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Americans don’t feel rich with $1 million these days.
Only about one-third, or 32%, of Americans with at least $1 million in investable assets consider themselves “wealthy,” according to new findings from financial services firm Northwestern Mutual published Wednesday. Investable assets include anything someone owns that can be turned into cash and invested, including cash itself, bonds, and retirement accounts.
That’s in line with the results of a recent survey from Charles Schwab, which found that Americans now believe they need $2.5 million to be considered wealthy — up from $2.2 million two years ago. Meanwhile, Americans said they need an average net worth of $778,000 to feel “financially comfortable,” down from a peak of $1 million last year.
“For most Americans, ‘feeling like a million bucks’ is less about believing you’re rich and more about exuding confidence and clarity about the future,” John Roberts, chief field officer at Northwestern Mutual, said in a statement.
With prices for everything from groceries to housing continuing to rise, as well as record debts and stagnating salary growth, Americans continue to feel less well off than they did prior to the pandemic.
While American millionaires don’t necessarily feel rich, they do feel a greater sense of financial clarity and preparedness than the general population, according to the Wisconsin-based financial services firm. A vast majority of people with at least $1 million in investable assets feel confident about their financial planning for the future.
Still, nearly half of American millionaires surveyed by Northwestern Mutual believe that their financial plans need improvement.
401(k) millionaires
There are many ways to become a millionaire. For some, that includes the nest egg they’re building for retirement.
In the second quarter, the number of 401(k) accounts with at least $1 million rose 2.5% to 497,000 — another record quarter of 401(k) millionaires, according to Fidelity Investment’s latest retirement analysis report released last week.
Total average 401(k) savings rates grew slightly to 14.2%, thanks to employee and employer contributions remaining at the prior quarter’s record levels, Fidelity said. This savings rate is the closest it has ever been to Fidelity’s suggested 15%.
But savings figures across the board continue to fall short of the amount Americans actually believe they’ll need to retire comfortably. That figure, known as the “magic number,” hit $1.46 million this year, according to Northwestern Mutual.