How Does Your Net Worth Compare with the Average American?

When I was in high school, my high school quarterly report card always told me which decile I was in with respect to grades.

Every quarter – top 10%, 2nd half.

There were 495 students in my grade so that meant I was somewhere between 25th and 50th.

Every quarter – same result. Top 10%, 2nd half.

Was that good? Compared to 90%, yes. Compared to 5%, no.

Now that I’m easing into my late-30’s, I realize that the rankings have largely disappeared but the comparisons remain.

I updated this post with U.S. Census data from 2016, reported in late 2019, so all the tables have the most currently available data. The charts still need to be updated, they are using older 2011 data, but the general trends are still accurate.

I use median and average interchangeably. I recognize the two are not the same but for most people, they want to know the median even if they ask for the average. We always, technically, mean median even when we use the word average.

Much like your GPA in high school, if you were to point to one figure in your life that summed up how you were doing – it’s probably your net worth.

It’s really easy to see the people around you with new clothes, fancy cars, and enormous houses and think they’re wealthy.

It’s just as easy to overlook the janitor who drove a 2007 Toyota Yaris, kept his clothes together with safety pins and foraged for firewood. He’s definitely poor… right?

But that ex-janitor donated six million to a local library and hospital.

Most of us are somewhere in-between.

Fortunately, the U.S. Census Bureau collects valuable data that can help give us guidance. With hard data.

Table of Contents
  1. Understanding Average Net Worth
  2. Median Value of Assets for Households by Age
  3. Median Value of Assets for Households by Age and Type
  4. Median Income by Age
  5. Ratio of Median Net Worth to Income by Age
  6. Net Worth with and without Home Equity
  7. Number of Accredited Investors
  8. My Personal Takeaways
  9. How do the rich get richer?
  10. How You Can Increase Your Net Worth

Understanding Average Net Worth

The U.S. Census does more than count the number of people in the U.S. – they collect a lot of other data too.

We know the net worth of householders based on a variety of factors – including age. The data shown below was taken from the U.S. Census Bureau, Survey of Income and Program Participation, Survey Year 2018 – released in 8/18/2020. I recognize that’s a lot of dates but the data is solid and the most up to date. Figures of net worth include home equity (it’s not clear how home equity is determined).

Median Value of Assets for Households by Age

Average net worth by age:

Age of HouseholderMedian Net Worth
Under 35 years old:$9,773
35 to 44 years old:$73,560
45 to 54 years old:$125,400
55 to 64 years old:$194,800
65 to 69 years old:$236,900
70 to 74 years old:$302,300
65+ years old:$251,000
75+ years old:$237,900
Source: U.S. Census Bureau, Survey of Income and Program Participation, Survey Year 2018

Here it is in chart form with quintiles:

Median Net Worth by Quintiles by Age of Householder
Median Net Worth by Quintiles by Age of Householder

You can’t even see the lowest quintile (red) anywhere on most of the bars. In fact, when you do, it’s because it’s negative!

The highest quintile, which represents the top 20%, is often the biggest jump in median net worth for a quintile. Remember, these are median values so the top 10% are literally off the charts.

How do things change if you’re married?

Median Value of Assets for Households by Age and Type

Age of HouseholderMarried-coupleMale householderFemale householder
Under 35:$34,720$10,110$1,305
35 – 54$195,500$39,260$13,730
55 – 64:$375,000$71,580$59,350
65+:$482,900$141,800$128,700
All:$233,100$37,290$28,290

Here these are in chart form (note: the X-axis scales are different!):

Median Net Worth Quintiles - Married Couple by Age
Median Net Worth Quintiles – Married Couple by Age
Median Net Worth Quintiles - Single Male by Age
Median Net Worth Quintiles – Single Male by Age
Median Net Worth Quintiles - Single Female by Age
Median Net Worth Quintiles – Single Female by Age

Overall, independent of age, the median net worth by average household income quintile was:

  • Lowest quintile – $4,715
  • Second quintile – $34,940
  • Third quintile – $80,120
  • Fourth quintile – $188,300
  • Highest quintile – $554,700

Median Income by Age

Before we start looking at the numbers and drawing conclusions, net worth is as much as inputs (income) as it is about outputs (expenses).

