Schwab's survey showed Americans' conception of being rich means having a net worth of $2.2 million. This number represents a $300,000 increase from the survey's results last year. Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million.
To feel wealthy, Americans say you need a net worth of at least $2.2 million on average, according to financial services company Charles Schwab's annual Modern Wealth Survey.
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
$2 million should afford you to enjoy a comfortable and happy retirement. If you choose to retire at 50, a retirement savings fund of $2 million would provide you with $50,000 annually. If you want to manage your finances and get ready for retirement, a trusted financial advisor can help.
The 95th percentile, with a net worth of $3.2 million, is considered wealthy, facilitating estate planning and possibly owning multiple homes. The top 1%, or the 99th percentile, has a net worth of $16.7 million and represents the very wealthy, who enjoy considerable financial freedom and luxury.
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
In 2020, according to Pew Research Center analysis, the median for upper income households was around $220,000 and the median for middle income households was slightly above $90,000.
With an average income, you can expect it to last 35 years or more. However, everyone's retirement expectations and needs are different. It's important to evaluate whether the money you have saved is enough to fund the lifestyle you want and for how long.
Among the 47 million households headed by someone age 60 or older, 7% had household investable assets of at least $2 million, Drinkwater said. Only 6% of the 89 million households in the U.S. headed by someone 40 to 85 years old has that amount, Drinkwater said.
If you have multiple income streams, a detailed spending plan and keep extra expenses to a minimum, you can retire at 55 on $2 million. However, because each retiree's circumstances are unique, it's essential to define your income and expenses, then run the numbers to ensure retiring at 55 is realistic.
How much more than average income would be considered “rich?” One common indicator is being in the nation's “top 1%” of earners. According to the Economic Policy Institute, those include Americans who earn at least $421,926 a year—but their average annual income is far higher: $1,316,985.
Americans need at least $2.2 million in assets to be considered rich, according to Charles Schwab's 2023 Modern Wealth Survey. The investment platform surveyed 1,000 Americans to determine the average net worth required to be considered wealthy in America.
The 95th percentile is considered wealthy, with $3.2 million household net worth, so even more spending power, which means estate planning and possibly more than one home. And the 99th percentile is very wealthy, with $16.7 million in net household worth, Schmidt says.
The Sept. 8 report said the minimum annual income required in 2023 for a family of four to be middle class in California is $69,064. Alabama and Arkansas both required the lowest minimum income to be considered middle class, at $51,798.
You need to have $2.2 million to be wealthy, according to a Charles Schwab survey of 1,000 Americans. But respondents who said they personally felt wealthy had, on average, $560,000 in total assets. 67% of boomers said that time was more important than money compared to 56% of millennials.
Retiring at 40 with $2 million is possible, though it is a lofty goal, especially if you don't have a large inheritance or some other windfall. But it can be done if your income is high sufficient and if you are aggressive with your savings strategy.
The Bottom Line. At age 55 with $2 million in the bank, you are well positioned to retire early. Just make sure that you anticipate the complicated issues around early retirement, including long-term inflation hedges and health insurance.
What is the average and median retirement savings? The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances.
Here's how much a $2 million portfolio can generate based on various withdrawal rates: At a 2% withdrawal rate, that's $40,000 a year in income. A 3% withdrawal rate is $60,000 a year in income. And a 4% withdrawal rate is $80,000 a year in income.
As a general rule, most retirees and pre-retirees underestimate what their expenses will be. A $2 million nest egg is substantial and can provide financial security for many couples, but whether it's enough for you depends on various factors.
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more. However, there's a surprising amount of information to unpack.
According to Schwab's 2023 Modern Wealth Survey, its seventh annual, Americans said it takes an average net worth of $2.2 million to qualify a person as being wealthy.
You might be surprised to learn, then, that there are approximately 22 million millionaires in the U.S.