Broker Check

What Should My Net Worth Be?

| November 18, 2021
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Net worth is a term that we commonly hear when we are talking about celebrities or business tycoons,
but every person has a net worth. Your net worth is a term that represents the difference between all
your assets and all your liabilities, basically what you own versus what you owe. Your assets include
items like investment accounts, retirement accounts, the value of your home, the value of your vehicle,
any cash that you have, and items of value like fine jewelry. Your liabilities include debts like mortgages,
auto loans, student loans, personal loans, credit card debt, or medical debt. Your net worth can be a
useful tool to indicate how you are managing your finances and can serve as a motivator towards your
financial goals.


How do you know what a “good” net worth is though? It is an extremely subjective measure. Some
people hold themselves to higher financial standards than others and circumstance plays a huge role in
what a “good” net worth will be. For example, say you are 22 years old and just starting your first fulltime
job. You took out loans in college to afford school and worked part-time saving up a little bit of
money for when you graduated. At this age you may only have a net worth of $2,000, maybe even less
but this number would likely indicate that you are doing okay for someone your age. If you were getting
ready to retire, though, and had this low of a net worth, it would be worrisome.


Net Worth in your 20s
According to Bankrate US, the average net worth for those in their 20s is $56,984 with the median being
just $6,500. This average looks nice for this age, however; the median is much more reflective of the
population. The average is likely so high due to a select group skewing the data whereas the median is
showing us the middle of everyone in the list. In your 20s, it is not uncommon to have a negative net
worth considering that many people now have significant student loan debt and are entering into their
careers at relatively low levels of earnings. During this decade of your life, it will be important to focus
on saving and paying off debts. Start a retirement account as soon as you can--time is on your side when
it comes to saving for retirement, and the earlier you start the better off you will be. Start building up an
emergency fund in your savings account for the unpredictable future. Also, when you have the extra
money, start investing and let compound interest do the work for you. As mentioned before, student
loan debts are one of the main liabilities dragging you down at this age so get those paid off as fast as
you can.


Net Worth in your 30s
Bankrate US says at this age the average net worth is $174,002 and the median is $32,600. Many
experts recommend that between the ages of 30 and 35 your net worth be equivalent to your annual
income. Getting out of debt is going to be a main priority at this age, working on closing out any student
loan debt is necessary. Then, once you pay that off, it is a good time to start saving for your kids to go to
college. At this age you. will probably be taking out a home mortgage as well, be sure to stay consistent
and try to get ahead on those payments if possible. That emergency fund from your 20s will hopefully
now be built up to be equal to about three to six months’ worth of income for any unexpected events.
Don’t forget to continue investing and saving for retirement!

Net Worth in your 40s
The average net worth in your 40s is $457,783 with a median of $93,460, according to Bankrate US. This
is the time when you will likely be making the most money in your career so take advantage of it. If you
had been neglecting your retirement account before, now is the time to increase those contributions.
Your kids are probably starting to get expensive around this time, be sure to stay on top of any creditcard
debt and expenses. This is also a good time to make sure their college savings are on par for the
amount you would like them to have. Diversify your investment portfolio, and finally; make sure to have
some fun, make time for vacations and family.


Net Worth in your 50s
The average net worth stated by Bankrate US is now $998,416 with a median of $152,400 as people
move into their 50s. The kids are likely off to college by now and you are looking ahead at retirement.
You should be maxing out your retirement contribution limits, especially in the back half of this decade.
You should also be building some serious home equity and working on lowering your mortgage
principal.


Net Worth in your 60s
Bankrate US reports that the average net worth of people in their 60s is $1,121,534 and the median is
$221,200. You will probably be reaching your peak net worth in this decade as you head into retirement
with the current retirement age typically being 67. Soon, you will no longer be saving and instead
starting to dip into those savings to begin living off. Hopefully you have saved up well enough to be able
to delay your social security benefits so that you can maximize that number to supplement your income
in your retirement. Following your 60s, your net worth will most likely decline as you use up your assets.
Make sure you create an estate plan in order to protect your legacy and map out your budget wisely to
ensure you have plenty left for the remainder of your lifetime.

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