How Many American Households Have a Net Worth Between $100,000 and $1 Million?

As of the latest figures from the Federal Reserve's Survey of Consumer Finances, approximately 10% of U.S. households had a net worth between $100,000 and less than $1 million as of 2021. With around 128 million households in the U.S., this means that approximately 12.8 million households fall within this net worth range.

Understanding Net Worth

Net worth, which is the value of all of your assets minus your liabilities, is a key indicator of financial health and stability. When considering the household net worth range of $100,000 to $1 million, it is important to note that this group can encompass a wide range of financial situations. Many people in this range derive a significant portion of their wealth from the equity in their homes, while others might also have other forms of savings, investments, or retirement accounts.

The Makeup of Wealth in the $100,000 to $1 Million Range

Many people in this range own homes, which often contribute significantly to their net worth. The value of a home can easily exceed $100,000, especially in high-cost areas such as California, where the homeowners can have a net worth of at least $100,000, and more often, close to $1 million. Additionally, those who are close to retirement often have substantial savings in retirement accounts, which can also contribute to this net worth range.

Beyond the $100,000 to $1 Million Range

The global wealth report by Credit Suisse indicates that there are over 24.4 million people in the United States with wealth greater than $1 million. However, having a net worth of $100,000 to $1 million does not automatically place individuals in the top echelons of wealth. To enter the ultra-high net worth category, one must possess a net worth of approximately $11.1 million or more. The ultra-high net worth individuals, or millionaires, comprise about 8.8% of the American population, with an average net worth of $2.2 million according to Charles Schwab's 2022 Modern Wealth Survey.

Common Scenarios in the $100,000 to $1 Million Range

Driving through an average neighborhood in California can provide a stark illustration of the wealth in this range. For instance, a 70-year-old home with a modest yard and three bedrooms and one-and-a-half bathrooms can often have a homeowner with a net worth of at least $100,000, and often much more, especially if the homeowner is older. The value of the home can easily add up to at least $100,000, and in many cases, exceed $1 million, especially in areas where property values are high.

Here are a couple of visual examples:

These images depict the type of homes you might see in a typical neighborhood in California, where homeowners in the $100,000 to $1 million net worth range are often found.

Conclusion

While the millions in wealth are elusive for many, the $100,000 to $1 million net worth range is a significant milestone for many Americans. It represents a stable base for retirement savings, financial security, and the ability to achieve long-term financial goals. For lenders, investors, and financial planners, understanding this segment of the population is crucial for providing tailored services and products. As the economy and housing markets fluctuate, it is important to monitor these figures for updated statistics and insights.