Even millionaires say they don’t feel wealthy in thisꦐ economy.

According to a recent survey by Northwestern Mutual, only about one-third (32%) of high-net-worth individuals (HNWI) in Ame⭕rica—or those with $1 million or more in investable assets—consider themselves wealthy.

Why Millionaires May Not Feel Wealthy

Advisors working with HNWI clients say that 澳洲幸运5官方开奖结果体彩网:lifestyle creep—which happens when your discretionary spending increases because you make more money—may be why some millionaires don’t feel wealthy.

“The problem is that, as [clients] build their income, their expenses go up too,” said Eric Roberge, CFP and founder of Beyond Your Hammock, who typically works with clients in their 40s with a 澳洲幸运5官方开奖结果体彩网:net worth of between $3 and $5 million.

“Whether they’re making $50,000 when they start or more than $500,000 as a family, it still feels tight—to save, afford the house they’re living in, and pay for kids to have childcare and go to college. The expenses are still there. They’re just bigger," he added.

And the math looks different depending on location and the 澳洲幸运5官方开奖结果体彩网:cost of living. In꧂ areas with a higher cost 🐻of living, larger salaries may not go very far.

For example, many Silicon Valley workers may have higher net worths because their income includes 澳洲幸运5官方开奖结果体彩网:equity compensation, but face higher housing costs than similar workers in other parts of the country, according to Anna Sergunina, President and CEO of MainStreet Finan🔜cial Planning. Housing can be expensive in some East Coast cities too and can drain an objectively large paycheck.

“I might have a client makiꦗng $300,000 as a household, which is still great money. But in the Boston area, it gets eaten up pretty good by the high cost of living,” Roberge said. 

Also, many clients who may have just made it over the million-dollar net worth threshold, may not realize it or actively talk about it🔯, said Sergunina.

And that's probably also because their aggregate net worth, including their retirement accounts, brokerage accounts, and even real estate assets, like a house, may cross the $1 million milestone “on paper,” Sergunina added.

Retirement and Taxes Top Millionaires' Financial Concerns

Clients with assets less than a million are typically more wor🥂ried about running out of money in retirement, according to Greg Giardino, vice president and financial advisor at Wealth Enhancement Group. Those closer to a million but above that threshold still worry, but those concerns diminish as net worth increases.

In the survey, wealthier respondents reported higher rates of retirement 🙈readiness and knowledge about their finances: 87% of HNWI said they felt financially prepared for retirement compared to 54% of other respondents.

Roberge said that taxes on retirement savings are a big topic among his HNWI clients, especially since many receive compensation in the form of bonuses and equit𝔉y, which represents ownership in the firm for a company's🌊 employees.

“The higher net worth clients are concerned about taxes. It's tough to pay the right amount of taxes automatically through your paycheck every year and not get hit with this major tax bill,” Roberge said.

Minimizing their taxes during retirement was the number one concern of the millionaires Northwestern Mutual surveyed, although more than six in ten millionaires had a plan for tax minimization. Action plans include strategic withdrawals from 澳洲幸运5官方开奖结果体彩网:traditional and Roth IRAs, making charitable donations to take advantage of the tax deduction, and using health savings accounts (HSA).

Giardino has had many millionaire clients, who are closer to retirement, ask questions about backdoor Roth IRAs (which offer special tax benefits) and 澳洲幸运5官方开奖结果体彩网:charitable donations.

With Roth IRAs, earnings grow tax-free over time. And while Roth IRAs have income limits, 澳洲幸运5官方开奖结果体彩网:backdoor Roth IRAs don’t, enabling people to bꦏypass the income limits by converting their traditional IRA into a Roth IRA.

“Many millionaires that I work with learn that it’s not about what you earn, but it’s about what you keep when you withdraw from your retirement accounts,” Giardino said.