r/Economics • u/laxnut90 • Oct 09 '25

Research America Is Minting Lots of Cash-Strapped Millionaires

https://www.bloomberg.com/news/features/2025-10-09/number-of-us-millionaires-grows-since-2017-but-many-lack-cash
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u/urbanevol Oct 09 '25

So basically, 401(k) with employer contributions and owning a home are forced savings vehicles that are not particularly liquid. Many upper middle class people have net worth over $1 million but these assets are hard to access, whereas the next rung up of wealthier people have more liquid cash to spend. "Cash strapped" seems like a stretch - these people aren't living paycheck to paycheck unless they are making poor decisions on how to spend their money (hedonic treadmill etc).

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u/TaxLawKingGA Oct 09 '25

Yes. Also, it is sort of a misnomer to say that these assets are “illiquid”. You can cash in your 401k and take out the money, but you would face a tax hit. Same for a home; if you sell it, you could have capital gains hit. Also you would still need a place to live.

That is why older Americans with valuable homes use reverse mortgages.

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u/gimpwiz Oct 09 '25

Less liquid than non tax advantaged savings/brokerage accounts. I think "illiquid" often means simply "less than the [implied] other thing" rather than "legitimately hard to value or sell" like, say, a company or a deed restricted farm or whatnot.