What net worth makes you rich?
The average net worth by age in America
Have you ever wondered how you stack up against other people financially?
It’s not uncommon to want to measure your financial situation with others who are in a similar age range or stage of life. These comparisons are often made on an income basis. In other words, how much money do you make compared to other people your age or in your life stage?
But it’s sometimes more revealing to make the comparison on the basis of net worth, including net worth by age.
Why is net worth important?
But why does “net worth” even matter?
Everyone has a net worth. Your net worth is a key indicator of your financial health, and knowing yours can help you manage your money better, according to Michelle Brownstein, a CERTIFIED FINANCIAL PLANNER™ professional and vice president of Empower Private Client Services.
“Your net worth is a bird’s eye view of your complete financial situation,” she says. “Tracking it over time is a valuable indicator of your financial stability.”
Average net worth by age
Empower conducted proprietary research to determine the average and median net worth of our typical dashboard user. Following are the average and median net worth of these individuals, broken down by age.*
Age by decade
Average net worth
Median net worth
How is net worth calculated?
Net worth is simply everything you own, or your assets, minus everything you owe, or your debts. It is calculated by subtracting what you owe to creditors from what you currently own. Or put another way, it’s the value of your assets after you’ve subtracted all your debts and liabilities.
Let’s consider John. He owns a home currently valued at $300,000. His current mortgage balance is $150,000, so John has $150,000 in home equity that counts toward his assets. In addition, John has an investment portfolio worth $150,000 and outstanding debt of $180,000 in the form of credit card debt, a car loan and his mortgage.
To calculate John’s net worth, we’ll subtract his total liabilities (outstanding debt) from his total assets (home equity and investment portfolio). Not counting possessions like his car, furniture, electronics, jewelry, etc., John’s current net worth is $120,000.
$150,000 home equity + $150,000 investment portfolio – $180,000 outstanding debt = $120,000
FOR ILLUSTRATIVE PURPOSES ONLY.
What makes up your net worth?
Your net worth is the total value of your assets minus your liabilities. Following is a look at what the Federal Reserve Board considers to be assets and liabilities. 1
- Cash within bank accounts, such as checking, savings, money market accounts, etc.
- Prepaid debit cards
- CDs and savings bonds
- Government bonds
- Health savings accounts
- Investment accounts, including 529 college savings plans and individual taxable investment accounts
- Retirement accounts, including IRAs, 401(k)s, and 403(b)s
- Life insurance policies with cash value
- Annuities with equity
- Value of vehicles including cars, RVs, motorcycles, boats, and helicopters
- Value of real estate, including rental homes and primary/residential homes
- Home equity lines of credit or home equity loans
- Credit card balances
- Installment loans, including personal loans, auto loans, and student loans
How do you build net worth?
Now that you have an idea of what your net worth is, you might want to take steps to build your net worth.
Here are a few ideas to consider:
Go automatic. When your money is automatically transferred into a savings or retirement account each month, you don’t need to think about it. As your income grows over time, increase the amount of money that’s transferred into savings.
Pay down debt, especially high-interest credit card debt. Once you are consumer debt-free, consider paying down your home mortgage if you have one.
Watch your spending. The less money you spend, the more you’ll have to save and build your net worth. For example, cut down on eating out at expensive restaurants, pare back your vacation budget and eliminate streaming services that you rarely use.
Building net worth by age
Remember that building net worth is a gradual process that occurs over the course of a person’s lifetime.
As the data shows, net worth tends to increase over a person’s lifetime until the 60s. At this stage, net worth gradually begins to decrease as income falls during retirement and funds from investment accounts are withdrawn to meet living expenses.
Here are some tips for building net worth during each decade of life:
In your 20s
For many people, the 20s are the time in their life when they are starting their professional lives and possibly a new career. Your earning potential may be somewhat limited, which might make it seem difficult to build net worth during this decade. The key is establishing good financial habits and disciplines that will help you build net worth over the rest of your life, such as setting aside a certain percentage of pay each month to save and invest.
