Why Some Grosse Pointe Retirees Feel Rich — But Are Illiquid
In Grosse Pointe, it’s not uncommon to see retirees who look wealthy.
Beautiful home.
Second property up north.
Florida condo.
Nice cars.
Well-furnished lifestyle.
On paper, net worth might be $4 million. $6 million. Sometimes more.
And yet, when retirement begins, cash flow feels tight.
That’s not because they aren’t wealthy.
It’s because they’re illiquid.
Net Worth Is Not the Same as Income
You can have:
$2.5M in pre-tax IRAs
$1.5M in home equity
$500k in a second property
A brokerage account
That adds up quickly.
But none of it automatically produces spendable income without consequence.
IRA withdrawals are taxable.
Home equity is trapped unless sold or borrowed against.
Real estate carries maintenance and property taxes.
Net worth feels strong.
Liquidity tells a different story.
The House Can Create an Illusion
In Grosse Pointe, homes are often legacy assets.
They’re emotional anchors.
They represent decades of work.
But a $1.5M home does not pay the tax bill.
It creates one.
Property taxes in the Pointes can easily run into five figures annually.
Add maintenance, insurance, utilities.
That’s fixed overhead.
And fixed overhead requires liquid income.
The IRA Concentration Problem
Many retirees here have built substantial wealth inside pre-tax retirement accounts.
That’s not wrong.
But it creates rigidity.
Large IRAs mean:
Required Minimum Distributions later
Tax compression for surviving spouses
Limited flexibility for capital gains planning
Heavier tax drag on withdrawals
If 70–80% of your investable assets sit inside pre-tax accounts, you may feel wealthy.
But your flexibility is narrower than you think.
Illiquidity Feels Like Anxiety
Illiquidity doesn’t show up on a balance sheet.
It shows up in behavior.
It sounds like:
“Let’s not travel this year.”
“I don’t want to pull too much from the account.”
“Maybe we should wait.”
Even when the net worth is high.
That tension is rarely about total wealth.
It’s about usable wealth.
The Difference Between Wealth and Freedom
True retirement freedom comes from:
Reliable income structure
Tax-aware withdrawal sequencing
Staged liquidity
Flexibility during downturns
If a portfolio is $5M but 80% is locked in tax-heavy accounts and real estate, the household may technically be wealthy.
But emotionally, they don’t feel secure.
Liquidity is what creates calm.
Why This Matters at $2M–$8M
At ultra-high-net-worth levels, illiquidity can be absorbed.
At $2M–$8M, it matters.
You don’t have infinite margin.
A downturn combined with rigid assets can amplify stress.
That’s why guardrails and staging matter.
Not because you’re at risk of failure.
But because you’re at risk of friction.
And friction erodes confidence.
The Solution Isn’t Selling Everything
This isn’t an argument to sell the house.
Or liquidate the lake place.
Or avoid tax-deferred accounts.
It’s an argument for intentional structure.
When retirement income is designed deliberately:
Liquidity is staged
Taxes are smoothed
Real estate is evaluated realistically
Spending flexibility is built in
Wealth starts to feel usable.
Not theoretical.
The Real Question
In Grosse Pointe, many retirees are asset-rich.
The question is:
Are you liquidity-rich?
Because retirement isn’t funded by net worth.
It’s funded by income.
And income requires structure.
