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Average Net Worth By Age and How to Increase it

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Knowing average net worth by age is a good way to measure your financial health. We share the average net worth in the US and how to improve your standing.

Measurement is an important part of life. In school, you are measured by your grades. At work, you are measured through performance reviews. In personal finance, one figure measures where you stand – net worth. You may hear about average net worth by age and wonder how you measure up.

We hear about celebrities and their net worth and think it’s impossible to try to measure or increase ours. Don’t give into that myth. Net worth is a tool to measure financial health.

Knowing the average American net worth by age lets us gauge where we stand against our peers. Net worth shines a light on our financial fitness and where we need to cut the fat. This post discusses the average net worth by age and ways to improve your standing.

What’s Included in Net Worth?

 

Before we look at average net worth, it’s important to know what it includes. Net worth sounds scary, but it’s easy to calculate your net worth. Your net worth is your assets minus your liabilities.

Assets include any of the following:

  • Your house
  • Your car
  • Investing account balances
  • Cash on hand
  • Bank account balances
  • Jewelry, art, or any other valuables

Anything that has value or can be sold is an asset.

Liabilities include any of the following:

  • Mortgage
  • Car loan
  • Student loans

As you can see, liabilities are debt. The quicker you increase your assets and decrease your liabilities, the sooner you increase your net worth.

If calculating your net worth sounds difficult, let Personal Capital do it for you. Their free tool is simple to use. In fact, I use it each month to update our net worth. Check out our Personal Capital review to learn what they offer and how it works.

Average Net Worth By Age

 

The numbers I used for average net worth come from U.S. Census data from 2013. The Census collects a lot of data, including the average net worth of households, by age.

Here is their findings for average net worth by age:

Age Net WorthNet Worth (Excluding Home Equity)
Under 35$6,900$4,138
35 to 44$45,740$18,197
45 to 54$100,404$38,626
55 to 64$164,498$66,547
65 to 69$193,833$66,168

A lot of data goes into calculating the above averages. As you consider where you stand, keep in mind net worth directly impacts retirement planning.

Yes, net worth has more immediate ramifications if you have significant debt, but it is also a critical player in saving for retirement.

If you don’t want to work your entire life, knowing your net worth is vital to retirement planning. I include how much you should have saved for retirement in each of the below age groups to help align your focus.

Average Net Worth By Your 30s

 

The financial and life decisions you make in your 30s lay a foundation for the rest of your life. You may want to start a family and you’re likely several years into your career.

With an average net worth of $6,900 for those under 35 and $45,740 for those ages 35 – 44, most are just starting their journey to improve their financial standing. If you’re in your 30s, use these years to lay a foundation for future success.

Financial success consists of two things in your 30s: paying off your student loans and growing your 401(k). Student loans may seem like good debt, but they restrict you from achieving other goals.

If you’ve not refinanced or consolidated your loans, now is the time to research the possibility. Lowering your rates allows more of your payment to apply to the principal and become debt free quicker.

Credible is a great option to refinance student loans. They let you compare up to seven lenders at once to find the best fit.

If your employer offers a 401(k) plan, contribute enough to receive the match (if one is provided). If you can, contribute at least 15 percent of your income to grow your net worth. You should have at least two times your annual salary saved for retirement by age 35, according to Fidelity.

Your 401(k) is the best way to reach that target.

Average Net Worth By Your 40s

 

Once you reach your 40s, you should find your groove when it comes to increasing your net worth. The average net worth for people in their 40s is $45,740 for those ages 35 – 44 and $100,404 for those ages 45 – 54.

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The best way to increase your net worth in your 40s is through your income. If you’re in your 40s or 50s and have a bachelor’s degree, you’re in your highest earning decades. Don’t use that income to accrue possessions.

Instead, grow your wealth. Max out all of your retirement options and diversify your investing. This can include investing in real estate or other ways to build wealth outside the stock market.

You should have six times your income saved for retirement by the time you reach 50, so it’s best to be aggressive with your savings.

If you plan to help your children with college, don’t overlook the tax benefits of a 529 plan for their needs. Like any investing option, the more time you give those funds to grow, the better.

Finally, don’t overlook the role of debt. You want to avoid debt as much as possible. Doing so frees you to focus solely on accumulating and growing your wealth.

Average Net Worth By Your 50s

 

Your 50s are a continuation of what you do in your 40s. The average net worth of people in their 50s is $100,404 for those ages 45 – 54 and $164,498 for those ages 55 – 64.

You want to have eight times your annual salary saved for retirement by the time you reach 60. Aggressive wealth accumulation should continue during these peak earning years, especially if you’re below your projected needs.

As in your 40s, continue to contribute to a 529 plan if you have children going to college. Also, consider contributing to a Health Savings Account (HSA) to grow funds for medical needs in retirement.

As you reach the latter half of your 50s, don’t overlook increasing liquidity. This will help you better manage expenses in retirement.

Average Net Worth By Retirement

 

For the purpose of this post, I’m combining 60s and retirement. The average net worth at retirement, or people ages 65 – 69, is $198,833. However, Fidelity states you should have at least ten times your annual salary saved by the time you reach 67 to adequately manage retirement needs.

If you are below that number, you may want to consider working several more years to increase your income. You may also want to consider downsizing your housing. If your children are on their own, moving to a smaller house or apartment will help alleviate your financial burden.

