You may already know the Census Bureau data shows there are 115,610,216 households in the United States and, that, as per the Federal Reserve data, roughly 1 out of every 5 of these households earns $100,000 or more per year; that 1 out of every 25 of them has a net worth of $1,000,000 or more. What about substantial wealth excluding houses, cars, furniture, jewelry … actual investment portfolios stuffed with cash, stocks, bonds, mutual funds, real estate investment trusts, master limited partnerships, tax-lien certificates, or any of the other numerous securities one can own to compound capital?
Some of thebest data I can find indicates thereare 1,821,745 households thathave investmentportfolios valued at$3,000,000 or more1. This means roughly 1 out of every 63+ households. This group contains:
- 893,344 households with $3,000,000 to $5,000,000
- 679,242 households with $5,000,000 to $10,000,000, and
- 249,159 households with $10,000,000+
When the nation’s largest trust company, U.S. Trust, went to study those who make the rankings in an annual publication calledInsights on Wealth and Worth [PDFor website], it found that the “vast majority (94%) … say they have a clear purpose in life. Three-quarters (75%) agree that their life’s purpose would not change even if they were to lose their wealth”. As a whole, the group is obsessed with maintaining good health – looking at other data sets, this makes sense given those in the group, relative to the general population, arefar less likely to smoke, drink in excess, be overweight, or have children out of wedlock. A disproportionate percentage of the list either owned their own business or worked as a corporate executive, but this isn’t a surprise if you’ve examined the Federal Reserve data; business owners, as a class, have net worth figures that are many, many, many times the rest of the population as a good operator is able to create value not only from the profit component but the capitalized value of those profits when and if he or she goes to sell the business. (There’s a degree of self-selection here because if you are not talented enough to run a business, you fail and lose everything, removing you from the data pool. And a lot do fail, thoughthere are some problems with the headline figures people repeat without thinking.)
Guess what else? As per all of the other data I’ve ever seen, stealth wealth rules the day. Barely more than1 out of 3 households have fully disclosed their wealth to their children; the kids and grandchildren have no idea how rich the investors have made themselves. Specifically:
- 17 out of 100 have offered no disclosure at all,
- 47 out of 100 have offered only a little bit of disclosure, and
- 36 out of 100 have provided full disclosure.
That’s a whole lot of people who have no idea they are going to be on the receiving end of a boatload of wealth, provided charity doesn’t get it. The United States of America is full of people like Phyllis Stone, wearing frumpy house dresses, driving beat-up Chevy Cavaliers, and living in normal houses as their tens of thousands of shares of Exxon Mobil pump out six-figures in annual dividend income or, in some cases, successful executives and doctors who have no doubt done well, but haven’t let onhow well.
When U.S. Trust asked its sample group the reasons they were so secretive about their money,:
- 34 out of 100 said, “I am concerned it will negatively impact their work ethic”
- 20 out of 100 said, “I was taught never to discuss wealth”
- 19 out of 100 said, “I am concerned they will discuss it publicly outside the family”
- 17 out of 100 said, “My child/ren aren’t mature enough to handle it”
- 15 out of 100 said, “I never thought about it”
- 5 out of 100 said, “My child/ren aren’t old enuogh”
- 6 out of 100 said, “I don’t know how to bring it up”
Perhaps, then, it isn’t surprising that the Williams Group wealth consultancy found that a whopping 70 out of 100 wealthy families will lose their wealth by the second generation and an almost unbelievable 90 out of 100 will have dissipated it by the third generation. One of the consequences of this winner-take-all meritocracy that has been unleashed by the rise of the microchip and globalization increasing productivity is what others have called the “high beta rich”; that we are now a nation of the self-made, with inheritance and “old money” becoming less and less important than it has ever been at any time in the history of not just the United States but of human civilization. Even the Forbes 400 list of the richest Americans hit an all-time high for the percentage of billionaires who are self-made, whereas when the list was first compiled decades ago in the 1980’s, it was mostly aristocratic families like the Rockefellers and DuPonts. The blue bloods are dead. Long live the entrepreneurs.
Most of the data I’ve seen roughly approximates the breakdown on this Forbes page … around 70% of assets are accumulated in the current generation through business ownership, 25% are generated from high-income occupations, such as becoming a doctor, and 5% originates from inheritance. If you ever hear someone talking about how the rich in America are that way because of the silver spoon they were given at birth, know that you’re listening to someone who is living in a fantasy world. It hasn’t been true for decades. That economy is dead and gone.
