Once you reach your 40s, you may have more wealth to your name.
Your net worth is something you may not fixate on so much during the first half of your career. At that point, you may be more inclined to focus on things like paying off your credit cards and saving up money to buy a home.
But once you reach your 40s, the concept of net worth may become more relevant to you. And you may be curious as to how your net worth compares to that of your contemporaries.
What does net worth look like for 40-somethings?
If you're not familiar with the concept of net worth, it's basically your assets minus your debts. Let's say you own a home worth $500,000 and have $100,000 in savings. But let's also assume you owe $300,000 on your home. That would leave you with a $300,000 net worth.
Personal Capital surveyed consumers to see how their net worth breaks down by age, and it found that among 40-somethings, the average net worth was $756,000. However, when we look at median net worth for that same age group, that number falls to $170,767.
What this tells us is that median net worth is a far more representative figure for 40-somethings. When you have an average that's way higher than a median, it's generally because a few higher figures drove the average up.
So in this case, perhaps some of the people surveyed by Personal Capital in their 40s happen to have a net worth of $2 million or $3 million. That's apt to drive the average upward, which is why you're better off relying on the median as a measure of how 40-somethings are doing.
Are you pleased with your net worth?
Maybe you're happy with your net worth but want to see it keep growing. Or maybe you now realize that your net worth lags behind the median net worth for 40-somethings, and you want to do better.
The good news is that if you're in your 40s, it means you still have many more working years to earn money and build wealth. But a few key decisions along the way could lead you to a higher net worth. Those include:
- Boosting your job skills to land promotions and higher earnings to pad your savings with
- Investing money you aren't using or don't need in the near term and holding your investments for many years
- Taking advantage of accounts like IRAs and 401(k)s, which offer tax breaks for savers
- Avoiding unhealthy debt, which can monopolize your income, cost you money, and make it difficult to build more savings
Ultimately, net worth is something that tends to grow with age. But there are definitely ways you can be proactive in boosting yours.
In fact, it wouldn't hurt to set a goal for yourself so you have something you can work toward. Just make sure your goal is realistic, though.
If you have a current net worth of $150,000 and you're 42 years old, doubling your net worth by age 45 may be a challenge. But do you have a better chance of doubling your net worth by age 50? Absolutely -- especially if you stick to the advice above.
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FAQs
Average net worth by age
| Age by decade | Average net worth | Median net worth |
|---|
| 30s | $260,090 | $38,343 |
| 40s | $693,583 | $140,159 |
| 50s | $1,257,943 | $312,890 |
| 60s | $1,603,384 | $489,261 |
4 more rowsTo calculate your net worth, you subtract your total liabilities from your total assets. Total assets will include your investments, savings, cash deposits, and any equity that you have in a home, car, or other similar assets. Total liabilities would include any debt, such as student loans and credit card debt.
What is the average net worth of the average person? ›
Average Net Worth by Age
| Age | Average | Median |
|---|
| 35-44 | $437,770 | $91,110 |
| 45-54 | $833,790 | $168,800 |
| 55-64 | $1,176,520 | $213,150 |
| 65-74 | $1,215,920 | $266,070 |
2 more rowsAug 14, 2023
Average Net Worth of an American Family
The average net worth of someone younger than 35 years old is $76,300, as of 2019. From there, average net worth steadily rises within each age bracket. Between 35 to 44, the average net worth is $436,200, while between 45 to 54 that number increases to $833,200.
How much money is enough at 40? ›
Most financial experts recommend having at least two to three times your annual income saved for retirement by the time you reach 40. “A general rule of thumb is to have three times your salary saved by age 40.
What is the top 1 net worth at 40? ›
Here is the top 1% net worth by age group, courtesy of DQYDJ:
- Top 1% net worth for ages 18-24: $435,076.59.
- Top 1% net worth for ages 25-29: $606,188.36.
- Top 1% net worth for ages 30-34: $956,944.74.
- Top 1% net worth for ages 35-39: $4,034,486.45.
- Top 1% net worth for ages 40-44: $7,909,636.79.
Net worth is a good indicator of your financial health. Your net worth is your assets minus your liabilities. It's what you have left over after you pay all your liabilities. Net worth is a better measure of someone's financial stability than income alone.
How do you answer an asset question on FAFSA? ›
The first asset question asks for the total current value of cash, savings accounts, and checking accounts. As the question states, the FAFSA wants to know the balance sitting in these accounts on the day you submit the FAFSA, so check those figures and report them. Though feel free to pay your monthly bills first!
What is an example of a net worth? ›
For example, if you have a mortgage on a house with a market value of $200,000 and the balance on your loan is $150,000, you can add $50,000 to your net worth. And by the way, your income is not included in a net worth calculation.
What is average net worth mean? ›
The mean net worth is the average net worth; the net worths of a group averaged into one. The median net worth is the value that is right in the middle of all of those numbers. Median net worth is arguably the one that gives you a more realistic view of an age group's financial situation.
A common rule of thumb for determining what your net worth should be at any given age is to divide your age by 10, then multiple that by your gross annual income. So if you're 40 years old making $100,000 a year then you should have a net worth of $400,000.
What is the average net worth of a 25 year old? ›
Even in this age group, the average net worth by age is skewed toward the high end. If you are between ages 25-29, the average is $49,388 and the median is even further behind at $7,512. If you are between the ages of 30-34, the average net worth is $122,700 and the median net worth is $35,112.
What is the average net worth of a 22 year old? ›
Average Millennial Net Worth By Age
| Age | Average Net Worth |
|---|
| 25 (Class of 2017) | -$23,704 |
| 24 (Class of 2018) | -$28,706 |
| 23 (Class of 2019) | -$33,984 |
| 22 (Class of 2020) | -$39,915 |
14 more rowsMay 31, 2023
Mean and median net worth by age (2019)
| Age Group | Mean Net Worth | Median Net Worth |
|---|
| Less than 35 | $76,300 | $13,900 |
| 35-44 | $436,200 | $91,300 |
| 45-54 | $833,200 | $168,600 |
| 55-64 | $1,175,900 | $212,500 |
2 more rowsNov 30, 2022
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- People with the top 1% of net worth in the U.S. in 2022 had $10,815,000 in net worth.
- The top 2% had a net worth of $2,472,000.
- The top 5% had $1,030,000.
- The top 10% had $854,900.
- The top 50% had $522,210.
Millionaires comprise about 8.8% of the American population. The average net worth of a millionaire in the U.S. is $2.2 million, according to Charles Schwab's 2022 Modern Wealth Survey. New Jersey boasts the highest rate of millionaires, with nearly 10% of households having a net worth of $1 million or above.
What is the net worth of the top 5%? ›
On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
How much does an average 40 year old make? ›
Median Earnings by Age in the United States
| Age | Weekly Earnings | Annual Wage |
|---|
| 20 to 24 years old | $737 | $38,324 |
| 25 to 34 years old | $1,018 | $52,936 |
| 35 to 44 years old | $1,223 | $63,596 |
| 45 to 54 years old | $1,239 | $64,428 |
3 more rowsMay 23, 2023
Financial services company Charles Schwab released its annual survey in which it analyzed 12 of the largest U.S. metro areas and found that it takes a net worth of $2.2 million to be considered "wealthy" in the U.S. by other Americans. That number remains unchanged from 2022.
