What does it actually feel like to be wealthy? Millionaires says its not about being rich

We’ve seen it time after time, someone has a lot of money, something goes wrong, they lose a lot of money. Did they ever really feel ‘wealthy’?

Perhaps not, according to nee research that asked American millionaires about their wealth and how they think about their long term financial security.

Simply having a million dollars is not enough to make most respondents to the Northwestern Mutual survey feel wealthy, just 32% said it did, while most said that having confidence and clarity about the future is a bigger part of feeling wealthy than being rich.

And that usually involves a financial plan.

“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,” said John Roberts, chief field officer at Northwestern Mutual. “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."

Almost seven in ten millionaire respondents (80% of whom said they are self-made) work with a financial advisor compared to 33% of the general population, and 78% of millionaires said they are disciplined financial planners compared to 45% of the wider cohort.

Millionaires are also more likely to have a will, to have taken steps to address the possibility of outliving their savings, and to have talked to their family about inheritance plans.

"The path to wealth in America is more often paved by financial planning and persistence than luck or family lineage," said Roberts. "For anyone just starting out, it should be exciting to see that the American Dream still lives and that the right money moves can help people to build and protect their wealth. Moreover, it's clear that inherited wealth is not indefinite wealth. Growing up affluent does not necessarily lead to financial security. An inheritance alone is not enough; having a plan to put that money to work is essential. It's important to act intentionally, put measures in place, invite your extended family to the table with an advisor, and begin to have those financial planning conversations early."

RETIREMENT QUESTIONS

The survey also asked about retirement planning and the top questions that millionaires have, with the top three revealed as:

• "How will taxes impact me?"
• "How much money will I need to retire comfortably?"
• "Is it possible I could outlive my savings?"

Their top five strategies to reduce the amount of tax payable on their retirement savings are:

1. Making withdrawals strategically from traditional and Roth accounts to keep yourself in a lower tax bracket (44%)
2. Using a mix of traditional and Roth retirement accounts (37%)
3. Making charitable donations strategically, for instance taking advantage of bunching itemized deductions (27%)
4. Using a Health Savings Account (HSA) or other tax-advantaged healthcare account (24%)
5. Using products like permanent life insurance or annuities for their tax benefits (24 %)