Reading the nation’s wealth statistics can cause financial anxiety. After all, mainstream statistics suggest that being a millionaire in America is relatively common.
More than 24 million US households have a net worth of more than $1 million, according to Bloomberg. (1) That is more than 18% of all households. (2)
On the surface, it looks like one in five households are thriving and could retire whenever they want. However, dig deeper and you’ll discover why so many families struggle financially, even though they’re officially in the seven-figure club.
Real financial security isn’t about how much you own on paper, but how easily you can access money when you need it.
Liquidity – or your ability to easily buy or sell an asset – is a key component of wealth.
For example, if you have $1 million, but almost all of it is tied up in an asset that is difficult and expensive to sell, you are only a millionaire on paper. This is not an asset to rely on during a sudden emergency or to confidently estimate net earnings after taxes and expenses.
By comparison, if you have $1 million invested in an asset that you can unload in a single day and pay minimal fees and transaction costs, that money probably feels more like genuine wealth.
Unfortunately, much of the American household’s wealth is tied up in a relatively illiquid asset: the family home. For many ordinary families, home ownership is synonymous with the “American Dream,” which is why so much of their savings and investments are dedicated to building equity.
This obsession with property can mean that other possessions are neglected. As of 2021, the median household net worth, excluding home equity, was just $57,900, according to Pew Research. (3)
Not only is it significantly less than the seven-figure threshold. It’s also not close enough for a comfortable retirement.
While it’s technically possible to tap into retirement equity, perhaps by downsizing or using home equity loans, there are practical limitations to these approaches. After all, you still need a place to live if you’re selling the family home.
With this in mind, British consulting firm Henley & Partners uses a measure of net worth that excludes the value of a household’s primary residence.
According to its latest report, there are only six million liquid millionaires in the US (4) That’s about 2.2% of the country’s adult population, based on 2024 census estimates. (5)
In other words, only one in 45 US adults is truly wealthy and well-prepared for a comfortable retirement.
In theory, retirees or future retirees should make up part of this group. Americans think they need about $1.3 million to retire comfortably. (6) However, in reality, few of them achieve this goal.
According to a study by the Congressional Research Service, 9.2 percent of adults ages 55 to 64 have more than $1 million in retirement accounts, excluding home equity. (7)
Read more: This is the quiet portfolio shift many wealthy investors are making in 2026. Should you consider it too?
Leaving most of your wealth trapped in your home is probably not the best idea. Not only is it riskier to have all your eggs in one basket. It’s also difficult to retire while depending on an asset that doesn’t generate cash flow every month.
To make your financial future and eventual retirement more comfortable, consider gradually shifting more of your savings to other assets.
For retirement, invest through tax-advantaged accounts like 401(k)s and Roth IRAs. And for the money you need before then, invest through regular brokerage accounts or park savings in accounts that pay a higher return than inflation.
If you’re approaching retirement with little or no liquid investments, adjust your long-term plans accordingly. Perhaps you could include a potential home equity loan in your retirement plan, or eventually sell your home and free up cash by downsizing to a smaller, more affordable one.
Consider the impact of an extra monthly rent or interest payment on your retirement budget. Work with a tax planner or financial expert to determine and account for all transaction costs and tax liabilities associated with these strategies.
Understanding your net worth on a deeper level could be the key to peace of mind and financial well-being.
We only rely on verified sources and credible third-party reports. For details, see our ethics and editorial guidelines.
Bloomberg (1); Census Reporter (2); Pew Research Center (3); Henley & Partners (4); United States Census Bureau (5); Northwestern Mutual (6); Plan Sponsor Council of America (PSCA) (7).
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
