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Average Net Worth in America By Age – How Do You Rank?

Ever wonder what the average net worth in America is? And how about by age? How do you rank? And could you or should you start doing something differently to improve your net worth? 

These are all great questions that you should really get to the bottom of. And my hope is that we can answer them all for you in this article!

What Is Net Worth?

First off, before we start to dive into all the numbers, let’s make sure we know what we’re talking about here.

Net worth is one of the most popular measures of wealth today.

So what is it really?

The answer to this is pretty simple actually. Here’s the formula.

Net Worth = Assets – Liabilities

Or, put even more simply…

Net Worth = (The Value of All Your Stuff) – (All Your Debts)

Average Net Worth in America by Age

An example of net worth:

So let’s say your only asset is a car. 

  • The car is worth $10,000
  • You owe $8,000
  • And you don’t have any other debts

Your net worth is $2,000.

It really is as simple as that!

When you add up all your assets and then subtract all your debts, what is your net worth?

Average Net Worth in America By Age

America is one of the most wealthy countries in the world.

Average people…

  • own houses,
  • have indoor plumbing,
  • they own multiple cars, and
  • they go out to eat regularly!

People in America truly are rich. Even those that have a net worth on the lower end of the chart are quite wealthy when compared to the world as a whole. Lets not forget that.

But, getting back on track here…what are the numbers exactly? What is the average net worth in America by age?

Take a look at the table below. The figures come from a Federal Reserve study done in 2020.

AgeMedian Net WorthAverage Net Worth
<35$13,900$76,300
35-44$91,300$436,200
45-54$168,600$833,200
55-64$212,500$1,175,900
65-74$266,400$1,217,700
75+$254,800$977,600

This study calculated both the median net worth and the average net worth in America. Quite often, the average is deceiving in polls like this (since a few tremendous net worth figures can really skew the results upward), so let’s focus our attention on the median net worth results.

Are These Median Net Worth Numbers Good?

Okay, so now we know the average net worth in America by age. Where do we go from here?

First off, are you better than the median?

Since it’s a well known fact that most of Americans are doing a terrible job managing their money, you’d better have a net worth that’s more than the median! If not, you’re likely far behind where you should be!

Secondly, what do these numbers mean for retirement?

Let’s cherry-pick one of these numbers and dive in a little more deeply.

The 65-74 year-olds have an average household net worth of $266,400. Going with the popular 4% withdraw rule, this household can safely withdraw $10,656 a year. Well that’s not enough to live on!!

“But wait! There’s social security!” you may be shouting into your laptop…

Okay, sure. The average social security check is around $1,500. If there are two individuals in the household, this amount may swing up to $2,300 or so, which equates to $27,600 a year. 

With the $10k yearly withdrawal and the social security checks, the typical household will need to live on roughly $38,000 a year for the rest of their lives. Given all the expenses that can occur in life, that’s not much!

And the story actually gets worse…

Perhaps you think that you can live off of $38k pretty easily…but what about 20 years from now? You still have just $38k a year coming in and everything else in this world is two times as expensive (thanks inflation!…). Now the power of your $38k is more like $19k. This is obviously a problem – one that far too many of our elderly citizens is aware of.

On top of this, we assumed the $266,400 net worth was all retirement savings. It’s likely not. For many people, that net worth amount includes their home! 

So, to actually withdraw the total net worth amount, you’ll either need to sell your home or sign up for a reverse mortgage (which is a terrible plan for most).

The story is the same for every age group. Most of us are saving horribly and our years of retirement are going to be a rude awakening for how awful we’ve been saving all these years.

What Should Your Net Worth Be?

If the average net worth in America is so bad, what should it actually be for each age group?

I wrote a post a while back that answers this question perfectly.

After studying what people need in retirement vs. just looking at the averages, I developed the following net worth formula:

 Target Net Worth = (Age – 25) * Income / 3

So, if you earn $50,000 and you’re 30 years old, by just plugging those numbers into the above formula, you’ll quickly discover that your target net worth should be $83,333!

This formula can be used with any age and any income amount.

For this exercise though, we need to figure out what the average net worth should be in America (vs. what the average currently is).

According to Census.gov, the average household income is $65,712. Using this income in the formula with the various ages, we come up with the resulting figures below.

Here’s what your net worth should be at your age! 

AgeTarget Net Worth
<35$109,528
35-44$328,585
45-54$547,642
55-64$766,698
65-74$985,755
75+$1,095,283

How does your net worth measure up?

How to Build Your Net Worth Fast

If you’re a bit behind what your net worth should be, your next question is probably, “Well how do I catch up? What can I do?”

The great news is, you’ve got a TON of options!

The main thing is, you want to make sure your current assets are creating a solid income for you. In other words, if you want your net worth to grow like crazy, then you’ve got to have your net worth invested in things that make you more money (like rental property, owning stock in companies, building a business, etc.).

Want to learn more about growing your net worth fast? Here’s some great reads for you:

How does your net worth compare to the averages? How about vs. what it should be? Tell us in the comments below!

Grow Rich Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

2 Comments

  1. I am 62 and would like to retire in the next 18-24 months. I have a net worth of 1,250,000 and am debt free. My residence is with about $400 and have a lake house worth about $275k. The bad news is my investments are only about $400k. I have $100k in cash savings, checking and an HSA. I could continue to do a side gig valued at $18k yr. I would like to avoid taking my SS as long as possible. My S corp has saved enough to pay my extremely expensive health insurance premiums till I am 65, then on Medicare.

    Here is my question: If I can continue to save $40k per year till I retire – Is it a a dumb idea to deposit 1/2 of that to regular bank accounts, the other 1/2 invested into my current dividend paying stocks? (Roth and other)

    Sorry for the long message, I just have this desire to build up cash to spend when it may not make sense to spend the principal of my investments. It seems cash is a good way to bridge the gap between the end of my income ($68k yr) and starting SS?

    Thank you Derek! Kirk

    • Way to think this one through, Kirk! I’d really like to see your investment total beefed up for your retirement. As it stands, your investments would only net you $16k a year if you withdrew the standard 4% each year. Not a ton… AND, with inflation, that’s going to feel more like $8k a year. Practically nothing…

      So from my standpoint, you’re going to want more of your money working for you, and if it’s sitting in cash, it’s doing absolutely nothing. You already have $100k in savings. I’d say your cash position is strong enough!

      The next question then is, what should you invest in? Especially since the stock market is at all-time highs? This article could help — https://lifeandmyfinances.com/2020/12/where-to-invest-your-money-in-2021/

      Also, you could always rent out or sell the beach house for additional income, but that’s up to you.

      I of course can’t tell you exactly what to do, but hopefully this commentary helps you think your way through your next steps! If it were me, I’d do whatever I could to get my money working for me in retirement, not sitting idle on the side.


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