To have a top one percent net worth is an impressive achievement. However, what is a top one percent net worth amount exactly? Further, it’s probably more appropriate to shoot for a top one percent net worth by age. After all, it’s not fair to compare your net worth at 25 to someone’s net worth at 50.

After publishing, The Top 1% Income Levels By Age Groups, there were two main responses from the community:

1. You are surprised how low the top one percent income levels are.
2. It’s not how much you make, but how much you keep.

The top on percent income levels for all the age groups looks a little light compared to the overall median top percent figure of $380,000 as reported by the IRS back in 2013.

However, the income levels are all the MINIMUM amounts you need to make in order to be classified in the top one percent. In other words, making $210,000 as a 32 year old puts you in the top one percent for your age group. So does making $350,000.

Thanks to economic growth and inflation, a top one percent income level for 2020 is now about $470,000. The income level was only about $400,000 just in 2012. Don’t be on the wrong side of inflation.

The top one percent income of $470,000 can be individual income or household income. The income is reported income to the IRS, so there is a combination of both.

I first wrote this post in 2012, soon after I had left my day job in the finance industry after 13 years. I was thrilled, but also a little worried about the unknown. The idea of this post was to capture the feeling of financial independence.

In this revised edition, I’d like to add more color eight years later. It’s interesting how our perspectives change as we get older.

The whole point of this post is to encourage everyone to save more, invest more, earn more, and pay better attention to your finances. I know we’re all tired as hell from juggling so many things while under lockdown.

However, I can assure you that the reward is worth the “sacrifice.” We must keep on going.

Are you wondering how to reduce 401k fees? You’ve come to the right place. I was paying over $1,700 a year in 401k fees until I finally did a 401k portfolio audit.

Now I’m hardly paying any 401k fees. Due to analyzing my portfolio, I have reduced my 401k fees by over $100,000 over the next several decades. My goal is to help you reduce 401k fees as well.

The sooner you start planning for retirement the better. Too many people wake up 20 years from now and wonder where all their money went. By having specific financial goals by age, your retirement will be more comfortable than if you had decided to just wing it.

I suspect being overwhelmed with choices is one of the main reasons why folks don’t start financial planning as soon as they find their first job. When you’ve got to decide between various retirement plans, various investments, and learn about various rules, it’s much easier to just hoard cash.

Heck, some people even find hoarding cash hard. It’s sometimes easier to spend all your money now on the good life instead of figuring out how to make your money grow over time.

Don’t procrastinate when it comes to retirement planning. The more time you have to let your money compound, the better.

To make retirement planning easier, let’s go through some financial goals to achieve by age. To make retirement planning even easier, I’ll just highlight one main financial goal by decade.

This post will provide a guide for how much your net worth or savings should be based on income. Too many people go through life just winging their finances. No wonder why most people end up in old age wondering where all their money went.

If you’ve been making $500,000 a year for a decade as a 40 year old but only have a $1 million net worth, you’re probably a donkey with some serious financial issues. If you’re making $80,000 as a 30 year old but have a $500,000 net worth you are a hero who is on their way to bubbles and unicorns!

I’ve written about The Average Net Worth For The Above Average Person that provides charts on where highly motivated people who want to achieve financial independence should be. The only problem with my analysis is that it doesn’t tie income levels specifically in the charts. This post will bind the inextricably important link between income and wealth to ensure as high a chance of financial freedom as possible.

To create a good net worth guide based on income can be very tricky based on variables such as how long someone has been making X income, the return on investment, and the state of the economy.

Hence, a more conservative assumption is to replace net worth with savings. Let’s first understand the current state of the world and break down our assumptions.

If you plan to retire, it’s good to know what age do most people retire in America. You don’t want to be a misfit and retire too soon. Otherwise, what are you going to do with your life? You also don’t want to retire too late and miss out on doing all the things you want to do.

Many Americans are in a difficult financial situation with only about $17,000 in retirement savings for those between the age of 56 and 61. With such low retirement savings according to the Economic Policy Institute, you’d think most Americans are never going to retire.

The truth is, most Americans do eventually retire.

What Age Do Most People Retire?

According to the Life Insurance And Market Research Association (LIMRA), 69% of Americans retire by age 66. Roughly 51% retire between the ages of 61 and 65. By age 75, 89% of Americans have left the labor force.

It surprises me that less than 1% of Americans retire before age 50. With the way the Financial Independence Retire Early (FIRE) movement has taken off, as well as the rise of freelance work, you’d think the percentage would be higher.

Financial Samurai has been writing about early retirement since 2009. Tens of millions of readers have read this site since.

Take a look at this graphic below that shows what age do most people retire in America.

If you’ve got a pension, count yourself as one of the lucky ones. You won’t be forced to lower your safe withdrawal rate in retirement like those of use who don’t have pensions. This post will help you calculate the value of a pension. It is much more valuable than you think.

Pensions, also known as Defined Benefit plans, have become rarer as companies force their employees to save for themselves mainly through a 401k, 457, 403b, Roth 401k or IRA. These savings vehicles are also known as Defined Contribution plans.

But as we all know, the maximum amount you can contribute to a 401K or IRA is only $19,000 or $6,000, respectively for 2019. Even if you max out your 401k for 33 consecutive years starting today, it’s unlikely your 401k or IRA’s value will match the value of a pension.

Take a look at my latest 401k savings potential chart. After 33 years of maximum contributions, I estimate you’ll have between $568,000 – $1,800,000 in your 401k, depending on performance. $1,800,000 sounds like a lot, but in 33 years, $1,800,000 will buy just $678,000 worth of goods and services today using a 3% annual inflation rate.

If you live for 20 after your last 401k maximum contribution, you’ll only be able to spend $33,900 a year in today’s dollars until the money runs out. $33,900 is not bad, but it’s not like you’re living it up after sacrificing your life for decades at a job you didn’t love.

Given the power of inflation, to neither max out your 401k nor invest an additional 20%+ of your after-tax income if you don’t have a pension is risky. When it comes to your money, it’s always better to end up with too much than too little.