America Killed The Middle-Class Retirement
When seven figures saved still leaves you worried about money
“I’m worried about money.”
This is a sentence I heard from more than one client in the last months.
The last person who said this has a net worth north of $2 million.
A paid-off house.
A portfolio that took 30 years to build.
When I started to speak to people about retiring abroad, I assumed politics was the main driver.
And even though I refrain from speaking about politics openly, I guess it’s fair to say that America has been rough lately.
People are frustrated, anxious, looking at their options.
But the deeper I dug into these conversations, the clearer it became that money was driving as much of this as politics.
At the very top, money is no object.
At the bottom, you can retire cheaply if you make big trade-offs.
But that comfortable middle, the retirement with a nice house and decent healthcare and enough cushion to not stress every month, is gone.
I want to walk through what changed.
Why healthcare got more expensive.
Why the retirement your parents had is a relic of the past.
And also why moving abroad will not magically fix everything.
Healthcare Costs Are Up 121%
Between 2000 and 2024, general inflation in the United States rose about 86 percent.
Healthcare costs rose 121 percent.
If you retired in 2000 with $1 million saved and budgeted $500 a month for healthcare, that same coverage now costs over $1,100 a month.
Over 20 years, that gap is $144,000.
In 2025, the average family health insurance premium hit $27,000 a year.
That number does not include deductibles, which have climbed 17 percent since 2020.
Neither does it include copays or the prescriptions (that your plan decides not to cover this year).
Fidelity ran the numbers for a 65-year-old retiring today.
Average lifetime healthcare costs: $172,500.
And that assumes you stay healthy enough to avoid the really expensive part, which comes later.
Most people worry about the stock market, about inflation, about whether Social Security will exist.
But markets go up and down.
Healthcare only goes one direction.
You can move to a cheaper state.
You can downsize your house.
You can drive an older car.
You cannot opt out of getting older.
Healthcare costs outpaced general inflation by 35 (!) percentage points.
That single fact reshapes what retirement costs.
And it follows you no matter where you live in the United States.
And Then You Get Old
Seventy percent of Americans who reach age 65 will need some form of long-term care before they die.
Most people assume Medicare will cover them when they get older and need help.
But it only covers the things that “fix you”.
It does not cover the aide who helps you shower after a stroke or the facility where you live when your memory starts to slip.
The government calls this “custodial care” and considers it non-medical.
And looking at the cost, it makes your stomach turn.
A nursing home now costs around $130,000 a year. Assisted living about $75,000. If you want to stay home and have someone come to you, expect $80,000.
Only about 4 percent of Americans over 50 have long-term care insurance.
The policies are expensive, hard to qualify for, and the industry has been shrinking for two decades.
Most people who look into it decide they cannot get approved or cannot afford it.
The uncertainty is the problem.
Long-term care is not a fixed cost you can plan around, but a variable that ranges from zero to six figures annually, for a duration nobody can predict.
And nothing in the system is set up to help you plan for it.
The Rest of the Math
Healthcare and long-term care are the big ones.
But they are not the only numbers that changed.
People are living longer.
A 65-year-old today can expect to live into their mid-80s. That means your savings need to last 20 to 25 years, not 15.
This is a good thing.
You will have more time with the people you love.
But it also means an extra 10 years of housing, food, insurance, property taxes, and medical bills.
The math that worked for your parents does not stretch that far.
For a decade, the “safe part” of your portfolio paid almost nothing.
Between 2010 and 2020, anyone relying on CDs, bonds, or savings accounts watched their “safe money” earn close to zero.
Meanwhile, inflation ran at 2 to 3 percent annually.
Retirees who followed the rules got punished for it.
Housing costs keep rising even after you pay off the mortgage.
Property taxes across the US are up 30 percent since 2019.
In some states, the increase is higher.
Homeowners insurance has increased 40 percent nationally.
In California, some insurers have stopped writing new policies entirely.
A paid-off house is still an asset.
But it is an asset with carrying costs that increase every year.
Social Security is not keeping up.
Benefits have lost 20 percent of their buying power since 2010.
Every year, the check covers a little less.
And then there is the question of how much is “enough”.
Ten years ago, a million dollars felt like a comfortable retirement.
Now the consensus number is $2.1 million.
Which brings me back to the client I mentioned at the start.
Millions in the bank, and still worried.
Three Reasons I Might Be Wrong
I can already hear the objections.
“Americans are richer than ever.”
This is statistically true.
Median household wealth hit a record in 2022. The stock market has climbed for 15 years.
If you owned a house and held index funds, your balance sheet probably looks better than your parents’ did at your age.
But healthcare costs went up faster.
You can be wealthier than your parents on paper and still have less security.
“The middle class is shrinking because people moved up.”
The American Enterprise Institute made this argument a few years back.
The middle is disappearing, they said, but mostly because households graduated into higher brackets.