In your 30s
One of the keys to building net worth during this life stage is continuing to prioritize saving and investing. It can be easy for higher earnings to get swallowed up in mortgage and car payments, child-rearing expenses and splurging on a few luxuries like nice vacations and fancy dinners. Instead, it’s important to maintain the saving and investing disciplines that were established in the previous decade and even increase the percentage of income saved.
In your 40s
Growing financial responsibilities can make building net worth especially challenging during the 40s. One way to meet the challenge is to avoid falling into the trap of what’s sometimes referred to as “lifestyle creep.”
As income grows, you may be tempted to try to “keep up with the Joneses” by moving into a bigger home, joining a country club, driving exotic cars or going on expensive vacations. It may be OK to enjoy the fruits of your labor, but keeping expenditures like these in check may go a long way toward building net worth during this life stage.
In your 50s and 60s
The 50s and 60s mark the beginning of the “stretch run” toward retirement for many people. The time window for building net worth during the wealth accumulation stage of your life is starting to shrink as retirement draws closer. Given the shrinking window before retirement, one of the most important net worth-building steps for you in your 50s and 60s may be to max out your retirement accounts. It’s also critical to consider paying down outstanding debt during this time.
In your 70s and beyond
During this life stage, the focus usually shifts to budgeting and portfolio withdrawal. Once you’re a retiree, you can either withdraw a set amount of money each month or withdraw a percentage of the portfolio balance each month. With the first strategy, the amount of income is more predictable, which makes budgeting easier. But you generally have more control over the portfolio’s overall drawdown and potential longevity with the percentage method.
The bottom line
Empower’s financial professionals can help you plan strategies to help build net worth during each stage of your life. Consider signing up for Empower’s free financial dashboard for a real-time overview of your entire financial picture.
Need help navigating your finances?
Our free money tools bring your accounts together in one place so you can monitor your investments and plan for your big financial goals.
1 Federal Reserve Bulletin, “Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances,” September 2020.
*Anonymized user data from the Empower Personal Dashboard™ as of March 28, 2023.
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Paul Deer, CFP®
Paul is a CERTIFIED FINANCIAL PLANNER™ professional at Empower. With over a decade of industry experience, Paul’s current role as Vice President of Advisory Service at Empower keeps him focused on a team of financial advisors and their clients.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites.
Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money.
Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Advisory services are provided for a fee by Empower Advisory Group, LLC (“EAG”). EAG is a registered investment adviser with the Securities and Exchange Commission (“SEC”) and subsidiary of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training.
“EMPOWER” and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice.
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How much money makes you “wealthy” in Colorado?
Have you ever wondered how much money it would take for you to be considered rich or wealthy? While people may have different definitions of wealth, it is commonly thought of as having great material resources or assets. Read this article to learn what is considered wealthy and what experts recommend to help you build your wealth.
What is considered “wealthy”?
What does it mean to be wealthy? To some, wealth may be a quantifiable number like a person’s net worth or income. To others, wealth may relate more to their values. Being wealthy may mean less about the dollars and cents and more about a person’s freedom and opportunity to pursue the things that they value in life.
Whatever your definition of wealth may be, it’s usually related to money in some way. To be wealthy, you need to have enough money so that you’re not living paycheck to paycheck. You should be able to cover your living expenses and financial obligations, plan for the future and spend on the things you value.
So how much money is enough? How much do you need in your bank account to be considered wealthy?
According to the 2022 Modern Wealth Survey conducted by Charles Schwab, the average net worth of an American to be considered wealthy is $2.2 million. They also reported that to be it takes a net worth of $774,000 to be considered “financially comfortable.”
In Colorado, it was surveyed that the average net worth of a wealthy person in Denver is $2.3 million, while it takes a net worth of $671,000 to be considered “financially comfortable.” This number may change depending on where you live in the state and what the local cost of living is.
How to measure your wealth
If you’re trying to measure your wealth, you can use the following methods.
