3 hours ago 2

What is the average net worth by age?

Your net worth, or the difference between your assets and liabilities, can be a helpful figure in determining your financial health. Ideally, your net worth grows over time as you acquire more wealth and pay off debt.

So. what should your net worth be at this point in your life? While there’s not one right answer, comparing your net worth against the national average for different age groups can be helpful.

Your net worth is the value of everything you own (your assets) minus what you owe (your liabilities). This key financial metric is helpful in tracking your wealth over time.

To calculate your net worth, add up all of your assets, including home equity, bank accounts, retirement accounts, investments, cash, and other valuables. Then, add up any liabilities, such as your mortgage balance, auto loan balance, student loan balance, any other loans, and credit card debt. Finally, subtract your total liabilities from your total assets. This number is your net worth.

The average American family’s net worth was $1,059,470 in 2022, according to data from the Federal Reserve’s Survey of Consumer Finances. Meanwhile, the median net worth was $192,700 for the same year (due to exceedingly high net worths skewing averages, the median data may be more representative of what’s “normal”).

To get an idea of how net worth changes for most people over time, check out the following table, which shows average and median net worth by age:

Your net worth can be positive or negative. In fact, it’s not uncommon to have a negative net worth, especially when you’re young. Ideally, though, your net worth increases over time as you acquire more assets, earn a higher income, and pay off debt.

For example, you may start your career with an entry-level salary and a high student loan balance. However, having fewer expenses in your early years may allow you to make some fast progress in paying down your loans, investing, and saving money.

Later, you may start a family or buy a house. These and other life changes can come with major expenses, such as childcare, school fees, home improvements, property taxes, and more. Such expenses may lead to a temporary decrease in your savings rate or even new debt to cover higher costs.

Later in life, you might be able to accelerate your progress again. You may pay off your mortgage, stop paying for kids’ expenses, receive a large promotion, or get rid of debt. All of these things can help you grow your net worth.

Finally, once you stop working and start drawing down your retirement savings, your net worth could start to fall again. According to data from financial services company Empower, average net worth increases until you hit your 60s, when it begins declining.

If you calculate your net worth only to find you’re not where you want to be, don’t be discouraged. In the same vein, don’t get bogged down by the average and median numbers above. Everyone has different financial privileges and circumstances, as well as their own priorities and goals.

If you’re determined to increase your net worth, there are plenty of ways to do so. Here are some tips for growing and protecting your wealth over time:

Save for emergencies: An emergency fund is part of a stable financial foundation, allowing you to cover unexpected expenses without taking on debt. Work up to saving about six months’ worth of essential expenses and wait for a true emergency to touch this money.

Pay down debt: Paying off debt increases your net worth and opens up room in your budget for savings goals and other expenses. Start by focusing on high-interest debt, like credit cards, which can snowball quickly.
Cut expenses: Cutting unnecessary expenses — things you don’t use or enjoy, for example — frees up more cash to put in your emergency fund, put toward debt, or invest. A scan of recent bank and credit card statements can help you identify areas to cut back.
Increase your income: You can only cut so much from your spending, but you can always earn more. Whether that means negotiating a raise, starting a side hustle, or switching careers, increasing your income can be a quick way to grow your net worth.
Invest: Investing is a key part of building wealth, allowing you to make meaningful progress in growing your net worth over decades. Tax-advantaged retirement accounts, such as IRAs or 401(k)s, can give you the added benefit of tax savings and, in the case of workplace plans, employer matches to your contributions.
Protect your assets: After working hard to grow your net worth, protecting it is equally important. This means insuring yourself, your family, your property, and other assets. You should also think about estate planning, including naming beneficiaries to your accounts and creating a will.