What’s it like to feel like a million bucks? Millionaire investors say it’s all in having a confident financial attitude, even if they’re still working on strategy.
A new 2024 Planning and Progress Study by Northwestern Mutual surveyed high-net-worth clients with over one million in investable assets, finding that 87% of millionaires surveyed expect to be financially prepared for retirement, compared to 54% of the general public. Furthermore, another 87% believe they have clarity on their spending and savings levels, whereas 66% of the general public say they do.
This group was also likelier to have a long-term financial plan (84% vs. 52%), know the amount of money they would need to retire comfortably (77% vs. 44%), and were likelier to consider themselves as “disciplined financial planners” (78% vs. 45%). Still, nearly half (48%) say their financial plan needs improvement, and only 32% would classify themselves as “wealthy.”
While being a millionaire could be helpful in achieving a secure retirement, Northwestern Mutual argues that a successful retirement strategy is accessible to all.
“For most Americans, ‘feeling like a million bucks’ is less about believing you’re rich and more about exuding confidence and clarity about the future,” said John Roberts, chief field officer at Northwestern Mutual. “But for many millionaires, money alone doesn’t create clarity – financial plans do. When people have a comprehensive plan that’s custom-built for their life, and an advisor who helps them to see their opportunities and blind spots, feelings of anxiety fall and feelings of security rise. It’s about having a plan to enjoy today without sacrificing tomorrow. These feelings are not reserved for only wealthy Americans. It’s accessible to everyone.”
Northwestern Mutual points to existing advisor relationships for the boosted confidence among high-net-worth clients. More than double the number of millionaires (69%) worked with a financial professional compared to the general population (33%). These clients were likelier to know the amount of money needed to retire comfortably (81% vs. 70% without an advisor), have a good understanding of inflation’s impact to retirement (83% vs. 70%), have a plan for healthcare costs in retirement (83% vs. 69%), and understand how taxes could impact their retirement (80% vs. 67%).
Still, when asked about their top questions regarding retirement, millionaires really wanted to understand how their taxes could impact their lifestyle in the long-term. Six in 10, or 61%, say they plan to reduce the taxes they will owe in retirement savings by making withdrawals strategically from traditional and Roth accounts to keep themselves in a lower tax bracket (44%), use a mix of traditional and Roth retirement accounts (37%), or use a health savings account (HSA) or other tax-advantaged healthcare account (24%), among other options.
Respondents, whether high-net-worth or not, were likelier to trust their advisors with their finances far more than any other source. Fifty-nine percent of millionaires pointed to advisors as their most trusted source compared to 33% of the general public. This was an overwhelming number compared to just 6% of millionaires who trust their family members, 9% who trust their spouse or partner, 7% who look to business news, and 3% who go to friends for financial advice. Just 4% place their trust in online financial influencers and social media sites, 3% turn to trade associations, and 1% listen to local news.
“Many Americans have a high regard for the expert advice they receive from a financial professional, but for wealthy Americans, that trust is even more significant,” said Roberts. “These licensed practitioners ask deep questions, analyze the pieces of clients’ financial lives, design plans that are tailored to people’s goals, and work with them to achieve each one.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.