The numbers aren't fake but the analysis glosses over a lot.

The author's data says the median net worth for 65–74 year-old households is about $410,000, but 56% of it is home equity. Exclude the house and the median net worth drops to $171,000 and the median financial assets (the part that could actually be converted to cash easily) are only about $115,000. At the 25th percentile, wealth excluding home equity is under $30,000 for every age bracket from 55 up. So basically the net worth number looks best for the people whose wealth is least spendable.

That calls into question the author's claim that "given their current net wealth, a solid majority of Americans can comfortably retire without Social Security." Back of the envelope math: safely drawing 4% on $115,000–$170,000 provides just $5,000–$7,000 a year versus a median SS retirement benefit in the low $20,000s.

For a typical retiree, SS is worth more than every financial asset they own combined. The author says that downsizing or reverse mortgages count as "doing fine" but that's just his opinion. Reverse mortgages are expensive and you lose your equity quickly, and downsizing in the current market basically means that you pay way more for way less.

From what I can tell, it's basically the top third who could do without SS comfortably. Not at all a "solid majority."

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rcpt 3 hours ago | parent | next [-]

> downsizing in the current market basically means that you pay way more for way less

Can you elaborate on that? It's pretty common for people to sell their 4 bedroom family house and retire to Florida. But it's not "way more for way less"

	▲	ElProlactin 2 hours ago \| parent [-]
		For seniors who sell a house they've owned for years (even decades), they're paying way more for each unit of "house" in this market. Price per square foot tends to go up the smaller the home and the types of homes older people prefer (single-level, near hospitals, newer/lower maintenance) are in higher demand so they're also harder to find and more expensive. Transaction costs (agent commissions, closing costs, moving) can be 8-10% of a sale. The capital gains exclusion is only $250,00 for singles and $500,000 for couples, so if you're sitting on big gains, a sale can come with a significant tax bill. In places like California, where assessment caps like Prop 13 keep property taxes low, buying a new home means that you could end up paying more in property tax on a much cheaper home. If you move into a condo, you have to deal with HOA fees. And so on. Renting isn't always easy either. Senior independent communities can be really expensive (under some models you even have to pay hundreds of thousands of dollars up front) and even if you just rent a regular apartment, you need to compare the rents to drawdowns. $400,000 (the median net worth for 65–74 year-olds) provides $16,000/year at a 4% draw. The median rent for a 1 bedroom apartment in the US is somewhere between $1,200-$1,500.

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3 hours ago | parent | prev | next [-]

[deleted]

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scarmig 3 hours ago | parent | prev [-]

I do kind of get the point that ensuring Boomers who have a lot of wealth in real estate can pass a paid off house to their heirs isn't a socially valuable goal (especially since Social Security is funded by working people, including many who don't own a house or aren't due to inherit one). Maybe instead SS benefit can be considered more like a loan with the house as collateral, payable on death or transfer.

	▲	tzs 2 hours ago \| parent [-]
		So I work for 45+ years, paying SS tax for those 45+ years, and what that gets me is a loan when I retire with payback deferred until I die? You'll have a hard time convincing anyone that they want to participate in that.