Net worth is one of the most common ways of measuring a person’s wealth. You can calculate your net worth by adding up all of your assets and subtracting your debt and liabilities.
Your assets may include things like your retirement accounts, stock market investments, cash in your checking and savings accounts, businesses and real estate.
When calculating your debt and liabilities, look at things like credit card debt, personal loans, student loans, car loans and any other debt obligations.
There is debate on whether or not you should include your primary residence and mortgage in your net worth calculation. In most cases when determining wealth, it is not recommended to include the value of your primary residence in your net worth. However, it may make sense to include any increase in value from the original purchase price.
For example, if you originally bought your home for $300,000 and it’s now worth $400,000, you could include $100,000 in your assets.
When looking at net worth, it is also important to consider your net worth by age. It may not be fair to compare someone who is in their twenties to someone who is older and has had more time to earn, save and invest.
Another metric that people use to compare and measure wealth is annual average income. Having a higher income can help a person build wealth because it gives them a greater ability to save and invest in cash-flowing assets which can help compound wealth over time.
Income can include wages you earn from a W2 job, investments, business/self-employment and side hustles.
To be wealthy in Colorado, you need to earn significantly more. It was reported that the minimum you need to make to be in the top 20% of earners was $143,596 with the average income being $249,285. To be considered in the top 5% of earners, you need to make at least $440,000.
How to grow your wealth
While not everyone wants to or needs to be rich or wealthy, building your wealth can help you improve your quality of life, stress less about your personal finances and make you more financially resilient when times are tough.
Use these strategies recommended by experts to help you build your wealth.
Pay yourself first
One of the best ways to save more money and build wealth is to learn the concept of paying yourself first. This means that when you get paid or receive money, you prioritize putting money into your savings account.
One of the biggest mistakes that people make when it comes to their personal finance is thinking they’ll just save whatever is left over after they’ve paid their bills at the end of the month. By prioritizing saving and paying yourself first, you are more likely to stay on track to your financial goals.
Spend your money on buying assets
Many wealthy people will also prioritize buying cash-flowing assets over buying luxury goods. By buying assets like real estate, businesses and other investments, you can increase the number of income streams you have. This will allow you to save and invest more which will, in turn, increase your net worth.
Overspending, especially on items that you don’t need, can hinder your ability to build wealth. As you continue to increase your income, try to avoid spending more money on increasing your lifestyle, also known as lifestyle creep.
For example, if you get a new job that pays significantly more, you don’t need to buy a larger house or a new more expensive car. Instead, you could use the extra money to increase your savings rate or contribute more to investments.
This isn’t to say you shouldn’t reward yourself for your hard work. The key is finding the balance between spending on things you value and saving for your goals and building your net worth.
Protect yourself against losses
We’ve all seen stories of people who get rich and then suddenly lose it all. This loss could be caused by a variety of different reasons but making sure you have downside protection is key. As they say, getting rich and staying rich are two entirely different games.
One of the simplest ways to protect yourself against losses is to make sure you’re properly diversified. Diversification is important because it spreads your risk across different assets to make sure one event doesn’t have too great of an impact on your portfolio.
Be strategic with debt
Knowing how to use and manage debt is a very important financial skill. Debt, if used correctly, can be used to improve your wealth. Debt should be used for things that can provide value in the future, such as to pay for education or to buy assets.
It’s extremely important to pay off the debt that has high interest rates so that you don’t erode your wealth through interest payments. Missing payments or carrying too high of a balance can also negatively impact your credit score.
Improve your financial literacy
Many successful people will attribute their success, in part, to having a learning mindset. The same is true for money and personal finances. The more you can learn and become financially literate, the easier it may be to understand your finances and build wealth.
Learning about money through free resources, or asking experts and professionals can help you make better financial decisions. Use these tips to help you build your net worth and hit your financial goals.
