The Big Question: Am I on Track?
One of the most common financial questions is, "How does my net worth compare to others my age?" While it's natural to be curious, it's important to remember that personal finance is personal. Averages can be skewed by ultra-high-net-worth individuals. However, benchmarks can be a useful starting point to gauge your progress.
Average Net Worth by Age in the U.S.
According to the most recent Survey of Consumer Finances from the Federal Reserve, here are the median net worth figures for different age groups:
- Under 35: $40,000
- 35-44: $135,600
- 45-54: $247,200
- 55-64: $363,600
- 65-74: $409,800 (Note: Median is a better indicator than average as it is less skewed by outliers.)
A Better Goal: The "10x Income" Rule
A more personalized benchmark comes from Fidelity, which suggests aiming to have 10 times your final pre-retirement salary saved by age 67. To stay on track, they suggest these milestones:
- By age 30: Have 1x your annual salary saved.
- By age 40: 3x your annual salary.
- By age 50: 6x your annual salary.
- By age 60: 8x your annual salary.
How to Set Your Personal Net Worth Goal
Instead of chasing averages, focus on the number you need to achieve your specific goals.
- Define Your Goal: What do you want to achieve? Financial independence? A comfortable retirement?
- Calculate the Cost: How much capital will you need to fund that goal? For retirement, a common method is the 4% Rule, which suggests you need a portfolio 25 times your desired annual spending. (e.g., for $60,000 in annual spending, you'd need $1.5 million).
- Work Backward: Use a compound interest calculator to determine how much you need to save and invest each month to reach your goal by your target date.
Your personal net worth target is the most important number. Tools like Moneko can help you not only track your current net worth but also set and monitor progress toward these specific, meaningful goals.