For income, there are several data sources but I’m going to go with the Federal Reserve (BLS has great data too) and their Survey of Consumer Finances report for 2019 (released in 2020):

Age of HouseholderMedian Income (estimate)
Less than 35$48,600
35 – 44$74,300
45 – 54$77,800
55 – 64$63,600
65 – 74$50,200
75+$43,100

Ratio of Median Net Worth to Income by Age

The rows of the table don’t overlap the net worth tables but we do have the total sample size of each group, so we can make a best guess “Under 35” and other groupings to get these ratios (median net worth divided by income by age):

Age of HouseholderRatio (Net Worth / Income)
Less than 35:0.201
35 – 440.990
45 – 54:1.612
55 – 64:3.062
65+:5.000

Interesting huh?

Net Worth with and without Home Equity

Here’s something very eye-opening:

Age of HouseholderMedian Net WorthMedian Net Worth
excluding Home Equity
Under 35:$9,773$5,480
35 – 44$73,560$73,560
45 – 54:$125,400$47,410
55 – 64:$194,800$76,610
65 – 69:$236,900$89,670
70 – 74:$302,300$107,400
65+:$251,000$82,640
75+:$237,900$68,470

Ponder the differences in those columns, especially as you reach higher ages. One caveat is that they’re both median figures, so the person with a net worth of $9,773 isn’t necessarily the same person as the one with a median net worth excluding home equity of $5,480 – but this is good enough for our purposes of identifying trends.

As a percentage of total net worth, here’s how home equity stacks up in each age group:

Age of HouseholderHome Equity% of Total
Under 35:$4,29343.93%
35 – 44$46,19062.79%
45 – 54:$77,99062.19%
55 – 64:$118,19060.67%
65 – 69:$147,23062,15%
70 – 74:$194,90064.47%
65+:$168,36067.08%
75+:$169,43071.22%

The median net worth of all Americans is $104,000. The median net worth excluding equity is $34,500 – which means home equity accounts for 66.83% of total net worth.

I have only one thing to say about that – that’s incredible!

When they say that real estate is a way to build wealth, this isn’t what they mean!

My guess is that home equity is essentially “forced savings,” which may not be mathematically optimal but it is effective.

Number of Accredited Investors

An accredited investor is someone who has a net worth greater than $1,000,000 or has income greater than $200,000 a year for each of the last two years ($300,000 of combined income for those who are married) and expects to make that much this year.

In 2014, at the Forum on Small Business Capital Formation, the SEC held a discussion about the rules for accredited investors. In this presentation, they showed that there were over 9 million households that would qualify based on net worth alone. If you include income rules, that number increases to over 12 million households.

This is important because accredited investors can take advantage of private placements, angel investments and some crowfunded real estate platforms.

My Personal Takeaways

We only looked at median net worth, income, and a few other demographic factors. We skipped a lot of factors, like geography, education, and many many more. You cannot look at these numbers and feel good or bad about where you are specifically.

These groupings are huge – 10 year periods – and net worth doesn’t even start until 35. The lowest income range starts at 15! I made nothing (reported to the IRS!) when I was 15 and was working a full-time job when I was 23. That age range is hardly homogenous.

I recognize this is imperfect but so is making decisions based on what everyone else is doing. Remember that this data is a view of American’s net worth, their income, etc. It’s not meant to paint the picture of an ideal financial situation. The average credit card debt is still five figures and no one is arguing that’s a good thing!

With that out of the way, is there anything interesting to tease out of this?

