Your net worth indicates how comfortable your financial future may be. Find out how to calculate your net worth and track it over time. How you compare by age as an individual or as a couple will help you make better financial decisions.
What Should Your Net Worth Be in Your 40s?
As your career progresses and you build experience, you typically have the opportunity to earn more in your forties. Plus, you may own real estate that you’re paying down and that also appreciates in value. That can turbocharge your wealth accumulation.
However, this is also a decade when you may launch kids out on their own or to college. Be sure that you protect your wealth and don’t overcommit to education loans and expenses. Your children have the opportunity to apply for scholarships, take student loans, and work while they’re in school.
The Federal Reserve reported that the average net worth of households between the age of 45 and 54 is $727,500 and the median is $124,200. A good savings goal during your 40s is two times your annual income.
What Should Your Net Worth Be in Your 50s?
By the time you’re in your 50s, you’ve had three decades to make contributions to your retirement accounts and savings. Starting at age 50 you qualify to make additional “catch up” contributions to most types of retirement accounts, such as a 401(k), 403(b) and IRA.
This decade is also when many people enjoy their peak earning years. You may also have mortgages and other debt finally paid off. Therefore, this is the time to really step up your savings to four times your annual income.
The Federal Reserve shows that the average net worth for households in the age range of 55 to 64 is $1,167,400 and the median is $187,300.
What Should Your Net Worth Be in Your 60s?
Most people in their 60s are seriously considering when and how to retire or semi-retire with a second career. You may not have dependents counting on you for financial support or much debt to speak of at this point.
Your 60s is a good time to downsize your lifestyle to reduce your overall cost of living as you glide into retirement. If you qualify for Social Security retirement benefits, you must decide whether to take them early at age 62 or to wait for a higher benefit at your full retirement age of 66, 67 or beyond.
The amount you can save in your 60s depends on whether you’re still working and whether you’ve accumulated a nest egg that’s large enough to last the rest of your life. A wise savings goal is to have accumulated at least 8-10 times your salary during this decade.
The Federal Reserve data shows that the average net worth for Americans between the ages of 65 and 74 is $1,066,000 and the median is $224,100. By this time, your net worth is an indicator of the type of lifestyle you can enjoy in retirement. In fact, the average and median are nearly the same for those over age 74.