The United States is minting more millionaires than ever, but many of them are far from living lavishly. According to a Bloomberg analysis, more than 24 million US households now have a net worth of at least $1 million—up by a third since 2017, fueled by rising home prices and a strong stock market. Statista notes that the most recent figure represents about 7% of the US population. However, that million-dollar milestone isn't what it used to be.
Much of these households' wealth is tied up in assets like home equity and retirement accounts, making it difficult to access cash quickly, per Bloomberg. In fact, households at the lower end of the millionaire spectrum—those with $1 million to $2 million—hold about two-thirds of their wealth in homes and retirement funds, an increase from 2017. Only about 17% of their assets are considered liquid, such as cash or readily sellable investments. Those with $5 million or more enjoy somewhat more flexibility, with roughly a quarter of their wealth in liquid form.
Rising interest rates have made borrowing against these assets more expensive, further squeezing so-called "paper millionaires." For example, rates on home equity loans have nearly doubled since early 2022, and margin loans for investors now start around 10% to 11%. On top of that, selling a home or cashing in investments can trigger significant transaction costs or tax bills.
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Despite the growing number of millionaires, the wealth gap persists across generations. Baby boomer millionaires have about 37% of their wealth in retirement accounts, while millennials with money have just 27% parked there. Financial planners note that while $1 million may still be life changing—especially compared to the median US household income of $83,730—it no longer guarantees long-term financial security. As one adviser puts it, having $1 million "is no longer enough." Empower has more on America's millionaires.
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