What I Overlooked in Average Net Worth

 

Discussing the average net worth in the U.S. is a big undertaking. I only looked at a few factors, such as retirement planning, age, and income (covered below). I did not discuss a variety of other factors that can have a significant impact on net worth such as:

  • Education level
  • Where you live
  • Income level
  • Health

Each of the above factors plays a direct role in net worth. You may live in a lower cost of living area and not need as much. Alternatively, you may be restricted by not having an advanced degree.

Each situation is different, and you need to consider it in light of other competing factors. Additionally, don’t overlook the role of health in net worth. The average couple will spend $285,000 on medical expenses in retirement, excluding long-term care, according to Fidelity.

Though a staggering number, it’s one that is helped by healthy living. Improving your health, generally speaking, has a direct impact on your net worth.

Overlooking the additional factors is necessary, but it doesn’t negate the need to track your net worth. It can be done simply, and free, with a tool like Personal Capital.

Average Income By Age

 

Income plays the largest role in net worth. With it, you can invest it in interest and/or dividend producing assets to grow your wealth. When you live beyond your means, you accrue debt and restrict yourself from increasing your net worth.

Due to this, it’s important to look at average income by age. You will notice I use average and median income by age interchangeably. While they’re not the same thing, for the purposes of this post, it’s easier to use them interchangeably.

Like average American net worth, I use data from the U.S. Census for the information, this time from 2017. Below is the average income by age:

AgeMedian Income
15 to 24 $40,093
25 to 34$62,294
35 to 44$78,368
45 to 54$80,671
55 to 64$68,567
65+$41,125

Like net worth, various factors impact median income, including education level and where you live. Don’t take this as a limitation on how much you can earn in your working years.

You can change jobs, get specialized education, and find ways to make extra money on the side to increase your earnings.

How to Increase Your Net Worth

 

If you look at the average net worth by age in the U.S. and determine you’re behind, don’t give up. There are countless ways to increase your net worth. Below are several ways to easily improve your net worth.

Cut Expenses

Cutting expenses is the best way to improve your net worth, as long as you apply the savings to your future needs. It’s easy to think the $150 per month cable bill will have no impact on your future. However, that’s $150 per month you can use to grow your wealth.

Cutting the cord is one example.

There are a lot of ways to reduce expenses and save money. Read our guide on ways to save money every month. Pick a few and save the money in a high-yield savings account or an online brokerage to grow your savings.

Avoid Debt

Debt is a natural follow-up to cutting expenses. If you have debt, it’s best to pay it off as soon as possible. Debt directly impacts your net worth, particularly high-interest credit card debt.

Refinancing your debt is typically the best way to pay off your debt quickly. Check out rates at Avant to see how low you can reduce your interest rate and kill debt.

Kill Your Mortgage

We often think of mortgages as good debt. Debt is still debt, and it holds you back from pursuing other avenues to grow your wealth. Instead of overextending yourself on a mortgage, look for ways to downsize.

If you can’t downsize, refinance your mortgage to a lower rate and keep the same payment. This saves you money on interest and pays off the mortgage quicker.

Check rates at LendingTree to see how much you can save.

Invest as Much as You Can

Investing plays an obvious role in increasing your net worth. The sooner you start, the longer your funds have to grow. Don’t give into the myth you can’t invest with little money.

There are various ways you can invest with little money and grow your wealth. You can even do this with little investing knowledge using a robo-advisor like Betterment. They let you invest with as little or as much as you want, and help manage your investments at a low cost.

As I mentioned earlier, it’s best to save at least 15 percent of your income for retirement. It’s likely you will want to invest even more than that to reach your goals. Instead of looking for reasons why you can’t invest, look for ways to do more.

Grow Passive Income

Passive income is the holy grail of earning income as you earn money while you’re not working. Active income comes from your job or anything else that requires consistent activity on your part.

Passive income does take some initial work to create but should require minimal effort to maintain. Examples of passive income are:

  • Dividend investing
  • Investing in real estate
  • Owning an E-commerce site

Check out our guide on best passive income ideas to find options to pursue.

Automate

I love automation! Automating ensures something is done without you having to remember to do it. Examples are regularly saving money, investing in your 401(k), or paying bills.

Automation, like passive income, takes little effort but is a great tool to grow your net worth. I automate many parts of our family’s finances, and it’s a great way to watch our balances grow with no work on our part.

Don’t overlook tracking your finances as a part of automation. Improving your net worth requires knowing where you stand on a regular basis. Through this, you change your behavior in ways that benefit your ultimate goal.

Knowing average net worth by age is a good way to measure your financial health. We share the average net worth in the US and how to improve your standing.

Average American Net Worth By Age: Bottom Line

 

Whether we admit it or not, we all want to know we stand relative to others. Average net worth by age is a big way we do that. Each situation is different, and we all have different paths we must take.

Don’t get caught in the trap of feeling frustrated over where you stand versus others. Instead, look for ways to improve your financial standing. There are numerous ways you can improve your finances with little effort.

Finally, remember that increasing your net worth is a marathon, not a sprint. Take it in stride, and you’ll be in a better position to conquer challenges as they arise.


Where do you stand in the average net worth by age? How are you actively working to increase your net worth? What is one area you continue to struggle with financially?

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

2 Comments

  • Humble brag alert but by saving and investing I’ve got more net worth than your average Under 35, 35 to 44, 45 to 54, 55 to 64 and 65 to 69 put together.
    Sometimes we get so focused on people who have more than us (or who spend more than us) that we forget that most people are one pay check away from being broke.

    • John Schmoll says:

      Good to hear it! Yep, many are living paycheck-to-paycheck. I speak with people in this situation regularly. Some are there for extenuating circumstances, but many others are by choice.

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