The representative sample also held significantlyhigher cash reservesthan typical investors:
- 8 out of 100 held 50% or more of their portfolios in cash
- 14 out of 100 held 25% to 50% of their portfolios in cash
- 40 out of 100 held 10% to 24% of their portfolios in cash
- 38 out of 100 held less than 10% of their portfolios in cash
The last group isn’t much of a surprise because there’s some research I’ve been reading lately indicating that there are a lot of high net worth individuals living paycheck to paycheck in the United Statesdue to apropensity to over invest. Though not a perfect overlap in demographic, the paper I’m currently reading, written by Greg Kaplan at Princeton University, Giovanni L. Violante at New York University, and Justin Weidner at Princeton University, deals with it. It’s calledThe Wealthy Hand-to-Mouth[PDF].
Footnotes
1In its 2015Insights on Wealth and Worth [also available in Executive Summary PDF], U.S. Trustlooks at data fromCerulli Associates, Cerulli Lodestar – Retail Investor Subscription, 2013 and uses it to paint a picture of America’s rich, from which it drew for a study sample. You can order the recently released 06/25/2015 edition if you want slightly updated figures, but it’s going to cost you $17,000.
FAQs
1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.
What percentage of Americans have a net worth of $3000000? ›
According to The Kickass Entrepreneur, there are about 5,671,000 households in the U.S. that have a net worth of $3 million or more. This represents 4.41% of all U.S. households.
Is a net worth of 3 million considered rich? ›
Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
What is the net worth of the top 5%? ›
On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
How many people in the US have $3000000? ›
How many multimillionaires with more than $3 million are there in the United States? There are roughly 5,671,005 households with $3 million or more in America, 4.41% of all US households.
What is considered high net worth? ›
A high-net-worth individual (HNWI) is someone with liquid assets of at least $1 million. These individuals often seek the assistance of financial professionals to manage their money, and their high net worth qualifies them for additional benefits and investing opportunities that are closed to most.
What percentile is 2.5 million net worth? ›
Net-worth percentile breakdowns: Top 1% = $10.8 million Top 2% = $2.5 million Top 5% = $1.03 million Top 10% = $855,000 Top 50% =$522,000 Do these numbers surprise you?
How many people have $3,000,000 in savings? ›
1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.
What age can you retire with $3 million? ›
You can probably retire in financial comfort at age 45 if you have $3 million in savings. Although it's much younger than most people retire, that much money can likely generate adequate income for as long as you live.
Is 2.5 million a high net worth? ›
Schwab's 2022 Modern Wealth Survey, which surveyed 1,000 Americans ages 21 to 75, revealed that it takes a net worth of $2.2 million to be considered wealthy. This $2.2 million figure is, again, highly subjective. The average net worth of U.S. households is $121,760.
However, one measure that many overlook is net worth. Your net worth represents how much wealth you have, measured by assets like a house, cars, 401(k), jewelry or cash in the bank, minus the debt obligations you have, or what you owe.
What is the net worth of the top 2 percent? ›
Net Worth USA Percentiles – Top 1%, 5%, 10%, and 50% in Net Worth
- The top 1% of net worth in USA in 2022 = $10,815,000.
- The top 2% of net worth in USA in 2022 = $2,472,000.
- The top 5% of net worth in USA in 2022 = $1,030,000.
- The top 10% of net worth in USA in 2022 = $854,900.
Somewhere around 4,473,836 households have $4 million or more in wealth, while around 3,592,054 have at least $5 million. Respectively, that is 3.48% and 2.79% of all households in America.
What is upper middle class net worth? ›
Note
| Quintile | Definition | Median Net Worth |
|---|
| Next 20% | Lower-Middle Class | $43,760 |
| Middle 20% | Middle Class | $104,700 |
| Next 20% | Upper-Middle Class | $201,800 |
| Top 20% | Wealthy | $608,900 |
1 more rowDec 30, 2021
Experts advice to have 10x of your annual salary saved by retirement age at 65. The average person aged 65-74 has $1,217,700 in net worth. The median net worth is $266,400.
What net worth do you need to retire? ›
“Several experts on retirement have given various estimates about how much you need to save: close to $1 million, 80% to 90% of your yearly income before quitting work, and 12 times what you used to make annually.”
What is affluent and high net worth? ›
What's the Difference Between Mass Affluent and High Net Worth? The biggest difference between mass affluent and high net worth individuals is the amount of assets they've amassed. High net worth individuals have even more assets than the mass affluent. A high net worth individual has over $1 million in liquid assets.
What net worth is rich by age? ›
Between 35 to 44, the average net worth is $436,200, while between 45 to 54 that number increases to $833,200. Average net worth cracks the $1 million mark between 55 to 64, reaching $1,175,900. Average net worth again rises for those ages 65 to 74, to $1,217,700, before falling to $977,600 for someone over age 75.