More people earn over $100,000 today than in 1970.
Adjusted for inflation, the upper-middle class has grown.
I want to take this seriously before I take it apart.
Yes, more households crossed the $100,000 line.
But crossing a line is not the same as reaching safety.
The bracket might “look” comfortable on a chart, but doesn’t reflect reality.
“Just save more. Work longer.”
Does that work?
Let’s check.
A 65-year-old today faces an average of $172,500 in lifetime medical costs.
If they need long-term care for three years, add another $390,000.
Saving an extra 5 percent of your income for a decade does not close that gap.
It barely makes a dent.
Apart from the fact that not everyone can (or wants to) work until they are 70.
So Will Moving Abroad Fix Everything?
I run a publication about living abroad.
And I help people relocate.
But I will be the first to tell you that moving to another country does not solve your problems by default.
What I do believe is that leaving a system that no longer works for you is a legitimate choice.
If you have saved for 30 years, done everything right, accumulated a portfolio worth seven figures, and the math still does not add up for a comfortable retirement in your own country, something is not right.
And you are not obligated to stay and hope it fixes itself.
Moving abroad can be one of the best decisions you ever make.
People who were stressed about money in the US now live well in Portugal or Spain or Mexico on half the budget.
People who dreaded healthcare costs now pay a few hundred dollars a month for private insurance that covers everything.
People who thought retirement meant downsizing and worrying now travel, learn new languages, and wake up without financial anxiety.
It happens because they planned.
They asked the same questions about their new country that we asked about the US.
How fast are healthcare costs rising?
What does insurance actually cost?
Can I afford long-term care if I need it?
What are the problems here that might catch me off guard?
Every country has problems:
Portugal has bureaucracy that moves slowly.
Mexico has infrastructure gaps outside major cities.
Thailand has visa rules that change without warning.
Spain has regional tax rules that confuse even the locals.
But here is the difference.
Some of those problems are easier to plan around, than simply not being able to afford retiring.
You can learn a language.
You can hire someone to navigate paperwork.
You can structure your visa situation with a backup plan.
What you cannot plan around is simply not having enough money.
My point is:
Moving abroad is not a “magic solution”.
But it is one solution.
And hundreds of thousands of Americans have already decided it is the right one for them.
And maybe it is the right one for you too.
Thanks for reading, and as always, appreciate having you here.
— Ben
PS
If you are an American 50+ and want to emigrate within the next 0-5 years, and don’t want to navigate healthcare, banking, visas, taxes and country selection by yourself, reply to this mail with “RETIRE”.
You’ll get an invite to the “Retire Abroad Priority List” with some of my best tactics for retiring abroad.
This is a great article, Ben. Scary, but good. I will push back on Pamela a bit. Pamela, you are absolutely right about not needing as much as most of us Americans think we need.
However, the issues with Social Security, Medicare, healthcare costs, and rising costs in general are not going to be solved by Congress in time to make any difference for those of us retiring in the next 20 years. These things should have been dealt with decades ago. Because they weren't, the changes that will need to be made now will be dramatic (slashing benefits, raising age eligibility, killing programs all together). As a progressive, I have wished for universal healthcare in this country, but it won't happen in my lifetime.
Let's turn to a positive subject. Ben's options for going abroad represent a way to move into a situation that offers a different approach and (often) lower costs. It is also something new and exciting to do in this phase of our lives. I think it's awesome, but I only feel that way because we have someone like Ben to help guide the journey.
Best of luck to all of us!
I would say the majority of those things that you point out are still political, because the majority of them could be fixed by Congress. Most especially the healthcare debacle in this country.
I'm about to retire and don't have a 401k, and at best I might have $400k to invest when I sell my home. But I will be traveling the world because I don't need a 4 bedroom house with the two car garage, which is likely what those people have their $2M retirement fund our living in. They could be comfortable if they downsize, stop expecting to eat out several times a week, and they could likely spend a lot less on their vacations... And still be comfortable. Never mind that they could be using credit card points for their travel with the kind of money they are likely spending every week. I've managed to accumulate 500k+ points over the years by taking out points cards when I have a big spend coming up.
The biggest one is the fact that we live longer... And sadly, our families no longer want to take care of their elders here like they do in many other countries. I took care of my father, and honestly, that's one of the reasons I can do what I'm gonna do, because we invested the money from his home into something a little larger that we could both live in, and I put a lot of sweat equity into it, and it's increased drastically in value. The original value from his home wouldn't have lasted him 6 months in a nursing home, but I never would have allowed that to happen anyway... We actually went back to the nuclear family with 4 generations under one roof... My daughter and my granddaughter lived in my basement, and my daughter and I helped each other out with "sitting" for each other, when we needed to go out.
Perhaps if Americans went back to the nuclear family, and we voted in a government that actually does things FOR the people, instead of billionaires who are just lining their pockets with more money, we could get back to some sense of balance.