Do you want to know how your net worth stacks up against the average net worth by age in the US?
We’ll show you examples, and give you a brief explanation of how net worth is calculated – and we’ll try not to make it too complicated.
Net worth is simply the value of all assets minus the value of all liabilities.
The median net worth of households in the United States varies according to race, education, geographic location and gender. Generally, households with greater incomes have the highest net worth, but wealth is not evenly distributed.
The wealthiest 25% of US households own 87% of the wealth. In 2009 that amounted to $4.2 trillion
Calculating your net worth is easy. Firstly calculate the total value of your assets. Include:
- Bank accounts
- Certificates of deposit
- Stocks, bonds, mutual funds, and similar investments
- The value of any property you own.
Do not include personal property, such as jewelry, vehicles and clothing. They may have cost a lot to buy, but the resale value is minimal.
Now determine your liabilities:
- Credit cards
- Car loans
- Home mortgages
- Business loans
There are some circumstances that affect average net worth. Age is only one
A college education versus a high-school education can double a household’s net worth. Being self-employed can triple net worth. Living in the Northeast US compared to the South, nearly doubles net worth.
So it all depends how you define ‘average.’
This table of average net worth by age is calculated using the formula above and is based on figures from the Federal Reserve.
-
Age of Head of Household Median Mean Under 35 $14,800 $53,200 35-44 $64,200 $176,000 45-54 $116,000 $364,800 55-64 $141,900 $471,100 65-74 $136,600 $429,300 75 and older $114,500 $317,900
But there is another way to calculate average net worth by age.
This is the equation: Net worth = Age multiplied by pretax income divided by 10.
Using this formula, and assuming a base salary of $25,000, we have a different set of results.
| Age | Income | Net Worth |
| 20 | $25,000 | $50,000 |
| 25 | $25,000 | $62,500 |
| 30 | $25,000 | $75,000 |
| 50 | $25,000 | $125,000 |
| 60 | $25,000 | $150,000 |
Of course, income doesn’t usually remain static, so assuming reasonable increases over the years we can consider the following scenario:
| Age | Income | Net Worth |
| 20 | $25,000 | $50,000 |
| 25 | $35,000 | $87,500 |
| 30 | $50,000 | $150,000 |
| 50 | $55,000 | $275,000 |
| 60 | $75,000 | $450,000 |
What you can see is that each of the options has one thing in common. Average Net worth increase with age
All you have to do is work to save enough to fund the specific lifestyle that you desire!
We hope you didn’t find the figures about average net worth by age too confusing. Please let us know if you did in the comments feed below.
