Here's the net worth you need to be considered poor, middle-class, and wealthy in America — at the age of retirement. How do you compare?

Wealth is a relative concept

Wealth is a relative term, and it comes down to net worth, which is the difference between one’s assets and liabilities. To find one’s net worth, add up the current market value of one’s real estate, investments and any other assets and then subtract debts, such as mortgages or credit card balances.

Speaker and finance author Geoff Schmidt ranks retiree wealth based on data from the Federal Reserve Board’s latest Survey of Consumer Finances. In this model, there are 100 groups, or percentiles, each representing a level of wealth among all U.S. households.

The 50th percentile, right in the middle, is what’s called the median: half of U.S. households have a lower net worth than the median; the other half have a higher net worth. Americans aged 65 and up who rank in the 50th percentile have a household net worth of $281,000, which is usually the equity of their home, some savings and a 401(k) account, Schmidt explains in a YouTube video.

Households in the 20th percentile ($10,000) are considered poor. They likely do not own their homes and are focusing the money they do have on the basic necessities. Anyone below that percentile is considered insolvent or bankrupt, according to Schmidt.

People in the 90th percentile are considered well off, with a household net worth of $1.9 million. They can go on trips, and think about charity donations and sending their kids to college.

The 95th percentile is considered wealthy, with $3.2 million household net worth, so even more spending power, which means estate planning and possibly more than one home. And the 99th percentile is very wealthy, with $16.7 million in net household worth, Schmidt says. They can do whatever they want, and might own a winery or ranch.

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One person’s wealth is another person’s struggle

Context is required, because wealth is not always synonymous with income. For example, a person with a high income might appear rich, but they could be in debt and therefore not wealthy — whereas a person with a low income who is debt-free and has substantial savings could be very wealthy by comparison.

“There are many semantics around the term ‘wealthy’ and varying degrees and definitions,” Doris Meister, CEO and chairman of Wilmington Trust, told U.S. News & World Report.

The wealth and investment expert said that it could depend on where a person lives. For example, a person who is just scraping by in Manhattan would feel wealthy in Kansas City based on the same net worth.

Schmidt says wealth is a matter of context due to the gap between housing markets.

“What is considered wealthy? To some degree the definition of wealth is in the eye of the beholder,” he said..

He gives the example of the average selling price of a home in La Jolla, California, which is one of the most expensive suburbs in the U.S., at $3.9 million.

“Conversely, if you lived in West Virginia, the median selling price of a home there is just over $139,000,” he said. “You could conceivably live on social security alone.”

Retirees burdened by debt

Unfortunately, the percentage of Americans entering retirement with debt is increasing, along with the amount of debt they carry.

A 2019 Congressional Research Service report found the share of households led by those aged 65 and up with any type of debt went up from 38% in 1989 to 61% in 2016.

In addition, the amount of debt among Amerians aged 70 and up increased 614% from 1999 to 2021, according to CNBC, citing data from the Federal Reserve Bank of New York.

The vast majority of debt in this age group is tied up in mortgages, which might be explained by borrowers locking in long term at lower rates.