Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Most People With $1 Million Don't Consider Themselves Wealthy

By Maurie Backman - Jul 22, 2019 at 9:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Can you believe it?

Though $1 million today isn't what it used to be, it's hard to argue the fact that it's a large sum of money, and more than many people will ever see in their lifetime. But surprisingly, most people who have already gotten there agree that having $1 million doesn't exactly make you rich. In fact, only 13% of those with $1 million or more in investable assets consider themselves wealthy, according to recently released data from Ameriprise Financial.

What's funny, of course, is that many people specifically aim for $1 million in savings going into retirement, but in reality, that may not actually be as substantial a nest egg as you'd assume it would be. Many financial experts recommend withdrawing about 4% of your savings annually to ensure that those funds aren't depleted prematurely, and 4% of $1 million is only $40,000 -- far from nothing, but also not enough to travel internationally every other month or spend every night of the week out on the town.

Messy pile of $100 bills

Image source: Getty Images.

If your goal is to save $1 million for retirement, keep in mind that it may not buy you the lifestyle you think it will -- and step up your game accordingly.

Should you aim higher than $1 million?

Retirement costs the average senior $828,000, but that's over an 18-year period. If you end up living a long life, or retiring early, then there's a good chance you'll need more money than that. This especially holds true when you consider that the average healthy 65-year-old couple retiring this year will spend $387,644 on healthcare throughout their golden years, according to HealthView Services, a cost-projection software provider. Furthermore, if you have high (and expensive) hopes for your retirement, you'll need extra savings to uphold that sort of lifestyle.

The good news? If you start saving early on, you can well exceed the $1 million mark. And you don't necessarily need to go to the extreme of maxing out a 401(k) to get there (though doing so is by no means a bad idea, either).

Check out the following table. It shows how your savings could easily surpass $1 million if you give yourself a long enough window and invest wisely:

If You Start Saving $1,000 a Month at Age:

Here's What You'll Have by Age 67 With a 7% Average Annual Return:


$3.4 million


$2.4 million


$1.7 million


$1.1 million

Data source: Calculations by author.

Of course, to wind up with savings well in excess of $1 million, you'll need to not only commit to saving a substantial sum each month, but also, you'll need to invest that money in an aggressive fashion. That means loading up on stocks for maximum growth. Historically, the stock market has delivered around a 9% average annual return, so if you go heavy on stocks, you'll likely score a 7% return (if not higher).

Keep in mind, of course, that the above results won't be doable for everyone. Some people can't start setting funds aside for retirement in their early 20s, and many certainly can't part with $1,000 a month (which is still less than maxing out a 401(k), but a lot of money nonetheless). But if you are in a position to save that much (or more) on a monthly basis, and you do so from an early age, there's a good chance your retirement savings will come in much higher than $1 million if you invest your money the right way.

To have $1 million not be considered wealthy may be laughable to some, so remember this: If you manage to amass $1 million, whether in a retirement account or someplace else, consider it a huge accomplishment. Though $1 million can't buy you what it did back in the day, it's still something to be proud of.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.