When older workers finally leave their jobs — and steady paychecks — behind for good, they count on a combination of Social Security and the assets they have accumulated to see them through retirement.
Deciding whether to take Social Security early or to apply for benefits later can be challenging. But once that decision has been made, it is time for retirees to look more closely at their assets.
When they do, what will they find?
Recently, the U.S. Federal Reserve Board surveyed 11,000 adults in the U.S. as part of its latest annual Economic Well-Being of U.S. Households report. Among other things, the Fed asked retirees to list the assets they have taken with them into their golden years.
Here are the most popular assets that retired Americans report having, according to the Federal Reserve’s analysis of U.S. family finances.
6. Life insurance policy cash value
Retired respondents who own this type of asset: 31%
Permanent life insurance policies typically come with a cash value component that builds over time. In many cases, policyholders can tap into this cash value when they need the money.
Experts frequently have differing views about the value of permanent life insurance. If you are unsure about whether a policy is right for you, check out “7 Questions You Should Ask Before Buying Life Insurance.”
5. Securities outside a retirement account
Retired respondents who own this type of asset: 45%
Contributing the maximum-allowed amount of money to your retirement accounts can be a great way save for your golden years. But why stop there?
You can continue to invest money in stocks and bonds outside these accounts, and nearly half of retirees say they have done just that.
If you plan to get serious about investing, make sure you understand the “15 Key Financial Terms to Know to Plan a Successful Future.”
4. Pension
Retired respondents who own this type of asset: 51%
As everyone knows, pension plans have mostly disappeared from workplaces in the U.S. But just over half of today’s retirees are fortunate enough to still have access to defined-benefit pension money through an employer.
Other nations still believe in the trusty pension, as we reported in “19 Countries With the Best Pensions in the World.”
3. Retirement account
Retired respondents who own this type of asset: 57%
Well over half of today’s retirees have tax-preferred retirement accounts, such as a 401(k) plan or an IRA. And while that is a good number, some might be surprised that the percentage isn’t a bit higher.
A large nest egg is one of the best ways to ensure your retirement will be enjoyable and financially stress-free. If you are still working, start saving for retirement as soon as possible. Learn about “5 Simple Ways to Invest Your Retirement Savings.”
2. Savings account or CD
Retired respondents who own this type of asset: 70%
Most adults have money tucked away in a savings account or certificate of deposit (CD), and retirees are no exception.
However, some people prefer to keep their cash stashed somewhere else. If you are among those looking for other options, check out “3 of the Best Places to Keep Cash Besides the Bank.”
1. Home
Retired respondents who own this type of asset: 82%
In America, there is no place like home: More than 4 in 5 retirees own the place where they live.
Of course, we are currently living through one of the most challenging periods for home shoppers. But that doesn’t mean you should give up on homeownership. Money Talks News founder Stacy Johnson offers some tips for landing the home of your dreams in the “3 Tips for Buying a Home When the Market Stinks” podcast.
