Consumers have tons of options for financial products to safeguard and nurture their hard-earned money. Some are simpler and more concrete, like a checking account, while others are nuanced and more complex, like futures trading. Which types of financial products are Americans most likely to use? It depends! People gravitate to different products depending on their age, needs, lifestyle, financial literacy, and more.
In this blog post, we’ll review the data from the Federal Reserve’s 2022 Survey of Consumer Finances to better understand which financial products Americans choose to keep their assets and evaluate changes in preferences over time.
Let’s dig in!
What Assets Do American Families Use?
First, let’s take a broader view at the types of assets and financial products that the general population of American families tend to use. The data shows that some, like checking accounts, are held by almost everyone; property ownership and retirement accounts are used by a little over half, and some savings vehicles are rarely used:
| Asset | % of all American Families holding 2022 |
| Transaction account (checking account) | 98.6% |
| Primary residence | 66% |
| Other residential real estate | 13% |
| Retirement accounts | 54.4% |
| Directly held stocks | 21% |
| Certificates of Deposit | 6.5% |
| Savings bonds | 6.4% |
| Pooled investment funds | 11.5% |
| Unrealized capital gains | 72.5% |
Now, let’s break this out by different population groups.
Assets by Percentile of Net Worth
No surprises here: some assets and financial products are more commonly used depending on how much wealth a person or family has. The survey broke out respondents by their net worth to get a better idea of this. This can be a helpful way to see how you compare to your financial peers. In 2022, these were the percentiles of net worth:
- 25th percentile – $27,100
- 50th percentile – $192,900
- 75th percentile – $658,900
- 90th percentile – $1,938,000
Here is the table showing how people at different net worth amounts use different financial products:
| Asset | Less than 25% | 25% – 49.9% | 50% – 74.9% | 75% – 89.90% | 90% – 100% |
| Transaction account (checking account) | 96.7% | 98.8% | 99.1% | 99.9% | 100% |
| Primary residence | 8.1% | 70% | 91.5% | 94% | 95.4% |
| Other residential real estate | 1.1% | 5.7% | 11.8% | 26.3% | 43.8% |
| Retirement accounts | 20% | 47.2% | 62.9% | 84.8% | 91.3% |
| Directly held stocks | 8.3% | 13.2% | 19.2% | 35% | 55.% |
| Certificates of Deposit | 0.6% | 2.7% | 8.6% | 14.8% | 12.8% |
| Savings bonds | 1.3% | 3.3% | 7.4% | 13.1% | 14.7% |
| Pooled investment funds | 1.9% | 2.3% | 9.6% | 22.7% | 46.5% |
| Unrealized capital gains | 17.6% | 77.3% | 96.2% | 98.3% | 99.8% |
If you’ve ever asked yourself, “where do millionaires keep their money?” look no further than the 90th percentile column. It’s clear that those with more net worth are more likely to hold money in investment vehicles than those with less wealth. Some of this is correlation rather than causation. If someone was born into generational wealth (or built wealth by pursuing a high-paying job, for instance) then they already had the funds to put in investments – they did not necessarily generate their wealth via investing. However, investing is still a way for people with more modest means to grow their net worth over time. In addition, just 4.6% of the top wealthiest 10% of Americans do not have wealth in their primary residence. Some may have traded in their equity for a maintenance-free renting lifestyle!
But since most of us are not millionaires (the median American family net worth was $192,700 in 2022), let’s take a look at what’s more typical. The majority have wealth in homeownership, even some in the lower 50% of net worth. In fact, homeownership is a primary driver of net worth in the United States. This can explain how more than 77% of people in the 25th – 49th percentile have unrealized capital gains, if their homes have gained value since they purchased. However, unrealized capital gains also applies to other assets like stocks, collectible items, or precious materials like gold or jewelry that have appreciated in value.
