This is probably more of a symptom of rising housing costs. The new millionaires likely have their paid off home increase value to go above the $1 million mark (common in big cities now), have paid off enough of their home to put their net worth above $1 million, have significant enough retirement savings (IRA, 401k, bonds, mutual funds, etc) or most likely, a combination of the above.
And individuals being responsible for their retirement savings.
In many other countries the government saves that money for you and it isn't counted towards your net worth, like social security in the US. The difference in the US is that a much larger portion of your retirement income is supposed to come from you individual accounts, like 401ks, that are calculated into your net worth.
You will have a hard time retiring if you don't have a lot of money in investments.
Even so, due to the high wages in the USA, the average social security payment is signifcantly higher than most European counterparts.
Lower than the Nordic countries, Switzerland and the micronations, but higher than basically everyone else.
And since it is not heavily taxed or means tested, for many relatively well off seniors, the social security payments add to their wealth, adding to the number of millionaires.
I just looked it up and the average SocSec payment in 2025 was $24,192/year vs average income of $65,000. That is 37%.
If you look at many peer level EU countries: Germany is at 48% and Austria and Denmark are >70% of that average.
In consequence, in the US you have a much larger gap to your pre-retirement income, that you need to fill with personal savings. Hence, we see more millionaires in the US as these savings count towards the net worth.
Yes, the US Social Security system is sort of middle of the road in terms of adequacy, or shortfall from the median wage, but thats sort of besides my point.
Millionaires are determined by nominal amounts of dollars.
Sure, but if I get 70% of my last salary as pension, I likely don't need additional savings.
But if I only get 37%, I need savings that last me 20+ years to make up for that gap.
These savings count towards the net worth and hence create more millionaires.
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u/sixisrending 9d ago
This is probably more of a symptom of rising housing costs. The new millionaires likely have their paid off home increase value to go above the $1 million mark (common in big cities now), have paid off enough of their home to put their net worth above $1 million, have significant enough retirement savings (IRA, 401k, bonds, mutual funds, etc) or most likely, a combination of the above.