When $1 Million Seems Like Not Enough

When $1 Million Seems Like Not Enough, Even with a seven-figure bank account, you will never live like a millionaire, says one expert.WHO’S rich?

Occupy Wall Street has its 1 percent answer, of course. A consulting firm that studies the wealthy has a broader definition, based on millionaire status. Many financial planners have a cautionary third answer – that appearances, and account balances, can be deceiving, and you may not be as rich as you think you are.

The Occupy Wall Street forces focus more on income than on wealth. But if its 1 percent label were applied to assets, the dividing line between the 1 percent and everyone else would be $8.4 million.

Based on its research, the consulting firm, Spectrem Group, said about 8.6 million American households had a net worth of at least $1 million last year, not including their equity in a home – just over 7 percent of the 117 million American households.

George H. Walper Jr., the president of Spectrem, in Lake Forest, Ill., estimated that most of those in the low end of the millionaire class did not have most of their assets in formal retirement funds. “A lot of it is in other places,” he said, even if it is intended for retirement. Many people in that group are already retired, and their average age is 62.

People planning decades of retirement based on $1 million need to recognize that that amount is not anywhere near what it was a century ago, and that they will never live like millionaires, said Larry Luxenberg, a fee-only financial planner at Lexington Avenue Capital Management in New City, N.Y.