Assets by Percentile of Income
As the next evaluation after net worth, we’re looking at assets based on the percentile of household income. These are the 2022 percentiles of income – so think back to how much money your household made in 2022:
- 20th percentile – $34,600
- 40th percentile – $59,500
- 50th percentile – $73,400
- 60th percentile – $91,900
- 80th percentile – $153,100
- 90th percentile – $245,400
| Asset | Less than 20% | 20-39.9% percentile | 40-59.9% percentile | 60-79.9% percentile | 80-89.9% percentile | 90-100% percentile |
| Transaction account (checking account) | 95.5% | 98% | 99.8% | 99.9% | 100% | 100% |
| Primary residence | 41.7% | 49% | 69.4% | 80.7% | 88.5% | 90.3% |
| Other residential real estate | 3.6% | 6.9% | 12.1% | 11.4% | 22.6% | 39.1% |
| Retirement accounts | 13.4% | 35.4% | 56.4% | 75.5% | 89.3% | 93% |
| Directly held stocks | 7% | 11% | 17% | 21.5% | 40.1% | 56.3% |
| Certificates of Deposit | 3.8% | 4.5% | 6.1% | 7.4% | 11.1% | 9.9% |
| Savings bonds | 2% | 3.4% | 6.7% | 7.7% | 12.5% | 12.2% |
| Pooled investment funds | 1.9% | 4.6% | 8.3% | 12.6% | 20.8% | 39.4% |
| Unrealized capital gains | 45.6% | 56.5% | 76.9% | 87.1% | 94.9% | 97.7% |
Comparing yourself to your peers based on income can be more helpful than net worth in some ways because your income can shift more easily and quickly than net worth, and the report shared more percentiles for a more relevant peer group.
After seeing the data, consider: Are you in line with the types of financial products your peers are using? Are your financial habits more alike with another income group?
As you do so, keep in mind that this is a national look, but the cost of living across the United States varies. Consider a dual income household in the 80th percentile in an expensive market like San Francisco. They would likely have less disposable income to put toward investment vehicles compared to a single person household in the same percentile living in Jackson, Mississippi. Just because others with similar income use something doesn’t mean it’s a perfect fit for your situation. This is merely meant to help you see what options are out there and what could be a fit for your financial situation. After all, who doesn’t love options?
Assets by Age
Next, it’s helpful to consider how you stand with other people in your age group who have had the same amount of time to earn, save, invest, buy property, and make other financial moves. We’ll dig in by the type of financial product so the charts are more digestible to read!
A note on the data: the lowest age bracket is “less than 35” but that would encompass adults ranging from 18-34, which is not only a larger gap in number of years, but also arguably life stage. An 18-year-old is just beginning adulthood while a 34-year-old is almost twice as old and thus much more settled in, and it’s not really accurate to lump these people into one category. It would be interesting to break these out into more defined age ranges, but we’re working with that the report provided.
Wealth in Property
Let’s start with one of the most common assets Americans own: property. The peak of ownership in a primary residence was 69% of Americans in 2004. After the real estate crash, the number fell to a low of 63.7% in 2016, but is ticking back up.
| Less than 35 | 35-44 | 45-54 | 55-64 | 65-74 | 75+ | |
| Primary Residence | 38.5% | 61.1% | 70.7% | 76.1% | 77.8% | 81% |
| Other residential real estate | 4.7% | 9.4% | 12.2% | 18.6% | 18.8% | 16.3% |
We can see clearly that ownership of primary residence increases with age. Homeownership typically requires both a substantial upfront cost and conventional advice says to buy when someone is ready to put down roots in an area for five or more years, which becomes more likely as we age. With real estate, the market forces also make a substantial impact on someone’s ability to buy.
Real estate shortages have made it harder for first-time homeowners to enter the market: the median first time buyer is 35 years old as of 2023 – and this is up from 31 in 2013. Notably, since the age ranges in this survey cuts off at 35, that could be contributing to the substantial difference in ownership rates in the youngest and second youngest age ranges. (We’ll all have to stay tuned for the next edition of this report to see the shifts!)
When it comes to other residential real estate, such as vacation homes or investment properties, it is much less common. It also mostly correlates with age with a slight downturn for those 75 and older. This group may have offloaded their investments or sold or passed down vacation homes, perhaps for a combination of personal preference or to tap into the equity to support their retirement.
Certificates of Deposit
Certificates of Deposit (more commonly known as CDs) are a straightforward savings product. By allowing a financial institution to hold onto your money for a specified period, they’ll typically give you a higher Annual Percentage Yield that is locked in for the duration of the certificate. CDs have become less popular over the years as it has become easier to access other financial products that have other advantages, like flexibility. That may be part of why their usage correlates with age!
| Age | Percent Holding |
| Less than 35 | 1.7% |
| 35-44 | 4.4% |
| 45-54 | 5.1% |
| 55-64 | 6.6% |
| 65-74 | 11.4% |
| 75+ | 12.4% |
Bonds
Another financial product where Americans can keep wealth is bonds. Bonds are generally a lower-risk and more stable investment, and U.S. Savings Bonds are backed by the full faith and credit of the federal government. Typically, investors recommend switching a stock portfolio to a higher percentage of bonds as people age to mitigate major swings from the stock market.
