A few decades ago, if you reached that magical million dollar level, you would have made it. You were rich. But these days, with costs skyrocketing and social media awash with luxury highlights, it can seem like everyone has a million in their pocket. The truth? That is more illusion than reality. As financial guru Dave Ramsey put it, “8 out of 10 people probably can’t afford the house they live in and the car they drive.”
Don’t miss:
Social media has a tendency to magnify what appears to be wealth, leading to the widespread perception that everyone is swimming in money. But take a look behind the scenes and it’s clear that not as many people have cash as it seems. So let’s break it down: How many Americans have a net worth of $1 million or more?
Spoiler alert: there aren’t as many as you might think
According to the Federal Reserve’s 2022 Survey of Consumer Finances, only about 12% of U.S. households have a net worth above $1 million. This means that the vast majority – 88% – are nowhere near that level. Keep in mind that this is the net worth of the household, which likely assumes a two-person income and combined assets.
Wealth is highly concentrated, and while the average net worth of American households is $1.06 million, the average net worth is much lower: $192,700. Translation: A few very wealthy households drive up the average, but most people are much closer to that average.
Trending: ‘Beating the market through ethical real estate investing’ — this platform aims to give renters equality in the homes they live in while delivering an average annual return of 17.38% for investors – here’s how you can get involved with just $100
Where are the millionaires?
Certain states and age groups stand out because of their context. For example, New Jersey has the highest percentage of millionaire households, with approximately 9.76% of homes there having a net worth of more than $1 million. In terms of age, those between 65 and 74 have the highest average net worth at $1.2 million, but the median for that same group is only $266,400. In other words, while some retirees have saved a lot, many are just making ends meet.
401(k) balances tell a similar story. The average 401(k) balance for Americans age 65 and older is $272,588, but the median is just $88,488 — meaning half of people have less than that amount saved.
