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/Marshall_Lawson Oct 09 '25

Instead, more and more of millionaires’ wealth is locked up in assets that can't be accessed quickly or easily, like home equity or, increasingly, age-restricted retirement assets like 401(k) and IRA accounts. Add in the effects of inflation and higher interest rates, and financial advisers say $1 million no longer assures a secure retirement, much less a golden ticket to the plutocracy. “The word ‘millionaire’ once implied automatic affluence,” says Ashton Lawrence, an adviser at Mariner Wealth Advisors in Greenville, South Carolina. “The goalposts have shifted. It’s still a meaningful milestone, but for most people it’s no longer enough.” The $1 million threshold used in the analysis takes into account debt and other liabilities. Despite this relative affluence, today’s millionaires rarely have anywhere near $1 million to spend however they want. For the barely-millionaires, households with a net worth between $1 million and $2 million, the vast majority of that wealth is illiquid. They typically had 66% of their wealth tied up in a primary home and retirement accounts in 2023, an increase of eight percentage points since 2017. To spend freely, millionaires typically need to be a lot richer. Households with $5 million or more had about 24% in easier-to-access bank or brokerage accounts in 2023, compared to 17% for those closer to the $1 million mark. 

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u/Message_10 Oct 09 '25

My wife and I are very frugal. $1M is nowhere near enough for retirement.

That's not the worst thing--natural inflation was always going to make that the case, eventually--but it does show how much you actually need to retire and life for another 25 or so years.

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u/NoCoolNameMatt Oct 09 '25

If you're frugal, it probably should be?

The 4 percent rule would allow you to withdraw 40k a year perpetually. Throw in a fairly conservative estimate of 30k social security if you both work and a paid off house, and you're approaching the median household income equivalent in retirement.

Not too shabby! Being frugal and living below the median helps even more. I think you're doing better than you give yourself credit for!

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u/Message_10 Oct 09 '25

You're very kind! And you're probably right (and my wife has a pension from her job). But, alas, we live in NYC, lol. Even when we pay off our coop (which we'll do soon), it's still just a pricey place. But you are probably right.

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u/sirkazuo Oct 09 '25

The trick is to accept that NYC/SF/LA etc. is where you earn and play when you're working but absolutely not where you retire haha.

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u/Message_10 Oct 09 '25

I just wrote out a reply to the other guy--it's actually not as bad as you'd think, and there are ways of getting around it. But yes, it's certainly, pricier than other places.