Looking at national wealth statistics can be eye-opening, and sometimes a little unsettling. Headlines often suggest that millionaires are common in the United States, giving the impression that retirement security is within reach for many.
According to Bloomberg, over 24 million U.S. households have a net worth exceeding $1 million, representing more than 18% of all households. At first glance, it seems like one in five households could retire comfortably at any time.
However, the reality is more complicated once the types of assets are considered.
Paper Wealth vs. Real Access
True financial security is less about the number attached to net worth and more about how easily those funds can be accessed when needed. Liquidity—the ability to quickly convert assets into cash—is a central factor in determining how wealthy someone actually is.
Consider this example: someone might have $1 million, but if most of it is in assets that are expensive or difficult to sell, that person is a millionaire only on paper. The value is there, but it doesn’t translate to immediate financial flexibility.
By contrast, $1 million in investments that can be sold quickly with minimal taxes or fees is real wealth—funds you can actually rely on. This kind of liquidity provides confidence and options that aren’t tied to your house.
The Role of Home Equity
Freepik | Most U.S. household savings are concentrated in home equity rather than liquid assets.
Much of U.S. household wealth sits in primary homes, which are hard to access quickly. While homeownership is a cornerstone of the “American dream,” it can create a misleading sense of security. Pew Research shows that, excluding home equity, the median household net worth in 2021 was just $57,900—far from enough for a comfortable retirement.
Options like downsizing or taking a home equity loan exist, but they carry costs and lifestyle consequences.
Liquid Millionaires in the U.S.
Henley & Partners finds just 6 million liquid millionaires in the U.S.—roughly 2.2% of adults. Even among older Americans, achieving the $1.3 million often cited for a comfortable retirement is rare. Only 9.2% of adults 55–64 have retirement accounts over $1 million, excluding their homes.
Planning for Liquidity
Freepik | Bridge retirement shortfalls by weighing downsizing or equity loans with professional guidance.
Relying too heavily on home equity makes retirement planning riskier. Gradually converting savings into liquid, cash-flowing assets is critical. Tax-advantaged accounts like 401(k)s and Roth IRAs help long-term security, while brokerage or high-yield savings accounts maintain short-term flexibility.
Strategies like downsizing or equity loans are viable, but lifestyle, costs, and taxes must be weighed. True wealth comes from assets you can access when needed, not just numbers on paper.