After being a part of the workforce for a few years, you may finally have enough money to pay off your old student loans and perhaps even purchase your own home with a new car to boot.
At that point, you may also grow curious about your current standing in society. To be more specific, you may be wondering about how you compare to the average American in terms of wealth.
Are you doing as well as expected? Are you lagging behind or are you outpacing others in your current age group?
To find out the answers to those questions, you can refer to the data obtained from the Federal Reserve’s Survey of Consumer Finances.
This article from MarketWatch also highlights the data referring to the average net worth of people living in the United States.
Per the article, the average net worth for Americans under the age of 35 is at $76,200. For the next age group (35-44), the average net worth stands at $288,700.
Folks aged 45-54 have an average net worth of $727,500, while those in the 55-64 age group have an average net worth of $1,167,400. People who are in the 65-74 age group were found to have an average net worth which ended up at $1,066,000. Finally, Americans older than 75 have a slightly higher average net worth of $1,067,000.
Don’t Be Surprised by the Numbers
Upon learning what the average net worth for an American in your age bracket is, you may find yourself panicking a bit. After all, how is it possible for the average American under 35 years old to have already amassed a net worth of over $76,000?
This is where it’s important to remember something that many financial experts such as Truman Advisors point out when it comes to evaluating these numbers.
Remember that the average figure can easily be skewed if there are extreme numbers at the margins. In this case, because of the super wealthy, the average net worth is skewing higher and thus providing a somewhat inaccurate representation of where someone is expected to be financially at a certain age.
To get a better idea of how your net worth compares to the average American of the same age, excluding those in the ranks of the super wealthy, you need to look for the median figures.
Going through the numbers again, the median net worth for someone under the age of 35 is $11,100. People in the 35-44 age group have a median net worth of $59,800, while those in the 45-54 age group have a figure of $124,200. Americans in the 55-64 age range have a median net worth of $187,300 and next to them, the people in the 65-74 age bracket have a median net worth of $224,100. Lastly, Americans over the age of 75 have a median net worth that stands at $264,800.
How You Can Use this Net Worth Data in Your Personal Life
Now that you have a better understanding of how you stack up to the average American in your age group in terms of net worth, the question is what can you actually do with that bit of knowledge?
Though it may seem that knowing the median net worth for the average American is good for nothing more than trivia night, financial experts such as Truman Advisors note that the aforementioned piece of information can help give you a better sense of what you need to do moving forward.
If you discovered that you are actually ahead of the average American with regards to net worth, you can just keep doing what you’re doing knowing that you are in great shape financially. If you find out that you are behind the pace by a significant margin, you can now be more proactive and implement real changes that will address that issue.
However, you should know more than just your net worth if your goal is to continually build your wealth. According to the Better Business Bureau, it’s also important for you to keep tabs on your cash flow.
By tracking where your monthly or yearly income goes, you become better equipped to make real changes that will lead to you having more money in reserve. Keep that going for years and decades to come and you may be able to count yourself among those who are comfortably retired.
Additional Tips for Increasing Your Net Worth
Aside from just monitoring your finances, you can do more to significantly increase your net worth.
For example, if you have outstanding debts in the form of a credit card bill or a mortgage, try to pay those down faster to get your net worth up.
Investing is not a bad idea as well, although you aren’t guaranteed success if you do this.
Perhaps the simplest way to increase your net worth is to simply rein in your spending and save more. Simple doesn’t necessarily mean easy, but if you want to beat out the average American in your age group, those are the things you will need to do.
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