Average Net Worth By Age (Hard To Believe)

Ever wondered how your net worth compares to your peers? Prepare to be intrigued as we dive into the latest information released by the United States Federal Reserve, shedding light on the average net worth across different age groups.

These eye opening figures might reveal that you’re further ahead in your financial journey than you imagined. The Federal Reserve’s recent data offers a snapshot of the financial landscape for the typical person, providing valuable insights into various age groups.

What is Average Net Worth?

Average net worth can be skewed substantially based on what form of average is used. In order to get a picture of the typical household we’ll use median, which is a form of average. Keep in mind that everyone’s situation is different and we’ve all been dealt different hands.

Comparing your net worth to others in your age group is like paying attention to cars on the road around you; even though it’s not a race, it’s still nice to know if you’re keeping up with the traffic.

How to Calculate Your Net Worth?

In order to calculate your net worth, you add up the value of every item and asset you own that has value. This includes retirement accounts, home equity, the value of your clothing and anything that has an underlying value. Then you must subtract any liabilities (debts etc) you have and you’ll be left with your net worth.

Under 35s Net Worth

The average net worth for people under 35 is $39,000. A person with a net worth of $39,000 might have a combination of savings accounts, retirement funds and investments in stocks, bonds or mutual funds. Although these probably aren’t substantial due to not having been in the workforce for a very long time, many younger adults under 35 might still be paying off student loans which can really reduce their net worth.

The remaining balance of these student loans would be subtracted from their total assets. Some individuals might have credit card debt. Credit card debt can accumulate due to various expenses such as education, medical bills or everyday living costs. If the person has a car loan, the remaining amount owed on the loan would be subtracted from their net worth.

Personal belongings like furniture and electronics also contribute to net worth. Some young adults might own a home but assuming they haven’t owned it for a long time, equity will be very little. A portion of their net worth might be in an emergency fund if they’re financially stable, which is money set aside for unexpected expenses, a job loss or other emergencies.

To sum it up, those under the age of 35 are most likely to have a large amount of liabilities and debts with very few assets; even keeping your net worth positive will put you ahead of many in this age group.

Net Worth For The 35–44 Age Bracket

$135,600 is the average net worth for people between the ages of 35 and 44. One of the largest contributors to net worth in this age group could be home ownership. Many people in their late 30s and early 40s have purchased homes and the equity in their homes could make up a large portion of their net worth.

People in this age group are likely to have contributed to retirement accounts such as 401ks or IRAs. Over the years, these accounts, often boosted by employer contributions, could account for a large portion of their net worth.

They might have investments in stocks, bonds, mutual funds or real estate other than their primary residence. Savings accounts and emergency funds are also part of the equation. While they might still have some debts, individuals in this age group might have significantly reduced their student loan debts if any remain and may have paid off a considerable portion of their credit card debts.

Investments, education and career development could have started to pay off, leading to higher paying jobs and increased earning potential. Other personal assets, such as vehicles, valuable personal belongings and collectibles could contribute to their net worth. However, these are generally not as significant as real estate and other investments. These also typically do not carry a lot of equity.

Net Worth For The 45–54 Age Bracket

$247,200 is the average net worth for individuals between the ages of 45 and 54. This suggests a relatively stable financial position for this age group.

Many people might have a large amount of equity in their homes, which means the current market value of their house is way more than the remaining mortgage balance. Individuals in their late 40s and early 50s are likely to have robust retirement savings in 401K accounts, IRAs and other retirement vehicles. These accounts could have grown significantly over the years due to consistent contributions and potential employer matches.

By this age, individuals might have paid off substantial portions of their debts including student loans, credit card debts and car loans. Investments in education and career development earlier in life might result in higher paying job positions and these people have probably reached their peak income besides real estate. Personal assets such as vehicles, valuable possessions and collectibles might contribute to net worth. Some individuals might have investments in businesses or even own their own businesses which can significantly boost their net worth.

In some cases, fortunate airs might have received an inheritance which could provide a helpful boost.

Net Worth For The 55–64 Age Bracket

$364,500 is the average net worth for individuals between the age of 55 and 64. This indicates a somewhat comfortable financial situation.

Home ownership continues to be a substantial contributor to net worth. Many individuals in this age group likely have significant home equity or even a home they own. People in their late 50s and early 60s are likely to have retirement savings in accounts such as 401Ks, IRAs and pensions. These accounts could have grown quite a bit over the years due to consistent contributions, employer matches and compound interest.

Properly managed investments often appreciate over time, contributing to overall wealth. By this age, those with assets are likely to have gotten rid of all of their debts including mortgages, student loans, credit card debts and car loans. Social security benefits become available around age 62. Even though these payments don’t directly contribute to net worth, the monthly income is that much that doesn’t need to be withdrawn from savings or investments. Additionally, the possibility of receiving an inheritance is even more likely by this age.

Net Worth For The 65–74 Age Bracket

The 65 to 74 age group continues to see an uptrend in net worth, mostly due to factors previously mentioned. As a result, the average net worth is $409,900.

Home equity is significant. They likely haven’t been retired for too long so their investments remain robust and social security payments have now fully kicked in. They probably don’t have much bad debt, if any, and if they were going to receive an inheritance, they would have likely already gotten it by this point.

Net Worth For The 75 And Up Age Bracket

Those aged 75 and up have an average net worth of $335,500 and this is the first age group where there’s been a decline. Several factors include increased healthcare expenses, potential need for long-term care and a shift in financial priorities from wealth accumulation to wealth preservation.

Those nearing the end of their life are less concerned about growing their assets and more focused on enjoying what remains. These combined factors explain the decrease in net worth among this category and it’s not necessarily a bad thing.

Reviewing The Financial Health Of Individual’s Net Worth

Taking a look at the average net worth across different ages gives us insight into the financial health of our peers. It’s like peeking into the money diaries of people at various stages from the hustle and grind of youth to the relaxed pace of retirement. These numbers tell stories.

It’s important to remember that there’s no one size fits-all when it comes to money. It’s a roller coaster full of ups and downs by being mindful of your spending and making intelligent investment decisions. You should have no problem passing these average figures.