- Net worth is a metric that reflects the amount of wealth one has accumulated.
- Being older, owning a home and having a college degree correlate to having a higher net worth.
- Setting financial goals, such as saving more and paying down debt, can help individuals increase their net worth.
In 2019, the average American family had a median (halfway from the top to the bottom) net worth of $121,700 and a mean (average) net worth of $748,800. While there are other metrics individuals can use to assess their financial situations, such as the average American savings, net worth is often a more holistic reflection of wealth as it takes into account the multiple ways one can build wealth, as well as how much one owes.
However, if you're trying to assess your net worth and how it compares with others in your demographic, a blanket nationwide average may be of limited use. Using the Federal Reserve Survey of Consumer Finances — a federal survey that evaluates the financial situation of Americans across the nation — we'll discuss how the average net worth in the U.S. varies across several demographics, including age, education, state and housing status.
What makes up net worth?
Net worth takes into account two factors: your assets (what you have) and your liabilities (what you owe).
- Assets are the resources you own that are worth money. This could include the cash in your emergency fund, checking account, savings and retirement accounts, money invested in the stock market, cryptocurrency and, potentially, the value of your life insurance policy. It can also include the value of any real estate you own, including your home equity, as well as vehicles, art and other valuables.
- Liabilities are your financial obligations, or the money you owe. This can include the balance due on loans — including student loan debt, credit card debt or debt on personal loans or auto loans and mortgages — and any other debts you may have.
You can easily calculate your net worth using the formula below:
|How Is Net Worth Calculated?|
|Net worth = Total assets - Total liabilities|
For example, an individual with $100,000 in their bank accounts, $500,000 in retirement savings, a home worth $350,000 and valuables worth $50,000 would have total assets worth $1,000,000.
If that individual has $200,000 in total liabilities — for example, $130,000 outstanding on their mortgage, $50,000 in car loans and $20,00 in student loans — they would have a net worth of $800,000.
$1,000,000 in assets - $200,000 in liabilities = $800,000 net worth
The formula above can also be used to calculate household net worth, using the household’s total assets and total liabilities. For example, a married couple with $1,000,000 in combined total assets and $300,000 in combined total liabilities would have a household net worth of $700,000.
Knowing your personal or household net worth can provide insight into the amount of wealth you or your household has generated. However, once you have your net worth calculated, you may wish to assess how your net worth compares with that of fellow Americans in your demographics, as well.
Average net worth by age
The Federal Reserve conducts research to track changes in Americans’ financial health, including how the average net worth of Americans changes over time. As part of their research, the Fed reports on the mean and median net worth by age group so you can learn the average net worth of an American.
Mean and median net worth by age (2019)
According to the Fed's most recent report, Americans’ average net worth by age is as follows:
|Age Group||Mean Net Worth||Median Net Worth|
|Less than 35||$76,300||$13,900|
|75 or more||$977,600||$254,800|
What is a good net worth by age?
Your financial situation often changes as you move through life, and, as you might expect, the average net worth increases with age. High-net-worth individuals tend to be older because they have had decades to amass nest eggs and grow their personal capital. The average mean net worth for an average 55 to 74-year-old, for instance, is over $1 million — making the average family in this age bracket millionaires — while those younger than 35 years old have a mean net worth under $100,000.
However, age is just one of several factors that influence a family’s average net worth. Education, among other factors, affects average net worth, as well.
Average net worth by education
Getting a college degree often directly influences an individual’s earning potential and has an impact on net worth. In general, college graduates tend to have a higher average net worth than those with a high school diploma or no high school diploma.
Mean and median net worth by education (2019)
To see how mean and median net worth can change with education, see the Federal Reserve's findings below:
|Education Level||Mean Net Worth||Median Net Worth|
|No high school diploma||$137,800||$20,500|
|High school diploma||$305,200||$74,000|
Average net worth by housing status
Owning a home is one way many American families build wealth. As you build equity in your home — by paying off the mortgage and as the home increases in value — your total assets, and thus your net worth, increase. As a result, homeowners tend to have a higher net worth than those who rent their homes.
Mean and median net worth by housing status (2019)
Here's how the Federal Reserve Survey of Consumer Finances says that equity can impact mean and median net worth:
|Housing Status||Mean Net Worth||Median Net Worth|
|Renter or other||$95,600||$6,300|
Average net worth by state
Where you live in the U.S. also has the potential to affect your net worth. Some regions of the country have higher average property values than others, for example, which directly impacts a homeowner’s net worth. Differences in average income from state to state may also influence the average household net worth.
The U.S. Census tracks net worth in each state across the country. The states with the highest average net worth, by the median, include Hawaii, Massachusetts and New Hampshire, and the states with the lowest average net worth include Mississippi, West Virginia and Tennessee.
Mean and median net worth by state (2019)
Here is a full look at how mean and median net worth appears across each state according to the Federal Reserve Survey of Consumer Finances:
|State||Mean Net Worth||Median Net Worth|
|Alaska||Data not available||Data not available|
|District of Columbia||$355,900||$24,000|
|Vermont||Data not available||Data not available|
Why is net worth important?
Net worth is one of several factors that provide insight into your financial health. For many Americans, building wealth is an important part of personal finance, and many Americans set financial goals that will increase their wealth. If your goal is to build your emergency fund and save for retirement, for example, you may see your progress reflected in your net worth.
Increasing your net worth has practical benefits, as well. Owning tangible assets, like a home or vehicle, may make it easier to access credit. And a strong credit history — for example, from paying off your mortgage — helps improve your credit score.
Still, net worth doesn't provide a complete picture of one’s financial health. Several markers of wealth, such as owning a home, do not always correlate with a high net worth. An individual with a large outstanding balance on their mortgage may, temporarily, have a negative net worth. It's important to take into account several factors when assessing your financial health, rather than looking at net worth alone.
How to increase net worth
There are several steps one can take to build wealth — and thus, increase their net worth. Consider the following tips as you work toward your financial goals.
- Manage your living expenses: Keeping your costs relatively low provides room in your budget to save, so you can begin building wealth.
- Pay down debts: Reducing your liabilities increases your net worth, so make debt repayment a priority. As you pay down debts with high interest rates — such as credit card debt — you can allocate those funds to meeting your other financial goals.
- Save for the future: Use a savings account, individual retirement account (IRA) or other savings vehicle to build your nest egg. Consider utilizing automatic savings to regularly move money from your checking account into your savings account to make saving easier. Over time, your wealth will grow, thanks to compound interest.
- Invest intelligently: Investments can help your wealth grow over time, so consult a financial professional for more insight into your options, such as investing in the stock market.
Finally, consider consulting a financial advisor for personalized advice to help you increase your net worth. An expert can offer suggestions based on your lifestyle and financial situation to help you achieve your goals.
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