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.

Don't Miss:

• I’m 62 Years Old And Have $1.2 Million Saved. Is This Enough to Retire Stress-Free? 
• Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.

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.

Trending: The average American couple has saved this much money for retirement — How do you compare?

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.

Levels of Retirement Freedom

There's no universal definition of wealth, but here's a simple breakdown to help you frame your goals:

• Lean Retirement (FIRE): $800,000 to $1.6 million lets you live simply but comfortably.

• Standard Retirement: $1.5 million to $3 million gives you flexibility without too much worry.

• Luxurious Retirement: $5 million+ when you've reached the "do whatever you want" level.

See Also: The average 401(k) balance soars to a record-breaking high – Here's how to know if your nest egg is keeping pace.

Managing Your Big Expenses

In retirement, a few expenses will take up most of your budget:

• Housing: It's often the biggest cost. Downsizing or paying off your mortgage can make a huge difference.

• Health care: Plan for rising costs here, whether it's routine care or unexpected emergencies.

• Food and Transportation: These add up, but they're easier to manage if you've handled the big-ticket items.

At its core, a wealthy retirement isn't about dollar signs but freedom. To join the top 10%, aim for a net worth of $1.9 million or more, supported by income streams that give you stability. Pay down debt, keep health care in mind and plan based on your lifestyle and where you live.

With thoughtful saving and planning, you can create a retirement where you're not just surviving but truly thriving. Because that's what being "wealthy" in retirement means.

Read Next:

• ‘Which Bucket Do I Draw From First?’ Suze Orman Explains To 67-Year-Old The Best Order For Tapping Into Her Retirement Accounts
• Many are using retirement income calculators to check if they’re on pace — here’s a breakdown on what’s behind this formula.