33 Incredible Millionaire Statistics : 8.8% Of US Adults Are Millionaires
Cite This Webpage Zippia. «33 Incredible Millionaire Statistics : 8.8% Of US Adults Are Millionaires» Zippia.com. Feb. 24, 2023, https://www.zippia.com/advice/millionaire-statistics/
- Average PTO Days
- What Percentage of Americans Live Paycheck to Paycheck?
- Average American Income
- Millionaire Statistics
- Average Salary out of College
- Average Bonus Statistics
- Minimum Wage Statistics
- Union Benefits Statistics
- Savings Statistics
- Average Annual Raise
- There are about 22 million millionaires in the U.S.
- 8.8 % of U.S. adults are millionaires.
- 33% of U.S. millionaires are women.
- 76% of millionaires in the U.S. are white, and white people account for 60% of the total U.S. population.
- There are about 62.5 million millionaires globally, a 11.4% increase from 2020
For further analysis, we broke down the data in the following ways:
Age | Gender | Industry | Location | Trends and Projections
Millionaires by Race and Ethnicity
- 76% of millionaires in the U.S. are White. White people, who are not Hispanic or Latino, make up about 60% of the U.S. population.
- 8% of millionaires in the U.S. are Black. Black people make up about 14% of the U.S. population.
- 8% of millionaire in the U.S. identify as Asian. Asians make up 6% of the U.S. population.
- 7% of millionaires in the U.S. identify as Hispanic or Latino. Hispanic and Latinos make up about 19% of the U.S. population
Millionaire Statistics by Age
- The world’s 100 richest individuals earned their first $1 million at age 37, on average.
- The average millionaire is 57 years old.
- As of 2013, 42% of millionaires are baby boomers (between 57 and 75 years of age), the majority of any age group.
- As of 2013, 19% of millionaires are millennials (between 18 and 31 years of age).
Millionaire Education Statistics
- 88% of surveyed millionaires graduated from college. In contrast, 33% of the general U.S. adult population has graduated from college.
- 62% of surveyed millionaires graduated from public or state schools. Just 8% said they attended “prestigious” private schools.
- 52% of surveyed millionaires earned a master’s degree or higher. This is far more than the 12% of the general U.S. adult population that has earned above an undergraduate degree.
Millionaire Statistics by Gender
- 33% or one-third of the U.S.’s millionaires are women.
- Women make up about 20% of Fidelity 401(k) account holders who have at least $1 million set aside.
- The average age for women to have $1 million set aside for retirement is 58.5.
- The average age for men to have $1 million set aside for retirement is 59.3.
Millionaire Statistics by Industry
- Just 15% of surveyed millionaires hold senior leadership roles. These include positions in the C-suite such as CEO and CFOs as well as vice presidents. In addition, one-third of these millionaires have never made six figures, and less than one-third made an average of $100,000 a year throughout their career.
- The five careers most commonly held by millionaires, according to one survey, include engineering, accounting (CPA), and law. Managers and teachers were the other two careers most represented in this surveyed group of millionaires.
- The finance and investments industry produces the highest number of millionaires. This industry has 371 billionaires that work within it, not to mention millionaires. The top five industries for producing millionaires are:
- Finance and Investments
- Fashion and Retail
Location Statistics of Millionaires
- There are 21,951,000 millionaires in the U.S. This is 39.1% of the world’s total number of millionaires.
- New Jersey has the highest percentage of millionaire households of any state. The five states that have the highest ratios of millionaire households per capita are:
- New Jersey: 9.76%
- Maryland: 9.72%
- Connecticut: 9.44%
- Massachusetts: 9.38%
- Hawaii: 9.2%
- U.S.: 21.951 million
- China: 5.28 million
- Japan: 3.66 million
- Germany: 2.95 million
- United Kingdom: 2.49 million
Millionaire Trends and Projections
- In 2020, the U.S. added 1.7 million new millionaires. This is a third of the total global number of people who became millionaires in 2020.
