If the Average American Saved at the Rate of the Richest 1%, How Long Would It Take To Reach $1 Million?
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Jordan Rosenfeld
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Molly Sullivan
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The richest 1% may seem to be proof that having more money to save is guaranteed to create wealth. But what would happen if the average American saved at the same rate as the ultra-wealthy?
Financial experts said the answer depends on far more than discipline alone and that even dramatic changes in saving behaviors don’t guarantee a quick path to $1 million. The answer to how long would it take is more complex than it seems.
How Much the Richest 1% Actually Save Each Year
First, it’s important to look at how much the average American household and the wealthiest households save each year. While popular advice often focuses on budgeting tweaks, the truth is that the rich understand that wealth compounds over time, according to Andrew Latham, a certified financial planner and content director at SuperMoney.
“The top 1% usually save or invest 40% to 50% of their incomes. That includes retirement contributions, brokerage accounts and other investments,” he said.
Really, it’s not just “saving” that money, said Srbuhi Avetisyan, research and analytics lead at Owner.One, which studies high-net-worth and ultra-high-net-worth families globally. “The richest 1% often reinvest that income and then let time in the market and compounding interest do its work,” she explained.
How That Compares To the Average American’s Savings Rate
For most Americans, saving anywhere near half of their incomes is simply not realistic. While financial planners recommend saving between 10% and 15% of your income, it’s more often like 3% to 7%, Latham said, a gap that explains “the difference in long-term wealth.”
Of course, most people aren’t failing to save because of lifestyle choices, Avetisyan said, “they’re constrained by volatile income, rising fixed costs and limited tax-efficient investment access.”
How Long Would It Take To Reach $1 Million at the 1%’s Savings Rate?
If an average earner suddenly adopted the savings habits of the richest 1%, they might be surprised to learn that the timeline to $1 million would still depend heavily on income level and investment returns.
Latham offered one scenario: “If someone earning $60,000 saves 40% ($24,000 per year) and invests it with a 7% return, they could reach $1 million in about 19 years,” he said.
Avetisyan pointed out that an average earner could still require decades to earn $1 million, even if they increased their savings rate (not dollars, but rate) to that of the top 1%.
Why Investing Matters More Than Saving Alone
Growth is the key to wealth. “Wealth is built through compounding returns, not accumulation in cash,” Avetisyan said.
Latham highlighted this difference, pointing out that merely saving $24,000 a year without investing would take over 40 years to reach $1 million. While, with a 7% annual return, it would only take about 19 years.
What Income Makes a Sub-20-Year Timeline Possible
Even with a high savings rate, income determines how quickly wealth can grow without extreme sacrifices, Latham noted. “To reach $1 million in under 20 years without making extreme cuts, someone would likely need to earn at least $90,000 to $100,000 and save consistently,” Latham said.
Avetisyan also clarified that the gap between the average American and the richest 1% isn’t just due to discipline or higher income. “High-net-worth households don’t just save more; they convert income into assets earlier,” she said.
The Biggest Roadblocks Holding Most Americans Back
Of course, none of this is simple. Structural barriers make it difficult for most households to save and invest at 1% levels, Latham said.
“The biggest barriers are rising costs of housing, healthcare and education, along with lifestyle creep, debt and lack of financial education,” Latham added.
How Taxes, Employer Plans and Automation Speed Things Up
While most people can’t replicate the income of the top 1%, they can adopt systems that increase how efficiently their money grows. Latham recommended 401(k) plans, IRAs, Roth accounts and health savings accounts to lower your tax bill and let you keep more of your invested earnings.
This is best done through automation, Avetisyan said, which she called, “the most transferable habit of the wealthy.”
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