Average Net Worth by Age and How to Increase Yours

Andrew Weber is a senior director of Planning Philosophy, Research and Guidance at Northwestern Mutual.

Everyone’s financial journey looks different. Savings goals and projected timelines can vary by family, but it can be an eye-opening exercise to compare your net worth to others to see where you fall.

Below, we explain what net worth is and how you can calculate yours. Then we review the average net worth across different age groups and offer some advice to help you improve yours if it’s not where you’d like it to be.

What is net worth and how is it calculated?

Calculating your net worth is simple: Add the value of your assets and subtract the value of your debts. To get it right, be sure to include all your assets and liabilities. For assets, this includes things like cash savings (including your emergency fund and any sinking funds), investment portfolio, retirement savings and the value of your home and any other property you may own (a second home, vehicles, jewelry, collectibles, etc.). For liabilities, you’ll need to consider all of your debts, which can include your mortgage, auto loans, student loans, credit cards, personal loans and more.

A positive net worth means that you have more money than you owe. In other words, you could theoretically liquidate your assets, pay off your loans and still have money left over. A negative net worth means the opposite: You owe more than you have. A net worth of $0 means that the value of your assets matches the value of your liabilities exactly.

Average net worth by age in the U.S.

The average net worth in the U.S. varies based on age. That’s because over time you have more opportunity to save and pay down debt. Moreover, as you age, you are also likely to earn more. So, while the average American under 35 has a net worth of just $39,000, the average American who is over 75 has a net worth of $335,600.

Mean average vs. median average

It’s important to know that when someone talks about the “average net worth” of a given population, it’s generally one of two completely different numbers: the mean average and the median average.

To calculate the mean average net worth, we add up all of the wealth held by the population and divide it by the total number of people in that population. The resulting number is often skewed by outliers, such as ultra-high-net-worth individuals.

To calculate the median net worth, we line up the net worth of each individual in order, from smallest to largest, and find the number that is exactly in the middle. This reduces the influence of outliers and offers a more representative view of the average. And that’s why we chose to use it in the above example.

With that in mind, the following chart shows the median and mean net worth by age in the U.S., as collected by the Federal Reserve in its 2022 Survey of Consumer Finances.

As you can see from the numbers above, both median and mean net worth tend to be lower for younger individuals, who are typically just starting out in their careers. It then gradually increases with age—likely following the career trajectory of workers entering their prime earning years—before leveling off and beginning to decline for older individuals, who are likely drawing down on their savings during retirement.

How to build your net worth

If you’re happy with your net worth, congratulations! Keep doing what you’re doing and continue working toward your financial goals. If you feel like you’ve fallen behind (or just aren’t where you thought you’d be by this stage of your life), there are steps you can take now to boost your net worth in both the long and short terms. Generally, the best way to increase your net worth is by understanding your cash flow and increasing your savings rate.

Here are some ways to grow your net worth:

Review your budget

Get an understanding of where you’re spending your money. You might find small ways to achieve savings by doing things like canceling unwanted subscriptions, but budgeting also helps to show you where you’re spending your money. Once you see where all your money is going, ask yourself: Is that where you want it to go? If not, make adjustments so that the priorities in your budget reflect your values.

Your advisor can be a great partner in suggesting adjustments. For example, our advisors typically recommend a 20/60/20 budget split: 20 percent into savings, 60 percent on essential expenses and 20 percent on discretionary spending. But, if you’re more interested in saving aggressively, they may recommend a bit higher percentage there. Discussing your priorities together will help you determine the right actions for you.

Avoid bad debt

Using credit to increase your lifestyle today is actually harmful to your future self. Then, instead of putting money toward future goals, you need to pay off past spending, which can really get in the way of helping you improve your net worth. Creating a realistic budget, building an emergency fund to cover unexpected expenses and managing your savings rate are great ways to make sure you can cover your daily expenses and not go into debt in the first place.

But if you have significant debt, paying it down will reduce your total liabilities and increase your net worth even without making more money or increasing the value of your existing assets. Really what you’re doing here is paying off past spending. While there’s no one right way of getting out of debt, keep these things in mind:

1. Higher interest rates mean more interest charges over the life of a loan. Paying off your debts with the highest interest rates first will typically translate into the highest possible savings.
2. Not all debt is created equal. It’s generally a good idea to prioritize paying off so-called “bad debts” (like credit card debt) before turning your attention to good debt (a mortgage or your student loans).
3. Interest rates can change. Depending on the type of debt you have, there may be steps you can take to lower your rates to make repayment easier. Consider transferring your credit card debt to a new card with a 0 percent introductory rate or refinancing your student loans/mortgage to a lower rate.

It can also be helpful to take steps now to help prevent yourself from relying on debt in the first place.

Boost your income

Another effective way to boost the other side of the equation (your assets) is to make more money so that you can hold onto more of it after you've paid your bills.

You might, for example, start a side hustle to earn a little extra income. If you’re looking to grow your income by switching jobs, you may be able to negotiate a raise, bonus or improved benefits package.

Whatever route you take, it's important to avoid lifestyle inflation as you start to make more money. Remember what's driving you and try to hold onto as much of that extra income as possible to increase your net worth over time.

Invest for your future

Be intentional about how you’re saving for short-, mid- and long-term retirement and savings goals. And as you build savings plans, think about what you’re doing with your money to help it grow. When you invest, you're putting your money to work in the market, where it can compound and grow over time—ideally matching and surpassing the rate of inflation.

There are a lot of different ways to get started with investing, including these:

1. Diversifying your investments so that your portfolio isn’t too heavily concentrated in a single asset or asset class
2. Investing on a schedule to take advantage of dollar-cost averaging, reducing volatility and helping you make investing a habit
3. Reinvesting any dividends you receive from your investments to really take advantage of compounding
4. Considering your timeline and risk tolerance as you choose your investments so that you don't take on more risk than you're comfortable with

Prepare for retirement

As you start approaching retirement, you’ll want to begin thinking about how you can use your assets to generate an income—whether this means renting out a piece of property, shifting a portion of your portfolio to fixed income investments, purchasing an annuity or some other strategy.

But before you take those steps, it’s important to consider how much income you’ll actually need in order to have the kind of retirement you want—and how much money it will take to generate that income.

Consider working with a professional

Whatever your financial goals are—whether it’s saving enough money to start a business, sending your children to college, financing a comfortable retirement or eliminating money worries—a financial advisor can help you build a plan to get there.

Here are some of the ways a financial advisor can help:

• Designing a plan that makes room for saving and investing
• Building and managing a diversified portfolio tailored to your goals, timeline and risk tolerance
• Making sure you’re taking advantage of tax-advantaged accounts to save for retirement, college savings or other goals
• Implementing a strategy for converting your assets into income once you reach retirement
• Ensuring you are taking the appropriate steps to protect your net worth with the right kinds and amounts of life insurance and disability insurance

It starts with a conversation. Your advisor will get to know what’s important to you—including your net worth goals—and help design a plan to get you there.