Commentary

Millionaire Households Still 5% Of All Households

According to the annual Wealth & Affluent Monitor published by the Phoenix Marketing International social team, the number of millionaire households in the United States has grown by more than 800,000 over the past five years and by more than 1.3 million since 2006, before the financial crisis.The overall wealth market is growing, yet the ratio of millionaires to total U.S. households has remained relatively flat and wealth is more concentrated and shifting geographically.

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Wealth and Affluent Market Distribution (95% of Total)
Boomers (1946-1964)   55%
Gen X (1965-1979)         17%
Silents (1901-1945)       15
Millennials (1980-2000)     13
Data Source: Phoenix Marketing International Households with at least $100K in investable assets… (read as: boomers comprise 55% of the wealth and affluent market)

The 2016 Phoenix Wealth & Affluent Monitor shows that as of mid-2016:

  • Nearly 6.8 million U.S. households, approximately 5.5% of all U.S. households, had $1 million or more in investable assets, representing nearly one-quarter of a million more households than in 2015
  • Over the past five-year and 10-year periods, the ratio of millionaire households to total U.S. households has remained relatively flat, up from 4.8% in 2006 and 5.1% in 2011
  • Households with at least $1 million in investable assets hold approximately $20 trillion in total liquid wealth, or approximately 59% of total liquid wealth in the U.S
  • Within the wealth segment, the greatest asset growth was among households with between $1 million and $10 million in investable assets. Their investable assets grew by $809 billion, to a total of $17.8 trillion
  • By comparison, there are 16.4 million households in the broad affluent market (with between $250,000 and $1 million in investable assets). They control 35% of total liquid wealth in the U.S.
  • The 14 million near-affluent households in the U.S. (with between $100,000 and $250,000), saw investable assets decline by $79 billion between 2015 and 2016, to $2.6 trillion
  • The concentration of wealth in the U.S. continues to deepen as the top 1% of wealthiest U.S. households now holds 24% of liquid wealth. Non-affluent households, representing 70% of U.S. households, control less than 10% of the nation’s liquid wealth

David Thompson, Managing Director, Affluent Practice, at Phoenix Marketing International, says “… the research reveals stark geographic, demographic and economic differences within the broad wealth and affluent market… reinforcing the need for more precise segmentation and… targeted, relevant messaging… the trends… over the past 10 years show a deeper and wider wealth divide… families in the near and emerging affluent segments… falling further behind financially…”

In 2016, there were few changes among the top 10 states ranked by the ratio of millionaire households to total households. The states with the greatest gains in the rankings are Utah (#17), Michigan (#29), Arizona (#30) and Ohio (#31), each of which rose five places from 2015.

The top 10 millionaire household states are (% of Total):

  1. Maryland (7.55%)
  2. Connecticut (7.4%)
  3. New Jersey (7.39%)
  4. Hawaii (7.35%)
  5. Alaska (7.15%)
  6. Massachusetts (6.98%)
  7. New Hampshire (6.82%)
  8. Virginia (6.64%)
  9. District of Columbia (6.32%)
  10. Delaware (6.28%)

An analysis by Phoenix reveals more significant shifts and regional impact of the financial crisis, recession and slow recovery of jobs and wages over the past 10 years. For example,

  • Michigan ranked #18 in 2006, but by 2011 had dropped to #26 and, despite recent growth, ranked #29 in 2016
  • Florida ranked #10 in 2006, but by 2011 had dropped to #19 and ranked #32 in 2016
  • New York ranked #13 in 2006 but rose to #12 by 2011 before dropping to #18 in 2016 as the disparity in wealth, particularly between upstate and downstate, became more prevalent
  • Meanwhile, the District of Columbia, which ranked #9 in 2006, dropped to #20 at the outset of the financial crisis but has bounced back to its pre-recession ranking at #9 in 2016.

Approximately 70% of the wealth and affluent market is comprised of Americans age 52 or older who have at least $100,000 in investable assets. Baby Boomers account for 55% of the market while the Silent Generation represents 15%. Approximately 13% of the wealth and affluent market now is composed of the Millennial generation, who are age 36 or younger. They are gaining on the members of Generation X, which make up the remaining 17% of the market, and who are faced with financial challenges of aging parents and education costs for their children.

For additional information from Phoenix, please visit here.

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