Here's the Net Worth That Puts You in the Top 10% of American Households by Age
Tracking your net worth is one of the best ways to ensure you're making progress in improving your finances.
Your net worth takes into account all of your assets and liabilities to provide a full picture of your current financial standing. It can be much more enlightening than simply looking at your retirement account balance or how much you have left to pay on your student loans. Regularly looking at both sides of your personal balance sheet, so to speak, is a great way to make sure your finances are on the right track.
Consistently saving more than you spend, paying down your debts, and investing what's left is the formula for growing your net worth over time. And time is often a big contributor to building a substantial net worth.
So, while those in their 20s or 30s might be looking at how much the wealthiest Americans have, they might be more interested to know how much people their age are worth. Likewise, people in their 50s and 60s could get a false sense of how wealthy they are relative to their peers when you factor in people in their 20s and 30s who are still paying off their student loans.
If you want a high bar to aim for, making it into the top 10% by age group might offer the motivation you need to save more and build your wealth.
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Here's the net worth that puts you in the top 10%
Every three years, the Federal Reserve conducts a survey of American households, cataloging various financial and demographic details, including household assets and liabilities. The most recent data from the Fed's Survey of Consumer Finances comes from the end of 2022.
At that point, the top 10% of all American households had a net worth of at least $1.94 million. Here's how that breaks down by age group:
Age Group* | Net Worth of 90th Percentile |
|---|---|
18-29 | $281,550 |
30-39 | $711,400 |
40-49 | $1,313,700 |
50-59 | $2,629,060 |
60-69 | $3,007,400 |
70-plus | $2,862,000 |
*For couples, the reference person is the male in mixed-gender couples and the older individual in same-sex couples. Data source: Federal Reserve. Calculations by author.
As you can see, the wealthiest Americans tend to be older, and that makes sense. They have had more time to grow their careers, pay off debts, and let their investments compound. The bulk of the wealth for the top 10% comes from investments in stocks and mutual funds as well as their primary residence.
That said, older households also had more opportunities to take on added debt and dig themselves deeper into a hole. Compound growth can work for or against you. The most indebted families are actually in their 30s and 40s, not their 20s, even though the median and top 10% of households are better off over time.
Growing your net worth requires a plan and the discipline to stick to it. If you consistently make progress starting in your 20s and 30s, you're more likely to climb to the top 10% of households by the time you're in your 50s and 60s. Here's how you can get yourself to elite levels of wealth.
How to build elite levels of wealth
If you want to grow your net worth, you have to put your money to work where it provides the greatest long-term returns. That's not necessarily investing in the stock market, although that's often a key component of achieving a high net worth.
If you're carrying high-interest debt, it likely makes sense to put most of your savings toward paying off those balances. Credit cards currently charge interest rates in the 20% range. Paying off those balances is like effectively receiving a 20%-plus annual return on your "investment."
That said, not all debt is bad. The vast majority of high-net-worth households are homeowners with mortgages. While the returns on real estate investing aren't necessarily better than investing in stocks, buying a home to live in is a great way to build wealth. That's because a part of your monthly mortgage payment goes toward building equity in your home.
There's plenty of low-hanging fruit for investing in the financial markets, too. If your employer offers a 401(k) match, that might merit priority over any debts or other commitments. There are few other opportunities to earn an immediate return of 50% or 100% (depending on the terms of your match). Even using a tax-advantaged savings account like an IRA can provide a nice boost to your net worth thanks to the tax savings it provides.
Making a plan for how you allocate your savings toward your current debts and potential investments is the first step to building your net worth. The second step is just executing the plan and waiting for your efforts to pay off. Even if you never make it to the top 10% of households, you'll certainly find yourself in a better place tomorrow by exercising good financial judgment today.
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