When you hear about the lower, middle, and upper class all your life, it’s normal to be curious about where you stand in comparison. In particular, many of us want to know just how much money the upper class has.
Thanks to Federal Reserve data gathered by The Motley Fool, we have the answer — at least when it comes to retirement savings. Here’s just how much more the upper class has saved for retirement than everyone else.
The average upper-class American’s retirement savings
The top 10% of Americans have a median retirement savings of $900,000. Those are the Americans in the 90th to 100th net worth percentiles. The next group, from the 75th to 89.9th percentiles, has a median retirement savings of $269,000.
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The richest Americans don’t just have the most saved for retirement. Their retirement savings have also been growing at a much faster rate than everyone else’s. Here’s a complete look at median retirement savings by net worth, and how much each group’s has grown since 1989.
| Net worth percentile | Median retirement savings (2022) | Growth since 1989 |
|---|---|---|
| Below 25th | $6,000 | 160.24% |
| 25th to 49.9th | $22,380 | 162.35% |
| 50th to 74.9th | $80,000 | 246.98% |
| 75th to 89.9th | $269,000 | 366.69% |
| 90th to 100th | $900,000 | 713.24% |
Data source: Federal Reserve.
Not everyone is going to be part of the upper class, and that’s fine. We are talking about the top 10% to 25% of incomes, after all. But everyone needs to save enough money for retirement. That’s why it helps to know what has worked for the wealthiest Americans.
What do upper-class Americans do differently when saving for retirement?
Research into wealthy Americans has found that they generally share a few key financial behaviors. These are all behaviors that anyone can adopt and that can drastically increase the amount of money in your retirement accounts. So if you’re not doing them already, it’s a good idea to get started.
They set aside a portion of every paycheck
Author and Certified Financial Planner™ (CFP®) Tom Corley studied millionaires for five years. He found that nearly half of self-made millionaires got there by saving 20% of each paycheck. They would generally have 10% taken out automatically and contributed to a 401(k), and then invest another 10% themselves through their brokerage accounts.
If you can set aside 20% of every paycheck, that’s great! But if not, don’t be discouraged. Smaller amounts work, too — what’s most important is consistency. Decide how much you can afford and contribute that to your retirement savings every month.
They maximize their earning potential
Upper-class Americans are able to save so much for retirement because they earn large salaries. While there’s no strict definition of upper class, it’s often considered to be Americans in the top 20% by income.
By definition, most people aren’t in the top 20% of earners. But anyone can take steps to earn more and maximize their own earning potential. You could:
- Build a freelance business around high-value skills you have
- Look for opportunities to get promoted at work
- Go job hunting and network regularly to find companies that will pay you more
They invest in the stock market
The stock market has historically been one of the top ways to build wealth. Its average return is about 10% per year, so if you invest in stocks regularly, your money will grow much more than if you just had it in a bank account.
Upper-class Americans invest heavily in the stock market. The wealthiest 10% own a massive 86.9% of stocks, while the bottom 50% only just 1%, according to the Federal Reserve. While stock investing doesn’t guarantee you’ll make it to the upper class, it can certainly help you build your retirement savings.
The upper class has substantially more in retirement savings than everyone else. But you don’t need to be part of that group to put away enough for retirement. If you’re consistent about saving for retirement, you increase your income when possible, and you invest in stocks, you can build a sizable nest egg of your own.
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