Nearly half of millionaires surveyed believe their financial planning needs improvement, according to Northwestern Mutual’s 2024 Planning and Progress Study, which explored Americans’ attitudes, behaviors and thoughts on a number of issues that affect their long-term financial security.
See America’s Billionaires
The survey noted that far from feeling wealthy, American millionaires (those with at least $1 million in investable assets) are far more likely to feel financially enlightened and prepared than the general population. Additionally, millionaires are far more likely to use a financial advisor (69%) than the general population (33%). Millionaires who use financial advisors also report feeling clearer and more confident about their financial futures than millionaires who don’t consult with financial advisors.
“For most Americans, ‘feeling a million dollars’ isn’t about believing you’re rich, it’s about exuding confidence and clarity about the future,” said John Roberts, chief field officer at Northwestern Mutual. “But for many millionaires, money alone doesn’t create clarity; financial planning does. When people have a comprehensive plan customized for their life and an advisor who helps them identify their opportunities and blind spots, they feel less anxious and more secure. It’s about having a plan to enjoy today without sacrificing tomorrow. These feelings aren’t just for wealthy Americans; they’re within everyone’s reach.”
So why do so many millionaires think they need to improve their financial plans? “If most of your peers have structured financial plans, you’re more likely to see your own inadequacies,” says Justin Neal, CEO, partner and personal wealth advisor at Northwestern Mutual’s Sozo Private Wealth & Insurance Services in Atlanta, Georgia.
In explaining millionaires’ desire for better financial planning, Neal said, “Here’s how I look at it: You might be in relatively good health, but if you hang out with Olympic swimmers for an afternoon, you’ll probably go home depressed and overweight. Millionaires hang out with other millionaires. According to Northwestern Mutual’s 2024 Planning and Progress Study, these people are more organized and confident in their plans, which probably gives them the impression that there’s plenty to do wherever they are.”
Neil adds that before he became a runner, he had conversations with people about what it meant to run fast and where we fell on that spectrum: “After years of running, I was painfully aware that I was not fast! Whenever I denied being fast, my friends would mock my false modesty, but I understood the reality of what it means to be ‘fast’ and how unattainable it is,” he said.
Neal believes he sees a similar phenomenon in the industry: The Planning & Progress study reported that 48% of millionaires believe their financial plans need improvement. He adds that wealthy people often spend time with others in similar situations, who create financial roadmaps with above-average structure and design.
Powering the financial planning of billionaires
So what areas should financial advisors focus on when working with millionaire clients to strengthen their financial plans and move them closer to their goal of financial stability? First, Neal noted that it’s easy to talk about investing and growing assets. In contrast, it’s hard to talk about death and estate planning, or having money conversations with parents, spouses and children. “When we help people deal with these tough issues in their lives, they find that their planning has improved. This is true for millionaires and for everyone else. Dealing with the tough issues changes everything,” Neal said.
Second, Neal says that even when advisors have a good plan in place, clients often don’t notice or remember it. “When we speak, I pause for a moment and ask if there are any topics or areas that are important to my client to make sure we’re talking about something that really matters. I also share some highlights of our work and let them hear how much progress they’ve made through our partnership. We need to be reminded of how our close relationships influenced us and how that has changed over time. It’s hard to age your children until you look at photos from years ago, when you can clearly see their growth and maturity,” Neal adds.
Top retirement questions millionaires have
The survey also uncovered some of the questions millionaires have about retirement. The No. 1 “top question” they have about retirement is “How will taxes affect me?” This question ranks higher than “How much money will I need to retire comfortably?” and “Will I live to run out of savings?” which are No. 2 and No. 3, respectively.
Six in 10 millionaires say they have plans to reduce taxes on their retirement savings. These plans include:
Make strategic withdrawals from traditional and Roth accounts to maintain a lower tax rate (44%) Use a combination of traditional and Roth retirement accounts (37%) Make strategic charitable contributions, such as lump-sum itemized deductions (27%) Use a Health Savings Account (HSA) or other tax-advantaged health care account (24%) Use products such as whole life insurance and annuities for tax advantages (24%) Make Roth conversions before taking RMDs or Social Security (23%) Use qualified charitable distributions from an IRA (22%) Contribute to other tax-advantaged accounts such as 529s (17%) Use basis paid on the cash value of whole life insurance to maintain a lower tax rate (19%) Use a qualified longevity annuity contract (QLAC) to fund retirement (17%)
The 2024 Planning and Progress Survey was commissioned by Northwestern Mutual and conducted by Harris Poll among 4,588 U.S. adults ages 18 and older. The survey was conducted online from January 3 to January 17, 2024.
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Ayo Mseka has more than 30 years of experience reporting on the financial services industry. He was previously the Editor-in-Chief of NAIFA’s Advisor Today magazine. He can be contacted at (email protected).
