Mon, 25 April 2022 | investing retirement
According to a new survey of 2,209 U.S. adults commissioned by digital wealth management firm Empower Personal Capital*, only 23% of Americans who do not currently consider themselves "high" wealth believe they can achieve it . "Your net worth is a powerful financial indicator because it gives you a complete picture of your financial situation," said Michelle Brownstein, certified financial planner and vice president of Personal Capital's private client group. “This month is a good time to set goals for increasing your net worth.”
Americans say the main factors behind getting a “big” net worth are usually control over one’s finances (65%), a high salary (64%) and multiple sources of income Income (63%). But Brownstein recommends going beyond the hustle and bustle of culture to increase your net worth. “Making money is just one part of how one builds wealth,” said Brownstein, who works with wealthy clients with portfolios of at least $1 million. "It's also important to make sure your money works for you in the same way that you worked hard to make it."
Although most survey respondents (59%) agree that it's important to maintain a diversified investment portfolio, fewer (46%) prioritize maxing out retirement accounts. According to anonymous data from Personal Capital, retirement accounts like 401k plans and IRAs make up 55% of the wealth of high net worth individuals. “Tax-friendly retirement accounts are powerful investment vehicles,” Braunstein says. “As your income increases, be sure to increase the contributions to your retirement accounts—don’t let the money sit idle.”
Brownstein also suggests clarifying what constitutes your personal net worth; only 35% of Americans believe they understand what "justice" means, although the majority (91%) have heard of it. "In many cases, you don't need to be a high-income investor to reach your long-term retirement goals and needs. The key is to make a plan and have a goal you're aiming for," Brownstein says. “Most likely, this includes setting an equity goal that will allow you to maintain your lifestyle after retirement.”
Source: Personal Capital