Does high net worth include 401k? ›
Do you include a 401(k) in a net worth calculation? All of your retirement accounts are included as assets in your net worth calculation. That includes 401(k)s, IRAs and taxable savings accounts.
What should my net worth be at age 60? ›
Average net worth by age
| Age by decade | Average net worth | Median net worth |
|---|
| 40s | $693,583 | $140,159 |
| 50s | $1,257,943 | $312,890 |
| 60s | $1,603,384 | $489,261 |
| 70s | $1,629,514 | $415,015 |
4 more rowsThis is according to a study conducted by Ramsey Solutions, which is the largest study of millionaires to date. The average age of a millionaire is 49 years old, which means it takes them over 27 years of saving and investing to reach this status. This may seem daunting, but the truth is, it's never too late to start.
What percentage of Americans have a net worth of over $1000000? ›
There are 5.3 million millionaires and 770 billionaires living in the United States. Millionaires make up about 2% of the U.S. adult population. While an ultra-high net worth will be out of reach for most, you can amass $1 million by managing money well and investing regularly.
How many Americans have $300,000 saved? ›
– Nearly 13 percent said they have $50,000 to $99,999. – More than 12 percent said they have $100,000 to $199,999. – Nearly 10 percent have $200,000 to $299,999. – About 16 percent have $300,000 or more in retirement savings.
What percentage of retirees have $500,000 in savings? ›
In 2019, about 50% of households reported any savings in retirement accounts. Twenty-one percent had saved more than $100,000, and 7% had more than $500,000. These percentages were only somewhat higher for older people. Those ages 51 to 55 were the most likely to have a retirement account.
Is $2 million a multi millionaire? ›
Dated ways of describing someone worth n millions are "n-fold millionaire" and "millionaire n times over". Still commonly used is multimillionaire, which refers to individuals with net assets of 2 million or more of a currency.
Can a couple retire at 62 with $1 million dollars? ›
It's certainly possible to retire comfortably in this scenario. But it's wise to review your spending needs, taxes, health care, and other factors as you prepare for your retirement years.
Can a couple retire at 65 with $1 million dollars? ›
It's definitely possible, but there are several factors to consider—including cost of living, the taxes you'll owe on your withdrawals, and how you want to live in retirement—when thinking about how much money you'll need to retire in the future.
Can I retire with $3 million in the bank? ›
A $3 million portfolio will likely be enough to allow a retired couple to spend reasonably and invest with moderate caution without any worries of running out of money. However, if expenses rise too high, it's entirely possible to drain a $3 million portfolio in well under 30 years.
Is a 50 million dollar net worth rich? ›
A new report from Credit Suisse has found that individuals with assets worth more than $50 million, referred to as “ultra-high-net-worth” (UHNW) individuals, spiked to a record high last year.
What is considered upper class? ›
In 2021, the median household income is roughly $68,000. An upper class income is usually considered at least 50% higher than the median household income. Therefore, an upper class income in America is $100,000 and higher. However, an upper class income also depends on where you live.
Is $5 million considered rich? Statistically speaking, yes, having a total net worth of $5 million is considered rich. According to the latest survey from the US Federal Reserve, a net worth of $5 million puts you in the top 10% of households in the US by net worth. I'd say that's rich!
Does net worth include retirement accounts? ›
Yes. The value of your 401(k) account is a part of your net worth and should be included in your net worth. Like anything else of financial value, the vested balance of your 401(k) account — or any retirement account, for that matter — is considered an asset.
What is a good net worth to have? ›
A common rule of thumb for determining what your net worth should be at any given age is to divide your age by 10, then multiple that by your gross annual income. So if you're 40 years old making $100,000 a year then you should have a net worth of $400,000.
Should you include pension in net worth? ›
FP Answers: It's certainly fair to include things such as pensions, home equity, mortgage paydowns, business sales, inheritances, etc., as part of your asset allocation strategy.
What is the top 1% total net worth? ›
Key Takeaways
- As of 2019, the top 1% of household net worth in the U.S. starts at $11,099,166. ...
- An individual would need to earn an average of $401,622 per year in order to join the top 1%, and a household would need an income of $570,00. ...
- The median household income was $70,784 in 2021, and $45,470 for individuals.
Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).
What is considered upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range.
What is a very high net worth individual? ›
Typically, these individuals are defined as holding financial assets (excluding their primary residence) with a value greater than US$1 million. "Very-HNWI" (VHNWI) can refer to someone with a net worth of at least US$5 million.
What percent of Americans have 500k net worth? ›
The typical American family had a net worth of $97,290 in 2016, which is the most recent data available. In other words, 50% of the population has a net worth below that threshold, and 50% has a net worth above it. People in the richest 20% are worth at least $500,000, according to Harness Wealth's data.
