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5-Minute Tune-Up Prologue

Here are a few sobering statistics on Americans retiring today:

  • The median income for U.S. adults 65 and older is $47,622/year.(1)
  • The average annual expense for adults 65 and older is $48,872/year.(1)
  • According to the Bureau of Labor Statistics, the average U.S. household spent $66,928/year in 2021.
  • The average annual Social Security benefit for retired workers is a meager $20,172/year.(1)
  • The general consensus for retirees who desire to retire with a before-tax income of $140,000/year while preserving their legacy, will need roughly $3-million in retirement savings. 

     > $3,000,000 x 4% (4% Rule) = $120,000 + $20,000 (Social Security Retirement benefit) = $140,000/year

Many people fail to account for unexpected events, such as higher inflation rates, a lower interest-rate environment, or healthcare expenses when estimating their retirement savings goal. For instance, 7 out of 10 individuals aged 65 and above will require long-term care, but many are unaware of this fact.(2) Moreover, a common misconception is that chronic long-term care costs are covered by Medicare. This has the unfortunate reality of forcing many older Americans onto government welfare programs such as Medicaid or Medi-Cal. According to Genworth’s 2021 Cost of Care Survey, the average hourly rate for in-home care is $32/hour, resulting in an annual cost of $280,320 for full-time, in-home care. According to Statista.com,(3) the average annual cost of healthcare in the United States in 2021 was as follows:

  • Nursing home (semi-private to private) - $95,000 to $110,000.
  • Home health aide services - $62,000.
  • Assisted living facility (one-bedroom single occupancy) - $54,000.


Start my 5-Minute Tune-Up
  1. The Motley Fool, This is the Average Income for Retirees in America. By Maurie Backman – Updated Jul 7, 2023. https://www.fool.com/research/average-retirement-income
  2. According to Genworth’s Cost of Care Survey in 2022. https://www.genworth.com/aging-and-you/finances/cost-of-care.html.
  3. Statista.com, By Frederick Michas, May 18, 2022,Annual average rate of long-term health care services in the U.S. as of 2021…