Can You Guess What It Takes To Be Wealthy In Retirement? Hint: It's Probably Less Than Your Goal

When we talk about wealthy retirees, the image might vary depending on your goals. For some, it's about living stress-free in a sunny, affordable paradise. For others, it's being able to splurge on their grandkids, hobbies or bucket-list adventures. Building real wealth in retirement comes down to two things: net worth and reliable income streams.

Net Worth Benchmarks

To land in the top 10% of retirees, you need an average net worth of $1.9 million, according to Federal Reserve data. However, many financial experts agree that a solid net worth goal starts at $1 million – excluding your primary home’s value.

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Why exclude the house? Unless you plan to sell it and live in an RV, it's more of an asset on paper than something that funds your day-to-day life. Your net worth, instead, should include things like:

• Retirement accounts (401(k)s, IRAs, etc.)

• Investments (stocks, bonds, mutual funds)

• Real estate (beyond your primary residence)

• Other valuables minus any debts or liabilities.

The key is steady saving, smart investing and avoiding dragging debt into your golden years.

Reliable Income Streams

Wealthy retirees know one secret: it's not just what you've saved; it's what keeps flowing in. Here's what typical income streams might look like:

• Social Security: It's not a fortune but helps cover the basics.

• Investments: Dividends and interest from stocks, bonds or mutual funds can provide a steady income.

• Rental Properties: Real estate can offer consistent cash flow, assuming you've planned well.

• Pensions: If you're one of the lucky few with a pension, it's a major bonus.

The goal here? Passive income covers your living expenses, so you don't need to dip into your savings for everyday costs.

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Factors That Shape "Wealthy"

Retirement is deeply personal, but a few big factors can determine whether you feel wealthy or stretched:

• Where You Live: A $1 million retirement fund stretches much further in the Midwest than in coastal hot spots.

• Health care Costs: Medical expenses can add up fast. Experts estimate a 65-year-old couple retiring today will spend about $315,000 on health care.

• Lifestyle Choices: Want to travel frequently or pick up a new hobby? Those extras will affect how much you need.