines often focus on extreme wealth or early retirement stories, the actual retirement landscape is more sobering. Empower data analysis shows the average 401(k) balances for people in their 60s hover around $574,000, with the median at $186,902. That means half of retirement savers in that age group have less than a quarter of the so-called million-dollar goal.
Even in peak earning years, the numbers fall short. For people in their 50s, average savings hit $635,000, but the median still sits around $253,000. The averages look higher, but that's due to a small percentage of high-income households pulling the numbers up. The middle of the curve tells a different story.
Financial planners often suggest aiming for 7.5 to 13.5 times your final salary before retirement. So for someone earning $100,000 per year, that puts the target range between $750,000 and $1.35 million—not unreasonable, but certainly not easy.
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Now here's where the conversation shifts: savings alone won't tell the whole story. Homeownership, more than any stock pick or hot ETF, has quietly created the biggest wealth divide in the country.
According to the Fed, the median wealth gap between homeowners and renters has reached nearly $390,000, while the average difference exceeds $1.37 million. Over the past three decades, homeowner wealth has climbed steadily, driven largely by rising property values and, more recently, the ability to refinance during ultra-low interest rate periods. Renters, meanwhile, have been stuck paying more for less, with limited opportunity to build equity or invest what's left over.
And it shows. From 2019 to 2022, the median financial wealth of homeowners rose from $60,000 to $85,000. Renters? Still under $1,000. In fact, for over 30 years, renter median financial wealth has barely moved, ranging from just $400 to $1,200.
That disparity is a direct result of how housing wealth works. Owning a home not only offers appreciation—it frees up income for other investments. Renters, on the other hand, often spend more than 30% of their income on housing, leaving little left to save, invest, or even breathe.
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The good news? Access to real estate investing no longer requires a down payment the size of a compact car. Investors can purchase fractional shares in income-producing rental homes for as little as $100. It's not a silver bullet, but for those playing catch-up or diversifying in retirement, it's a passive income stream that builds over time—without landlord headaches.
Of course, broader solutions like zoning reform and housing supply expansion are still needed to close the wealth gap across generations. But for individual households—especially those approaching retirement age—the ability to invest in real estate without buying an entire property offers a meaningful edge.
So, where does that leave you?
If your retirement savings are solid, you've built up home equity, and you're still thinking two steps ahead, you may already be on track to land in the top 3%. Not because you chased trends. But because you stayed consistent. And in today's economy, consistency might just be the most underrated financial superpower there is.
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