Net Worth Figures of US Households by Age

 

Last week, the Federal Reserve released their 2022 Survey of Consumer Finances. It provided household net worth data by age in terms of average and median net worth. What is net worth? Simply assets minus liabilities. In other words, the value of a household's home, cars, bank accounts, stocks and bonds, 401k’s or 403b’s, any real estate holdings minus mortgages, auto loans, student loans, and credit card debt.

The big surprise in the data provided below is that the young adults (under 35) were doing better than I anticipated. Yes, they carry the bulk of the trillion dollars in student loan debt but not every young adult has student debt.

You will note that there are two columns—one for average net worth and the other for median net worth. The gulf between the average and median appears, as best as I can tell, to be at an all time high. This is because wealth inequality is high now and always roars during a bull market in equities. Remember, these data are from February, 2022.

Why the huge gap between average and median numbers? Let me tell the modest joke that statistic professors have been using for years. There is a bar in a small town with 29 people in it. Bill Gates (worth $120 billion) enters. Now there are 30 people in the bar and the average net worth of folks in the bar in $4 billion ($120 billion divided by 30). The median net worth is about $75,000 as the median represents the 50th percentile in a group with half above and approximately half below that. It always annoys me that some people use average and median interchangeably. They are vastly different. So the wealthy, in each age group, pull the average up substantially. The median figure is a lot more realistic as a snapshot of American wealth.

If you roll up all the age groups, the Fed says that average net worth is $1,059,470 while the median is $192,700. Remember, half of American households are BELOW the $192,700 figure.

Age Range Average Net Worth        Median Net Worth

20-24          $120,896                        $10,800

25-29          $120,185                        $30,160

30-34         $258,073                                $89,801

35-39         $501,289                              $141,200

40-44         $590,718                              $134,730

45-49         $781,923                              $212,800

50-54       $1,132,532                      $272,800

55-59       $1,442,075                      $320,700

60-64      $1,675,214                              $394,010

65-69      $1,836,884.                        $394,300

70-74     $1,714,085                              $433,100

75-80     $1,630,969                              $316,000

Source: Federal Reserve Board, data from February, 2022

If we have a recession next year and a bear market in equities (stocks), the average net worth figure should drop far faster than the median net worth estimate as the wealthier tend to have a higher proportion of their wealth in stocks.

These numbers are fun to look at and do not get too discouraged if you are below either the average or the median for your age group. Living costs vary widely across our country as do real estate values. Your family may be doing just fine. 

I also do not wish to drown you in numbers but I did take a look at the 25th percentile by age (25% of America is below that number and 75% above).

This shaped up as follows:

Under 35 head of household—$4,000

35-55–19k

45-54–51k

55-64–82k

67-74–87k

75+—94k

So, clearly most of Americans are far from being millionaires although a million is definitely not a definition of wealth anymore.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.