Are You Richer Or Poorer Than Your Peers? Here's A Look At The Average Net Worth For Your Income
Ever wondered how your finances measure up? You're not alone. We often think about where we stand compared to others financially – though few of us like to admit it. Getting a sense of your financial health can be motivating, especially when it's not about competition but about setting realistic goals for yourself.
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Many are using this retirement income calculator to check if they’re on pace — here’s a breakdown on how on what’s behind this formula.
What is Net Worth, Really?
Before diving into numbers, clarifying what "net worth" means is important. Simply put, it's what you own (assets) minus what you owe (liabilities). Assets include things like your home, car, investments and savings. Liabilities are things like mortgages, credit card debt and student loans. Think of net worth as a quick snapshot of your financial health. It's a bigger picture than income alone, revealing how much you've kept.
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Net Worth by Income Level
According to the Federal Reserve's latest data, here's how net worth varies across different income brackets:
Under $34,600: Median net worth of $14,000, average of $129,700
$34,600-$59,499: Median of $71,000, average of $218,700
$59,500-$91,899: Median of $159,300, average of $385,400
$91,900-$153,099: Median of $307,200, average of $636,800
$153,100-$245,399: Median of $747,000, average of $1,264,700
$245,400 and higher: Median of $2,556,200, average of $6,629,600
According to Pew Research, an upper-income household's net worth is 33 times higher than a lower-income household's. These numbers show that higher income often aligns with higher net worth but it's not a guarantee. How you manage money plays a huge role here.
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What You Can Learn from the Data
There are a few standout takeaways:
Median vs. Average: The U.S. household median net worth is $192,700, while the average is around $1.06 million. The gap highlights how high-net-worth individuals skew the overall average.
Age Matters: Net worth tends to peak for those aged 65-74, averaging around $1.78 million. Years of saving and investing build up.
Education's Impact: A college degree matters here – graduates have over 11 times the net worth of people without a high school diploma.