As you build your personal wealth, you will grow curious about your net worth and how you can compare it with others of the same and different age groups. However, one crucial thing to remember is that you should focus less on the number, and more on building it by things such as paying off debt, increasing net income, and investing more towards your retirement funds.
Net worth is actually an important tool for determining the various aspects of your financial health.
It could also analyze your ability to meet obligations and whether you can withstand sharp economic changes. Net worth is also important for determining your financial security at the time of your retirement, including living and health expenses.
In addition, it’s also considered an end-of-life legacy that you can leave behind for your family and loved ones. Calculating your net worth is actually easier than you think. The simple and most straightforward way is to subtract your liabilities from your assets, such as vehicles, real estate, liquids, investments, savings, retirement funds, and other valuable possessions, including but not limited to jewelry, electronics, and furniture.
Your liabilities may include mortgage, student loan, car or personal loans, credit card debt, and any other debt you have. Americans have different net worth according to their age group.
In their 20s, the average net worth for an individual could be around $113,084, whereas the median is $7,638. This could change rapidly given your income and other factors. In their 20s, people are mostly beginning their careers. With limited income sources, it could be incredibly challenging to focus on building your net worth, but remember, it’s also a crucial time to have a deep dive into your financial health.
Properly budgeting, saving, creating an emergency fund, and investing are a few of the key tools to increase your wealth in your early years.
In your 30s, your net worth could jump to $317,171, with the median being $35,649. 30s is a time of hitting milestones such as starting a family or making a big investment such as buying a house or car. If you want to continue to increasing your net worth, be vigilant about your spending habits during these years.
The median net worth for someone between the ages of 35 to 44 in the US is $136,000.
Mine is currently $1.7M and I will use this year to become a multi-millionaire before age 40.
If you want average results, do what everyone else does. As for me, I refuse. pic.twitter.com/jgLkODgBnI
— Your Friend Andy (@OhHaiAndy) January 6, 2024
An average American in their 40s could have a net worth of $791,616, with a median of $125,370. In your 40s, your income could increase significantly, making space for more spending on important things like children’s education, family vacation, etc.
Experts suggest that an individual in their 40s should also focus on diversifying their investment portfolio to increase wealth.
In your 50s, your net worth could reach $1,406,887, and the media’s $288,263. As you hit 50, you are closer to retirement than ever. As an American, this should be a good time to gather more knowledge about Social Security, Medicare, and other retirement benefits.
Calculating these benefits along with your own retirement fund and expenses could significantly help manage your net worth.
An average American in their 60s could have a net worth of $1,703,727, and a median of $439,154. Many people consider retiring in their early or mid-60s, so this is a good time to determine whether you have saved eight times your annual salary. This is also a crucial time for clearing your debt checklist and other obligations.
Average net worth by age:
< 35 = $76,300
35-44 = $436,200
45-54 = $833,200
55-64 = $1,175,900At 31 years old, I had negative $99,000 net worth.
At 41 years old, I became a millionaire.Here’s how I went from below the average at 31 to above the average at 41:
— Cori Arnold (@iamcoriarnold) November 7, 2023
As Americans approached the 70s, they could build a wealth of $1,626,996, with a median of $367,286. Withdrawing from your investment portfolio could be a better option at this age. In the 80s, net worth could hit up to $1,521,375, whereas in the 90s, it could reach a whopping $1,292,056.
However, it is important to note that how your net worth grows in your last years depends on how you manage your finances in the early years of working. To build a strong net worth, you could focus on things like increasing your income or diversifying sources while also restricting your spending. Paying off debts should be a must, while saving money and investing it are two very important things to consider for your strong net worth.
