Net worth—or the total of your assets minus liabilities—is a snapshot of your financial health at a specific point in time. It's one data point you can use to track your progress toward meeting financial goals. For example, if you pay off a chunk of debt, your net worth will increase.
Here's the average net worth by age, and how to calculate and increase yours.
What does net worth mean?
Net worth is the value of everything you own minus everything you owe. As a window into your saving and spending habits, it can help lenders better understand your financial stability and may be used to determine whether you qualify for loans, like a mortgage.
To calculate your net worth, take the sum of your assets and subtract the sum of your liabilities. Examples of assets include cash savings, investments, and the market value of your home, car, jewelry, small business, and the like. Liabilities are your debts and obligations—money you owe and need to repay. This can include credit card debt, as well as mortgage, auto, and student loans.
In some cases, an item can be an asset and a liability. For example, a home or car is an asset but if you're still paying it off, it's also considered a liability. To determine how this impacts your net worth, you'll need to subtract what you owe from the home or car's market value.
If you get a positive number when you subtract your liabilities from your assets, you have a positive net worth. If the number is negative, you have a negative net worth. One thing to note: Your salary doesn't determine your net worth. A person with a low salary can still have a high net worth if they own a number of assets outright, while a person with a high salary could have debts that decrease their net worth.
Average net worth by age
Unsurprisingly, net worth tends to rise with age. People may earn more as they advance in their careers, creating room in their budgets to pay down debt and purchase more assets. Plus, money saved and invested at younger ages will have had years to potentially grow and benefit from compounding. Net worth tends to continue climbing until people stop receiving work paychecks and start living off their savings.
Here's a breakdown of the average net worth of American households by a person's age, according to the latest Federal Reserve Survey of Consumer Finances, with data collected in 2022.1
Average household net worth by age
| Age of reference person | Average net worth |
|---|---|
| Under 35 | $183,500 |
| 35-44 | $549,600 |
| 45-54 | $975,800 |
| 55-64 | $1.57 million |
| 65-74 | $1.79 million |
| 75+ | $1.62 million |
Median net worth by age
While average net worth is good to know, median net worth by age may be more representative of the state of wealth across the country. That's because median net worth looks at the 50th percentile of earners—those right in the middle—while average net worth factors in outliers of people with very high and very low net worths. Looking at the median is a more informative tool to determine how your wealth compares to others in your age range.
Here's a breakdown of the median net worth of American households by a person's age, according to the same Federal Reserve Survey of Consumer Finances.2
Median household net worth by age
| Age of reference person | Median net worth |
|---|---|
| Under 35 | $39,000 |
| 35-44 | $135,600 |
| 45-54 | $247,200 |
| 55-64 | $364,500 |
| 65-74 | $409,900 |
| 75+ | $335,600 |
Average retirement account balance by age
The average 401(k) retirement balance across all age groups is $127,100, according to Fidelity Investments' Building Financial Futures Q2 2024 report. Here is the average 401(k) account balance for different generations.
Average 401(k) retirement account balance by generation
| Generation | Average 401(k) balance |
|---|---|
| Baby boomers (born 1946–1964) | $242,200 |
| Gen X (born 1965–1980) | $182,100 |
| Millennials (born 1981–1996) | $62,000 |
| Gen Z (born 1997–2012) | $12,000 |
Keep in mind that 401(k) account balances are just one chunk of someone's net worth—and might even be just one part of their retirement savings. An investor could have long-term money saved in other types of retirement accounts or a brokerage account.
Tips to build net worth
It's important to keep an eye on your financial future while meeting your of-the-moment money needs. Here are some tips to increasing your net worth, no matter where it falls now.
Cut expenses and stick to a budget. There are many creative, painless ways to help minimize your bills and potentially save thousands each year. Use the ideas that work for you and then create a budget that keeps your spending in check while leaving a little room for treats. It's especially handy for when you're just starting out and perhaps not earning a lot, but it's also an important practice during retirement when you won't necessarily be able to replenish what you spend in the same way as you might have when you were earning regular paychecks.
Build your emergency savings. Everyone needs a cushion for unexpected expenses. The more money you have saved, the less likely you'll need to rely on credit cards or other high-interest loans if something goes wrong. Start by setting aside $1,000, then keep adding to it until you have at least 3 to 6 months' worth of regular expenses saved. It could pay to keep these savings separate from your investments so they're accessible if you need them and you're not tempted to withdraw for reasons beyond emergencies.
Stay ahead of your debt. More debt means more interest payments you'll never get back, which can lead to lower savings. If you have debt, especially high-interest debt, make a plan to pay it down. Stay on track by making all minimum debt payments on time, ideally limiting your total payments to 36% or less of your income, and avoiding taking on more debt with high or variable interest rates. If you have a mortgage, paying it off early is a great way to save money because it can reduce the total interest you'll pay over the life of the loan. And then what you've paid toward your principal applies to your net worth.
Start investing for retirement. Open and contribute to tax-advantaged retirement accounts like an employer-sponsored 401(k), and if your company offers a match, contribute at least enough to get that match. It's like free money, and as long as you stay at the company long enough for that match to fully vest, you get to keep all of it. If a company plan isn't an option, you can open an IRA on your own—that's an Individual Retirement Account and you don't need an employer to sponsor. Either way, consider inching up your pre-tax contributions by at least 1% each year. For instance, if you make $60,000 a year, contributing 1% more would amount to less than $12 per week. But if you make this change at age 35, you could potentially wind up with nearly $110,000 more for retirement at 67 than if you didn't bump up your contributions.3 That way, you could reap the maximum tax advantages, such as reducing your taxable income by the largest allowable amount or paying less in taxes on withdrawals as a retiree with lower income.
Consider an HSA. If you're eligible, a health savings account (HSA) could help you save for both medical expenses today and other expenses in retirement. HSAs allow you to contribute pre-tax dollars from your paycheck—and let you spend the money tax-free on qualified medical expenses, such as doctor visits and prescriptions. If you have an employer-sponsored HSA, your employer might even add to your contributions. Again, as you earn more, you could contribute more to maximize the tax benefits and the power of compounding in this investment account.
Invest for other goals. There aren't tax advantages to brokerage accounts like there are with retirement accounts, but brokerage accounts have no contribution limits and fewer rules about withdrawals. That's why many people choose to invest in brokerage accounts for nonretirement goals, such as buying a house, which could boost your net worth.
Maximize your work benefits. The next time you're hunting for a new job or comparing multiple offers, look beyond salary and factor in retirement and other benefits that could help you save, such as higher contribution matches, shorter timelines to vest (or qualify for the full match value—which can take a few years), and student loan repayment assistance. Some companies even offer credits toward health expenses in retirement, which could earn interest over time.
Use a sensible retirement withdrawal strategy. As you start to take money from your retirement accounts, understand how the withdrawals may affect your taxes. By spreading out taxable income evenly over retirement, you may be able to potentially reduce the taxes you pay on Social Security benefits and the premiums you pay on Medicare. Fidelity's Retirement Strategies Tax Estimator can help you estimate the potential effect of retirement income strategies on your taxes.