What Percentage of Americans Have $1 Million in Savings?
Explore the prevalence of substantial financial assets among US households and how this benchmark reflects broader economic realities.
Explore the prevalence of substantial financial assets among US households and how this benchmark reflects broader economic realities.
Having $1 million in savings represents a significant benchmark of financial success and security for many in the United States. This monetary milestone sparks curiosity about wealth distribution and how many people achieve such a status. Understanding its prevalence requires examining various data points and definitions.
The United States is home to a substantial number of individuals and households with a net worth of $1 million or more. As of 2023, estimates indicate the U.S. had just under 30 million millionaires. This figure demonstrates a significant increase over time, with the U.S. millionaire population growing by 62% over the past decade, outpacing the global average.
Recent data from the Federal Reserve highlights this trend, showing that the average net worth of American families surpassed $1 million for the first time in 2023, rising 42% from 2019 to 2022. The percentage of households with a net worth of at least $1 million (in 2022 dollars) increased from 2019 to 2022. As of recent Federal Reserve data, roughly 18% of U.S. households, approximately 23.7 million households, were millionaires.
The term “millionaire” commonly refers to an individual whose net worth is $1 million or more. Net worth is calculated by subtracting total liabilities from total assets. This comprehensive measure includes a wide array of assets such as real estate equity, investment portfolios, retirement accounts like 401(k)s and IRAs, and cash holdings. For instance, if a home is valued at $1 million but carries a $700,000 mortgage, only the $300,000 in equity contributes to net worth.
It is important to distinguish net worth from “savings” or “investable assets.” While savings accounts contribute to net worth, the $1 million milestone typically encompasses all forms of wealth. Investable assets specifically refer to liquid or near-liquid assets that can be easily converted to cash and invested, such as stocks, bonds, mutual funds, and cash in brokerage accounts. Assets generally excluded from investable assets, but included in net worth, are primary residences, vehicles, and personal belongings. Different financial reports may use varied definitions; some analyses exclude the value of a primary residence from the calculation.
Millionaires in the United States often exhibit discernible demographic patterns, though wealth accumulation paths are diverse. Age plays a significant role, with net worth generally increasing as individuals mature and advance in their careers. While only about 1% of families under 35 years old have achieved millionaire status, this percentage rises considerably for older age groups. For example, 21% of families aged 55 to 64 are millionaires, and this trend becomes even more pronounced among college graduates in that age bracket, with 45% reaching millionaire status.
Education also correlates with wealth accumulation. A large majority of millionaires, around 88%, hold a college degree, with over half (52%) having earned a master’s or doctoral degree. Many millionaires are self-made, with only a small percentage (around 3%) having inherited $1 million or more. Common professions or industries associated with wealth include business ownership, various professional fields, and investment. Geographically, wealth tends to be concentrated in certain areas, with states like New York and California holding a disproportionately high share of extreme wealth.
The presence of millions of millionaires in the U.S. must be viewed within the broader context of national wealth distribution, which is notably unequal. Wealth distribution describes how total wealth is allocated across different segments of the population. Federal Reserve data from late 2021 indicates that the top 1% of households held 30.9% of the country’s wealth, while the bottom 50% collectively held only 2.6%. This disparity highlights a significant concentration of wealth at the upper tiers.
While a net worth of $1 million is a substantial achievement, it represents a specific tier within this unequal distribution. For instance, in 2022, the median household wealth in the U.S. was $162,350. The 90th percentile of household wealth, meaning households wealthier than 90% of the population, was $1,623,000 in 2021, placing the $1 million threshold within the top 10% of households. The wealthiest families, those in the top 10%, held 67.2% of total household wealth on average.