Are You Ahead or Behind? Net Worth Averages by Age

The Average Net Worth by Age—Here’s How You Compare

Ever wondered how your finances stack up to others your age? The best way to find out isn’t by comparing salaries or home values—it’s by looking at your net worth, which is essentially the amount of what you own minus what you owe.

The Federal Reserve’s Survey of Consumer Finances, widely considered the most reliable snapshot of U.S. household wealth, shows how net worth changes across generations. Here’s what the latest data reveal for median net worth by age group:

Two clear trends emerge:

• Net worth rises steadily with age.
• Net worth declines after retirement.

None of this is surprising. Net worth tends to rise with age as compounding, higher earnings and lighter financial burdens take effect. By retirement, many people own their homes outright and have built sizable savings. But once paychecks stop, income drops and those funds are gradually drawn down.

Why Net Worth Is Important—and How to Calculate Yours

Net worth is the value of what you own (your assets) after subtracting what you owe (your liabilities).

• Assets: Things like cash, money in savings or investment accounts, home equity, and valuables, such as jewelry.
• Liabilities: What you owe, including credit card balances, student loans, car loans, mortgages, medical bills, and taxes.

To calculate your net worth, simply tally up the monetary value of all of your assets, subtract your liabilities, and the result is your net worth.

Assets – Liabilities = Net Worth.

A ‘Complete Financial Snapshot’

Net worth is widely considered the best way to gauge an individual’s wealth. As Peter Lazaroff, a financial advisor and chief investment officer at Plancorp, notes, it offers a much more “complete financial snapshot” than simply looking at income, savings, or assets in isolation.

Take Jerry, for example. He might say he’s worth $650,000 because his home is valued at $400,000, he earns $100,000 a year, and has $50,000 in savings and $100,000 invested. But his salary isn’t money he currently has, and he still owes $200,000 on his mortgage and carries $50,000 in debt. Those details change the picture and show why net worth gives a truer view of financial health.

Another advantage: it’s easy to calculate and track over time. Checking in on your net worth regularly can reveal whether your financial decisions—like paying down debt or saving more—are moving you in the right direction.

Smart Ways to Grow Your Net Worth Over Time

Net worth isn’t just a snapshot—it’s a way to track your financial progress. Most experts agree the best and simplest way to grow it is by systematically investing and reducing debt over time.

Investing, Compounding, and Clearing Debts

“Systematically invest both in your retirement account and with after-tax investments,” said Nicole B. Simpson, the founder and CEO of Harvest Wealth Financial. “It allows you to set aside a smaller dollar amount over time with the opportunity for growth that is compounding.”

Simpson also recommends paying off credit card and large debt obligations to keep what you owe as low as possible, especially before retiring.

Lazaroff said that the simplest method to grow net worth is by investing. And one of the best ways to take advantage is to contribute enough to employer-sponsored retirement accounts to qualify for an employer’s match, he said. In some cases, that can mean your company effectively doubles your contributions at no extra cost.

Lazaroff also suggests setting up automatic contributions to low-cost investment accounts and a high-yielding online savings account. “I like to encourage people to start small with automatic contributions—small enough that you might not even notice the money is gone,” he said. “Over time, you can increase your savings if it feels comfortable.” 

Think Long-Term

At the same time, avoid becoming too fixated with short-term results, Lazaroff said, because sometimes it’s necessary and worthwhile to take steps that initially drag down your net worth.

Examples include buying a car to get to work, paying for a course that boosts your earning potential, or even taking time off to recharge. Often these decisions can boost net worth over the long run.