  1. We tend to reach “peak net worth” in our mid to late 60’s, otherwise known as our typical retirement age. Then we draw upon those assets because we stop working full-time. It’s also when Social Security starts paying and that’s an income stream not represented in your net worth.
  2. We are woefully unprepared for retirement. If you have a net worth of $251,000 when you hit 65 and expect to spend only 4% a year, that gives you $10,040 a year or less than $840 a month (and that’s based on net worth, not cash in the bank). Even with the average monthly Social Security benefit at $1341 (2016 data), that’s a little over $2,000 a month in retirement income. That’s the median. Half get more, half get less.
  3. In the past I’ve talked about financial gravity, you escape it when your passive income exceeds your expenses so it becomes an ever-growing balance. When you’re young with low-income relative to expenses, it’s hard to save. It’s why the net worth ratio for those under 35 is 0.1278 – you’ve had neither the time nor the income to accumulate assets. Compare that to 55+, when the ratio is 2-4x.
  4. If you save money, invest it wisely, then you will surely beat the average. In fact, the average is going to be too low. It will be misleadingly low. In fact, just investing at all will put you ahead of most Americans because very few of them own stock at all!
  5. Lastly, net worth is a valuable financial benchmark, but remember it’s not everything.

How do the rich get richer?

One of the striking stats is how uneven wealth is in America. It’s shocking how low the median net worth is but also how high the top end of the range is.

For more insight on the distribution of wealth, and how we got to where we are today, I posed a few questions to Professor Rishabh Kumar, Assistant Professor of Economics at California State University, San Bernardino – he has been studying this for many years:

Professor Rishabh Kumar, Assistant Professor of Economics at California State University, San Bernardino

Q. When we look at the distribution of wealth in America, what are the biggest drivers of wealth accumulation?

The main reason appears to be slower national income growth in the US along with a long upswing in asset prices. With low growth, even a small asset price appreciation can increase the size of wealth relative to national income.

If asset prices increase by 2% in real terms while income grows at 2%, the effect is larger than (say) 4-5% national income growth (USA 1945-70). The implication is that asset owners become richer as GDP and national income slow down.

Q. What do the top 1% do differently than the rest of Americans?

One of the key differences is that the top 1% is a much more unequal growth than (say) the top 10-1%. At the level of the top 0.1%, the size of wealth is enormous, nearly 3 times the average wealth in the top 1%. This means returns to wealth are exceptionally large for the richest 0.1%.

Compared to their wealth and capital gains, their spending is almost too small to be noticed. For most Americans, savings are closer to 0-2% of their income while for the richest the saving rate is as high as 60%.

Not only are the rich holding sizeable wealth but they save more of their income too.

Q. What are some common misconceptions of how the wealth get where they are?

The most common misconception is the fraction of meritocratic rich in the US. While many such as Gates and Zuckerberg have made outstanding gains due to their entrepreneurship, the average wealthy family tends to inherit their position. There is very little chance of downward social mobility once an American is in the top 0.5-0.1%.

With access to better schooling, influential networks, and a sizeable inheritance, kids from these families are able to dedicate themselves to increasing their dynastic wealth as opposed to building it up from scratch.

To sum up: the core driver of wealth accumulation in USA is the difference between the growth of asset prices vs income; those who already own wealth grow it faster than those who build new wealth from wages and salaries.

This makes intuitive sense but it’s one thing to think it and another to see it in the data.

How You Can Increase Your Net Worth

I started tracking my net worth when I started working – the perils of being a spreadsheet junkie!

There’s also a trend, especially among personal finance bloggers, of sharing net worth reports with your audience. I’m never going to do that but sometimes I think those net worth reports can lead people to the wrong conclusions. It’s about the journey and the trendline, not the headline number.

Peter Drucker, the famed management consultant, once said that “What gets measured gets improved.” While the simple act of tracking your net worth won’t automatically raise it, it will start impacting your behavior. If you check in on your money every month, you’ll start caring if things go up or down.

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About Jim Wang

Jim Wang is a thirty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and a farm in Illinois via AcreTrader.

