Can You Guess What Percent Of People Have $1 Million Saved? Spoiler Alert – It’s Far Lower Than Most Statistics Lead You To Believe

By Investor Empires On Nov 15, 2024

A few decades ago, you would have been successful if you reached the magical million-dollar mark. I was rich. However, these days, with costs skyrocketing and social media full of fancy features, it can seem like everyone has a cool million in their back pocket. the truth? This is more illusion than reality. like said financial guru Dave Ramsey: “8 out of 10 people probably cannot afford the house they live in and the car they drive.”

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Social media tends to amplify what looks like wealth, leading to this widespread perception that everyone is swimming in money. But if you take a peek behind the scenes, it’s clear that not many people have as much money as they seem. So, let’s break it down – how many Americans have a net worth of $1 million or more?

Spoiler alert: It’s not as many as you think

According to the Federal Reserve’s 2022 Consumer Finances Survey, only about 12% of American households have a net worth of more than $1 million. This means that the vast majority, 88%, did not come close to this level in any way. Keep in mind that this is a “household” net worth, which likely assumes two people’s income and combined assets.

Wealth is highly concentrated while the average The net worth of American households is $1.06 millionThe median net worth is much lower, at $192,700. Translation: There are a few very wealthy families that raise the average but most people are much closer to that average number.

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Where are the millionaires?

Some countries and age groups stand out in terms of context. New Jersey, for example, has the highest rate of millionaire households — about 9.76% of homes there have a net worth of more than $1 million. In terms of age, people ages 65 to 74 have the highest average net worth at $1.2 million, but the median for the same group is only $266,400. In other words, while some retirees have a bunch of money saved, many are still getting by.

401(k) balances tell a similar story. The average 401(k) balance for Americans ages 65 and older is $272,588, but the median is only $88,488 — meaning half of people have less than that amount saved.

What does it mean to have a million dollars?

A net worth of $1 million is not the same as having that amount in the bank. Net worth includes assets such as home equity, investments and retirement accounts — things that can’t easily be converted into cash. With the cost of living rising due to inflation, many Americans now consider $2.2 million to be the new minimum for feeling “rich.”

See also: Can you guess how many retirees have a $5,000,000 nest egg? The percentage may shock you.

Are we all millionaires yet?

The short answer is no, not even close. And while social media may make it seem like everyone is living lavishly, the reality is much more modest. In fact, most people are still trying to build their own financial safety nets, which makes those few million dollars seem rare and impressive.

Next time you scroll through someone’s highlights bar, remember: What you see is just a highlight.

If you’re looking to reach the million-dollar mark yourself, it’s less about flash and more about patience and consistent saving. Let’s say you’re 35 years old and you’ve already saved $20,000. Assuming an average annual return of 7% — a common benchmark for long-term investments — you’ll need to save about $5,000 a year, or about $417 a month, to reach $1 million by age 65. And if you increase this amount as your income grows, you will reach your goal sooner. The key is consistency, and letting time and compounding work their magic.

Of course, this is just one scenario and the situation varies from person to person. The best way to chart your path is Talk to a financial advisor. They can help you customize a strategy that fits your income, goals, and lifestyle, whether you’re aiming for that million or a secure retirement.

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This article Can you guess what percentage of people have saved a million dollars? Spoiler alert – it’s much lower than most statistics lead you to believe Originally appeared on Benzinga.com