Everyone dreams of a comfortable retirement, where you don’t have to stress about running out of money or pinching pennies. The goal is to enjoy your golden years with enough financial security to live the lifestyle you’ve always imagined. Whether you’re hoping to travel the world, spend time with family or just relax without financial worries, understanding different levels of wealth people over 65 have can help set realistic goals.

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Using insights from a recent YouTube video and data from the Federal Reserve, here’s a breakdown of what being “poor,” “middle class” or “wealthy” looks like at this stage of life.

In this context, “wealthy” is defined as being in the 95th percentile of household net worth. This means you have more wealth than 95% of individuals in your age group. This benchmark clearly shows how financially well-off you are compared to the majority.

Three factors come into play to build significant wealth: investment, rate of return and time. If you excel in one area, you can compensate for lesser performance in the others. For example, starting early with investments can lead to substantial growth over time, even with a modest rate of return.

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In the 20th percentile, retirees typically have a net worth of around $10,000. This group might not own a home or a car and may have minimal savings. Their financial focus is often on addressing immediate needs like health care and personal safety, leaving them with limited options for discretionary spending.

The average net worth in the 50th percentile is about $281,000. Individuals in this bracket generally own their homes and have some savings, possibly in a 401(k) or similar account. They can afford to participate in social activities, buy gifts for family and friends and enjoy more flexibility in their financial planning. However, they still need to be cautious about their spending.

Moving to the 90th percentile, retirees have a net worth of approximately $1.9 million. Those in this category can consider luxury vacations, set up college funds for grandchildren and make significant charitable donations. Their financial situation allows for greater comfort and less concern about daily expenses.

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At the 95th percentile, the net worth is around $3.2 million. Retirees here focus less on everyday financial concerns and more on comprehensive wealth management. They often work with financial professionals for estate planning and may own multiple properties or invest in various assets.

Finally, the 99th percentile features individuals with a net worth of about $16.7 million. This elite group enjoys extensive travel, owns luxury properties and may invest in high-end ventures like vineyards. Financially, they are at the top, living a lifestyle well beyond the average retiree.

Understanding these different levels of wealth can help you set realistic retirement goals. If you aim to improve your financial situation, consulting with a financial advisor can provide guidance tailored to your needs and help you plan effectively for a secure retirement.

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This article Do You Know What It Takes To Be ‘Wealthy’ When Retired? Here’s What The Top 5% Of Retirees Have In Their Nest Eggs originally appeared on Benzinga.com

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