Are Americans using this stable investment option? In short, it’s quite uncommon. The 55-64 and 65-74 age ranges are the top two groups most likely to use savings bonds as of 2022, with over 8% of households each having savings bonds. Less than 3% of people younger than 35 have savings bonds.
As the chart shows, over time, savings bonds have gotten less popular. Analysts note that their yields are not as strong as other financial products that could generate a better return.
One of the key reasons why there are still bond holdouts: the tax benefits. Income from savings bonds (and other U.S. Treasury products) is not taxed at the state or local level. This can be helpful for people living on a fixed income especially in high-tax states. With EE and I bonds, bondholders get the interest all at once and can defer taxes, both occurring when the bond reaches maturity; some find this a convenient way to manage their wealth.
Retirement Accounts
Having a retirement account has gotten more ubiquitous over time, and we can see that middle-aged folks are more likely to have one than the oldest and youngest groups surveyed. Why might the oldest group, the most likely to be retired, not have this kind of account?
You likely know that decades ago, people typically funded their retirement from a pension, but pensions started becoming less common in the 1980s due to the 1978 Revenue Act, which ushered in employee-funded retirement accounts. Still, senior citizens may have some kind of pension setup because they started working before pensions were phased out, and thus have less of a need for their own retirement account.
Notably, people under 35 years old are the second least likely to have a retirement account. Young people are likely less inclined to have a retirement account for a few key reasons: lack of access, lack of disposable income to save, and a sense of feeling like they can start saving later.
Fortunately, access to retirement accounts has increased over time. The Bureau of Labor Statistics reported that as of 2023, 73% of civilian workers had access to retirement benefits as part of their employment, up from 69% a year prior. However, only 56% of workers participated. Unsurprisingly, the accessibility and participation rate of employer benefit retirement accounts also correlates with increased wages.
However, you don’t have to rely on an employer to be able to open or use a retirement account! Learn more about Individual Retirement Account options directly from the IRS. They are a great way to get started or keep up the retirement saving if your job does not offer a retirement benefit, if you are not working, or if you are self-employed.
Stock Ownership by Age
Like retirement account and bond ownership, the youngest and oldest age groups are the least likely to own different types of stocks, while middle aged folks are the most likely. Here is the age breakdown of ownership of three different type of stock financial products:
| Under 35 | 35-44 | 45-54 | 55-64 | 65-74 | 75+ | |
| Stock Holdings | 54.4% | 63.6% | 63.4% | 59.4% | 55.8% | 49.4% |
| Directly Held Stocks | 23.1% | 20.6% | 22.7% | 19.2% | 20.4% | 19% |
| Pooled Investment Funds | 8.2% | 10.3% | 11.4% | 13.3% | 13.1% | 14.1% |
Interestingly, the percentage of the youngest and oldest members of society who have stock holdings has increase dramatically over time
As of 2022, 58% of families had stock holdings, compared to 31.9% in 1989. In 2022, when broken out by age the lowest group (those 75 and older) were not far behind the general population numbers.
Why has stock ownership become more prevalent? Academic researchers published an article about household stock holding using the available Survey of Consumer Finances data at the time, and noted it ties back to the changes in retirement funding: “with the rise in popularity of directed retirement accounts, individuals are finding it necessary to educate themselves in this area.”
Conclusion
After reviewing this near-comprehensive data, one thing becomes abundantly clear: wealth management is ever-evolving. While classic financial products like certificates of deposit may see a decline in popularity, other potential wealth growth vehicles surge in relevance. Plus, choices that consumers make regarding where to store and grow their money often hinge on broader economic conditions or their stage in life. What matters most, however, is building your financial literacy by being informed about all your options for your money and allow it to work for you in a way that supports your needs and financial goals.
If you’re looking for a mobile bank that can help you manage spending and have more money for the things that matter most, check out Milli! We have straightforward spending and savings accounts, but additional helpful savings features like Jars, where you can save up for specific upcoming costs, and informative spending insights. Plus, we have a highly competitive annual percentage yield to get more from your savings. Download Milli from the App Store or Google Play and sign up today.
Keep reading on the Milli blog:
Renting or Buying a Home: A Guide to Decide
Financial Planning for Your Children and Family’s Future
Should you Invest in a Residential Rental Property or REITs?