What state has most millionaires? ›
by state U.S. 2020. In 2020, California had the highest number of millionaire households in the U.S., with 1.14 million households having one million or more in investible assets.
Average net worth by age
| Age of head of family | Median net worth | Average net worth |
|---|
| 35-44 | $91,300 | $436,200 |
| 45-54 | $168,600 | $833,200 |
| 55-64 | $212,500 | $1,175,900 |
| 65-74 | $266,400 | $1,217,700 |
2 more rowsDec 2, 2022
With a $500,000+ income, you are considered rich, wherever you live! According to the IRS, any household who makes over $500,000 a year in 2023 is considered a top 1% income earner. Of course, some parts of the country require a higher income level to be in the top 1% income, e.g. Connecticut at $580,000.
How many people have $1000000 in retirement savings? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings.
Are most retirees millionaires? ›
The majority of retirees are not millionaires but it's possible to reach $1 million in savings if you're strategic in your approach. Getting an early start can be one of the best ways to reach your goal, as you'll have more time to benefit from compounding interest.
What is the average 401k balance for a 65 year old? ›
Average and median 401(k) balance by age
| Age | Average Account Balance | Median Account Balance |
|---|
| 35-44 | $97,020 | $36,117 |
| 45-54 | $179,200 | $61,530 |
| 55-64 | $256,244 | $89,716 |
| 65+ | $279,997 | $87,725 |
2 more rowsJan 20, 2023
The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000. The typical 70-year-old has around $105,000 in debt, including mortgages, home equity loans, credit cards and student loans, as measured by the Fed's data.
How much money do you need to retire with $100000 a year income? ›
This means that if you make $100,000 shortly before retirement, you can start to plan using the ballpark expectation that you'll need about $75,000 a year to live on in retirement. You'll likely need less income in retirement than during your working years because: Most people spend less in retirement.
Can you retire on $3 million at 60? ›
Yes, you can retire at 60 with three million dollars. At age 60, an annuity will provide a guaranteed income of $183,000 annually, starting immediately for the rest of the insured's lifetime.
What percent of US has net worth over 4 million? ›
Somewhere around 4,473,836 households have $4 million or more in wealth, while around 3,592,054 have at least $5 million. Respectively, that is 3.48% and 2.79% of all households in America.
What is the top 2 percent net worth? ›
Net Worth USA Percentiles – Top 1%, 5%, 10%, and 50% in Net Worth
- The top 1% of net worth in USA in 2022 = $10,815,000.
- The top 2% of net worth in USA in 2022 = $2,472,000.
- The top 5% of net worth in USA in 2022 = $1,030,000.
- The top 10% of net worth in USA in 2022 = $854,900.
According to Credit Suisse, individuals with more than $1 million in wealth sit in the top 1 percent bracket. The billionaire class is $2.6 trillion richer than before the pandemic, even if billionaire fortunes slightly fell in 2022 after their record-smashing peak in 2021.
What percentage of Americans have a net worth of over $500000? ›
The typical American family had a net worth of $97,290 in 2016, which is the most recent data available. In other words, 50% of the population has a net worth below that threshold, and 50% has a net worth above it. People in the richest 20% are worth at least $500,000, according to Harness Wealth's data.
What is a good net worth by age? ›
Between 35 to 44, the average net worth is $436,200, while between 45 to 54 that number increases to $833,200. Average net worth cracks the $1 million mark between 55 to 64, reaching $1,175,900. Average net worth again rises for those ages 65 to 74, to $1,217,700, before falling to $977,600 for someone over age 75.
What is the difference between rich and wealthy? ›
A rich person may derive their income from just one or two streams. For example, they may work a full-time job or run a business. Their income is typically entirely dependent on them doing some type of work to earn money. Wealthy people often have more than one stream of income.
How many people are in the 1%? ›
The United States has 325 million people—in 160 million households, as viewed by the Internal Revenue Service. That means 1.6 million households fall into the 1 percent category.
What is the top 10% income in the US? ›
Top 10% income
The average earnings of those in the top 10% were roughly $173,000 in 2020, according to a study by the Economic Policy Institute (EPI). Landing in the top 10% is a fairly attainable goal for upwardly mobile Americans.
What is a high net worth in retirement? ›
What is Considered a High Net Worth in Retirement? A high-net-worth individual or HNWI is generally anyone with at least $1 million in cash or assets that can be easily converted into cash, including stocks, bonds, mutual fund shares and other investments.
How many Americans make over $500,000? ›
The top 1% represents about 1.3 million households who roughly make more than $500,000 a year -- out of a total of almost 130 million.
