The Percentage of Americans with a Net Worth of Over $1 Million

Net worth, a measure of total assets minus total liabilities, plays a significant role in understanding wealth distribution in the United States. While it's natural to seek answers to questions like, 'What percentage of Americans have a net worth of over $1 million?', the data provided by the Internal Revenue Service (IRS) offers a clearer picture of this phenomenon.

Understanding Net Worth

Net worth is a comprehensive measure that includes assets such as cash, investments, real estate, and other sources of wealth, minus liabilities such as mortgages, loans, and other debts. It is not limited to just income, but rather reflects overall financial health.

Population and Tax Filers

The United States has a population approximating 332 million as of the latest data. However, when considering tax filers, the total is slightly lower. According to IRS data, about 162 million Americans file tax returns each year. This figure excludes children, recognizing that tax filers count as individuals, including those who file jointly.

Millionaires in the U.S.

Based on this data, we can estimate the percentage of Americans with a net worth of over $1 million. Some key figures to consider:

Approximately 24.5 million Americans have a net worth of over $1 million, accounting for roughly 7.4% of the total population (332 million). Considering households, around 131.4 million households are estimated in the U.S., and about 19% or 25.0 million household members have a net worth exceeding $1 million. As of the end of 2022, it was estimated that approximately 22.7 million people had a net worth of over $1 million, representing around 6.8% of the population.

This data reflects the wealth disparity in the country, suggesting that a relatively small percentage of the population holds a significant portion of the nation's overall wealth.

Who Are These Millionaires?

Identifying who these millionaires are adds depth to the conversation. While some millionaires include:

Business Owners: Entrepreneurs and small business owners often achieve million-dollar net worth through steady growth and investment. Assuming their property is worth something, they can still be considered millionaires. Retirees: Those who have dedicated significant time to investments, such as stocks, bonds, and real estate, can accumulate substantial wealth over decades. Farmers: The equipment and land owned by farmers can contribute to a significant net worth. However, they may argue they are “working poor” due to cost-heavy operations.

These individuals are part of the 162 million tax filers who contribute to the wealth dynamics of the country.

The Top 5 Percent

Being among the top 5% of the population in terms of net worth requires a net worth of over $19.6 million. This category includes a small fraction of the population, yet it still holds considerable influence.

Conclusion

Understanding the distribution of net worth in the United States is crucial for policymakers, investors, and individuals looking to manage their own wealth. The data suggests that a relatively small portion of the population holds a significant amount of wealth, highlighting the concentration of wealth in the country.