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  1. Tim says

    I’m simply comes down to the financially illiterate American public. It’s my feeling that personal finance classes should be a mandatory part of every high school curriculum. Simple classes in interest, debt control, time value of money. I talk to people all the time who are getting ready to retire and have $250,000 saved and think they are going to be fine. It all depends on the realization of the definition of “fine”. Maybe I was a anomaly but at 27 I thought to myself there was not going to be Social Security when I retire so that’s how I saved. 15% a year in a 401K and never missed it. I had no pension to count on either so I saved accordingly. I will be 62 next month and even after going through a divorce 9 years ago and giving away half, I can say I am in the top 10% of net worth for my age group. I didn’t start to make a six figure income until my late 40’s so it wasn’t like I made a ton of income. I made some very good investments mainly in high tech stocks that returned more than I could of imagined but I did my homework and stuck with them. People have to be taught how to manage their finances. Only then will they be able to control their own destiny.

  2. Ashish says

    There are some very good comments, some specifics:

    * start saving early: compounding is your friend, prioritize tax-free savings & deferred taxes.
    * get rid of credit card debt and interest. The 15+% interest on credit card debt is something I find simply borderline criminal.
    * If you are single, get a room-mate if you can, rent is one of the biggest expense.
    * reduce recurring expense: cable/phone-plan/car-insurance/eating out/gym membership (run on the road/get some weights for home)
    * don’t buy stuff you don’t need. The time spent contemplating a purchase should increase with corresponding cost. Lot of stuff you can buy at discount or even at good-will stores.
    * shop around to reduce cost of expensive items
    * buy used cars, you will save on price & insurance
    * expenses add up very quickly, plan for surprise expenses (car breakdown/medical payments)
    * increase your skills, try and get a job that helps increase pay. Just look around and you will know which jobs pay well and have room for growth with experience and continued learning.
    * Be frugal, but enjoy.
    * use free public resources: libraries: books/movies, public transport. (I haven’t seen a movie in a theater in years, partly I am very busy also)

    Like some one said what is tracked can be improved, track your expenses & savings rates.
    There are low paying jobs which can make the above very challenging, so try and get out of the low paying job by increasing your skills.
    Building wealth needs: Increasing your earnings/reducing your expenses, fairly easy to understand.
    Good luck!

    • Jim Wang says

      Great suggestions, especially the “Be frugal, but enjoy” – all too often we sacrifice 100% to save money and lose sight of enjoying a bit of life in the meantime.

  3. Charles Nunn says

    Enjoyed your comments, spot on. My spouse and I are simple people who have always lived a simple life. No new cars, no big vacations, modest home, etc but we have always been savers (not hoarders). We were and are most comfortable living frugally. By the way, our siblings also live in a like manner.
    We both came from families that lived on the brink of poverty.
    We are retired and we are always amazed at our net worth. It’s nice to know that our children will be pleasantly surprised by the amount of their inheritance when we pass.

    • Jim Wang says

      It’s always nice to be pleasantly surprised!

      I think that comfortable yet frugal is a good way to live. It allows you to enjoy what you enjoy out of life without feeling like you’re being extravagant. It also makes it more likely you won’t outlive your savings. Kudos to you and your family Charles!

  4. Christopher Nowak BFA MLIS says

    My total gross income will be $420,000 for 40 years of work!! THAT IS GROSS. This includes all jobs, EI. insurance, severance payments, self-employed income and CPP. I am still on track for millionaire status by age 65!! I shall not receive any inheritance money or OAS until AFTER age 65. THE KEY: Get a good financial planner early and invest primarily in equities (especially American) to start. I am just as rich as DENIS RODMAN and almost twice as rich as AMY JO JOHNSON!! Both have earned WAY more than $420,000 in their lifetimes!

    DENNIS RODMAN: 27 million gross income and a net worth of $500,000 at age 60. ME: right now: about $370,000 and I will have a net worth of $600,000 at age 60!!!!! My highest paying hourly blue collar wage: $13.50 an hour. That is 75 cents below minimum wage in Ontario today!

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