This is the net worth of Americans by age

A good salary and a comfortable lifestyle don’t necessarily translate into healthy finances, much less the actual ability to build wealth. The key term is net worth, a personal (and easy to calculate) metric that includes much more than income and expenses, And it’s not limited to the Forbes ultra-rich.

In the United States, the average income of a typical family is around US$75,000, but inflation persists and the high cost of living is causing even people earning more than US$100,000 to make ends meet. is (51 %) (data from lender LendingClub published in September).

Some cities like San Francisco, Seattle or Washington DC are so expensive that residents earning $150,000 have been pulled back into the “lower middle class” as they struggle with the exorbitant prices of basic amenities like electricity, housing, child care and transportation. Have been.

But overall there is good news. The average net worth of American households has seen a 37% increase According to the Federal Reserve’s Survey of Consumer Finances (SCF) published in October, it was about US$192,900. This increase “This was the biggest in three years. More than double the next highest on record in SCF history,” the report reads. The agency saw an increase across all age groups.

We all have a net worth and that’s why it’s important to calculate it

So what exactly is net worth and why is it important? Net worth is a broad form Helps measure overall financial health Of any person or family. According to CNBC Select, “Think of it as a snapshot that shows you where you are on your financial journey.”

Net worth and how it fluctuates over time is a useful indicator for achieving financial stability and helps you understand where your money is going, as well as give you information about how to change that movement in the future. Allows to prepare strategy for. Naturally it is different from income because We don’t necessarily keep every dollar we earn, Instead, we buy, borrow, and invest, so the total value of our assets and cash can constantly rise and fall.

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It’s easy to calculate: You add up all your assets (cash in bank accounts, investments, savings and retirement accounts, plus the value of your assets, which might be your house or your car) and then you subtract your liabilities ( All your debts, including student loans, credit card payments, or mortgages). The end result is your net worth.

Understanding this can provide a better idea of ​​our financial health than income alone. “Let’s say you earn a six-figure salary, but you have a poor home, you’re deep in debt, and you have no retirement savings. Your net worth will reflect the fact that your financial health is on life support, they explain from MoneyWise.

Age Groups and Their Net Worth

Based on the SCF report, MoneyWise experts broke down the net worth of Americans to see where each age group falls on the wealth spectrum. First of all in this list, it is important to understand the difference between average value and median value. The average will generally be higher, as the figure is strongly influenced by the income of the highest-earning group, whose totals inflate the average, even though most have significantly lower sums.

• under 35 years: US$39,000 (average) / US$183,500 (average)

• From 35 years to 44 years: US$135,600 / US$549,600

• 45 years to 54 years: US$247,200 / US$975,800

• 55 years to 64 years: US$364,500 / US$1,566,900

• From 65 years to 74 years: US$409,000 / US$1,794,600

• above 75 years: US$335,600 / US$1,624,100

The SCF data shows that the biggest increase came among those under 35, who “saw their average net worth more than double, but remain the least wealthy age group.” During this, The richest group were people aged 65 to 74Their average net worth has increased by 33%, with many benefiting from decades of compounded growth in their retirement investments.

Retirement account balances declined in 2022, but have now begun to recover due to improving market conditions and positive savings behavior. U.S. The number of retirement savers in the U.S., according to data from Fidelity Investments, the largest provider of 401(k) savings plans The amount of money in their 401(k) accounts of $1 million or more increased by 20% In the fourth quarter of 2023.

The average 401(k) plan balance at the end of 2023 rose to $118,000, up 14% from a year earlier and the highest level in nearly two years. Additionally, the average individual retirement account balance in the fourth quarter of 2023 increased 12% year over year to $116,600.

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