Where Does Your Net Worth Stand in Relation to Your Age Group?
Net worth balances your assets against your liabilities. Because retirement can be years or decades away for so many, using your age group-based net worth as a financial signpost throughout your life can give you a good indication of what wealth-building strategies are working — and what actions must be taken to grow your net worth now, as well as into the future.
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According to the Federal Reserve, assets to consider include cash within bank accounts, such as checking, savings and money market accounts, prepaid debit cards, CDs and savings bonds, government bonds, health savings accounts, investment accounts (including 529 college savings plans and individual taxable investment accounts), retirement accounts — including IRAs, 401(k)s and 403(b)s, life insurance policies with cash value, annuities with equity, vehicles (including cars, RVs, motorcycles, boats and helicopters) and real estate, including rental homes and primary/residential homes.
Liabilities are debts that can be subtracted from asset totals, including mortgages, home equity lines of credit or home equity loans, credit card balances and installment loans, including personal loans, auto loans and student loans.
The Fed’s 2020 Survey of Consumer Finances report (2016-2019) listed the following median and average household net worth across age groups:
Age Bracket | Median Net Worth by Age | Average Net Worth by Age |
Less than 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 |
As evidenced above, the net worth of individuals typically increases as they age and tapers off after the age of 75, according to Federal Reserve data. The age group with the highest average net worth in the U.S. is the 65-74 age group, at over $1.2 million. The under 35 age group has an average net worth of just over $76,000.
Median net worth stats give a more realistic and usable comparison for the typical American — but average net worth may be provide an aspirational challenge for anyone in any age group. Average net worth numbers exceed median net worth figures by three to five times due to extremely high net worth individuals pulling the average up.
Starting to work in your twenties usually means entry-level salaries and student debt. So, having a relatively small net worth if you are under the age of 35 is understandable — it is very possible to be burdened with a negative net worth in your twenties.
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By contrast, when an individual reaches retirement age, average net worth starts to decline slightly. The average U.S. net worth dips from $1,217,700 to $977,600 when comparing those aged 65 to 74 against those aged 75 and older. During their “golden years,” retirees often start to withdraw from their savings, thus decreasing their total net worth.
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