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This is How Much Money You Should Have at Your Age

average net worth by ageNet worth is a financial metric that can help you keep your individual picture of your finances in perspective. The average net worth by age, in this case, refers to the net worth of the households in the U.S. divided by the number of households. Metrics typically use households rather than individuals because a household can be one person or a large number of people. Net worth usually goes up with age as your income is higher, you own more assets and may have less debt. Here, we will break down net worth by age group for the entire population of the U.S. If you have more questions about net worth, you may want to speak with a financial advisor. SmartAsset’s free advisor matching tool can connect you with advisors that serve your area.

What Is Net Worth and How to Calculate It

Net worth is an excellent measure of how Americans are doing financially since it takes into consideration everything you both own, your assets, and owe, what you owe. Your assets, or what you own, include cash, bank accounts, investment accounts, the equity you have in your home and more. Valuable pieces of jewelry are included. So are any collections you have that have financial worth like stamps, coins or classic car collections.

Your liabilities, or what you owe, include all your debt, including what you owe on your home, student loan debt, credit card debt and any loans you have outstanding. The difference between your assets and liabilities is your net worth.

If you want to calculate your net worth, you add up the value of all you own and subtract from that the value of all you owe your creditors. The difference is your net worth. If we want to extrapolate that to the entire population of the U.S., we can add up the value of assets of every household and subtract from that the total amount those households owe their creditors. The result is the net worth of the total American population.

Average Net Worth

average net worth by ageWhen you calculate the average net worth of the population of the U.S., the same procedure is used with one more step. You subtract total household debt from total household assets for the entire population. Then, since there is more than one household, divide by the total number of households and the result is the average household net worth for the U.S. population.

It’s important to take into account income disparity between the rich and the poor when calculating the average net worth of the U.S. population. The Federal Reserve conducted its last Survey of Consumer Finance in 2019, the results of which were released in September 2020. In that survey, it found that if we just take an average of total net worth in the U.S., it is skewed upward since the top 10% of households hold 70% of the wealth and the top 50% of households hold 98% of the wealth. If you don’t adjust for this, the average net worth of an American household is about $748,800.

One way to get a better read on the average net worth of Americans is by using the median net worth of the nation’s population. The median is the middle number of a list of numbers when they are sorted either in ascending or descending order. If you list all households’ net worth in the U.S., the median net worth is $121,700. You can see the income disparity by the large difference in the average net worth and the median net worth in the U.S.

Average Net Worth by Age

Net worth tends to go up as you get older. Several factors are responsible for the increase,  like finishing your education, inheritances, your income, family structure, ethnicity and housing status. This list is not exhaustive. The 2019 Survey of Consumer Confidence conducted by the Federal Reserve breaks out net worth by age and gives the average net worth and the median net worth by age group.

Early Adulthood

If you are between the ages of 18-24, the average net worth is approximately $28,707 and the median net worth is approximately $8,216. Even in this age group, the average net worth by age is skewed toward the high end. If you are between ages 25-29, the average is $49,388 and the median is even further behind at $7,512.

If you are between the ages of 30-34, the average net worth is $122,700 and the median net worth is $35,112. Between the ages of 35-39, the average is $274,112 and the median is $55,519.

Middle Age

Between the ages of 40-44, the average net worth is $623,694 and the median is $127,345. If you are 45-49, the average is $761,500 and the median is $164,197.

In your fifties, if you are between 50-54, the average net worth is $897,663 and the median net worth is $171,360. Between 55-59, it is $1,165,477 and $193,549 respectively.

Senior

Between the ages of 60 and 64, the average net worth is $1,187,730 and the median is $228,833. If you are between 65-69, the average is $1,250,679 and the median is $271,805.

In you are in your 70s, the average net worth starts to decline, but the median net worth does not necessarily follow. Between 70-74, the average is $1,173,653 and the median is $258,531. From ages 75-79, the average net worth is $945,480 and the median net worth is $272,976. From 80 years of age and forward, the average net worth is $973,141 and the median is $235,193.

The Bottom Line

average net worth by ageFrom the average net worth, as compared to the median net worth, for each age group, it’s apparent that the median net worth may be a more standardizing financial metric to use to analyze net worth by age in the U.S. Since 50% of the population only owns 2% of the country’s net worth, it makes sense that to get a true picture of net worth by age in the U.S., you have to use a measure other than an average.

Tips on Managing Your Finances

Having a financial advisor in your corner to help you manage your finances can be a great idea. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

If you’re managing your money on your own, it pays to be prepared. SmartAsset has you covered with a number of free online resources that can help you figure things out and get a better hold on your finances. Check out our investment calculator and get started today.

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