- From 2016 to 2020, it was estimated that an average of 1,700 people would become millionaires each day. This was on top of the 2.4 million people that were added to the U.S.’s tally of millionaires from 2010 to 2015.
- 79% of surveyed millionaires didn’t receive an inheritance. This means they made their own money instead of relying on wealthy family members for finances. In addition, 80% of these surveyed millionaires grew up in families that were at or below middle-income levels. Just 2% grew up in high-income families.
- The global number of millionaires is expected to reach 84 million by 2025. This is an increase of almost 50%. The number of ultra-high net worth individuals (those who have at least $30 million) is expected to grow by about 60% during that same time frame.
- From 2000 to 2020, the aggregate wealth of millionaires around the world has nearly quadrupled. In 2000, this group was worth $41.5 trillion, and in 2020, they’re worth $191.6 trillion collectively. At the same time, millionaires’ share of the world’s wealth has increased from 35% to 46% during this 20-year span.
- How many millionaires are there in the U.S.?There are 21,951,000 millionaires in the U.S. This is 39.1% of the world’s 56.1 million total millionaires.
- Is a millionaire in the top 1% of wealth in the U.S.?No, a millionaire isn’t in the top 1% of wealth in the U.S. To be in the top 1%, you would need to have a net worth of over $11 million. To be in the top 10%, however, you need a net worth of $1.22 million, which means most millionaires are in this range rather than in the 1%.
- What percentage of the world’s adult population are millionaires?1.1% of the world’s adult population are millionaires. This adds up to about 56 million people. Collectively, this group has about $191.6 trillion and controls about 46% of the world’s wealth.
- Which profession has the most millionaires?The finance and investment profession has the most millionaires. In fact, it also has the most billionaires: 371, to be precise. Not everyone who works in finance and investment will automatically become a millionaire, but this industry produces the most millionaires and billionaires, raising the chances you’ll be able to become one.
- How old is the average millionaire?The average millionaire is 57 years old. This is because it takes smart financial decisions, hard work, and wise investments to become a millionaire, most of which don’t fully pay off until around the age of 50 or 60.
The 56 million millionaires around the globe account for just 1.1% of the world’s adult population and 46% of the world’s wealth. The nearly 22 million millionaires in the U.S. account for 8.8% of the country’s adult population and over 39% of millionaires worldwide.
Many millionaires work in finance, engineering, accounting, and law, but many others work in education or as managers, which may be surprising. However, the industries that produce the most millionaires (and billionaires) in the U.S. are finance and investments, technology, manufacturing, fashion and retail, and healthcare.
About 33% of the nation’s millionaires are women, the average millionaire is 57 years old, and currently, Asian and white people have the highest likelihood of becoming millionaires. However, nearly everyone raises their chances by attending college, with 88% of current millionaires holding college diplomas and 52% earning masters or doctorate degrees.
Many may think you have to come from a wealthy family and go to a prestigious private university to become a millionaire, and while this can help, 79% of surveyed millionaires haven’t received an inheritance, and just 8% attended “prestigious” private universities (62% attended public or state schools).
- Financial Samurai. “Your Chances of Becoming a Millionaire by Race, Age, and Education.” Accessed on December 22, 2021.
- United States Census Bureau. “QuickFacts: United States.” Accessed on December 22, 2021.
- Betway Insider. “ From Millionaire to Billionaire: Fobes Rich List Journeys. ” Accessed on December 22, 2021.
- Rutgers. “Become a Millionaire One Small Step at a Time.” Accessed on December 22, 2021.
- Statista. “Distribution of U.S. Millionaires by Generation, as of 2013.” Accessed on December 22, 2021.
- Ramsey. “The National Study of Millionaires.” Accessed on December 22, 2021.
- CNBC. “How Many Women Millionaires? Depends on the Study.” Accessed on December 22, 2021.
- Business Insider. “This is the Age When Most People Become Millionaires.” Accessed on December 22, 2021.
- Forbes. “How Billionaires Got So Rich in 2021.” Accessed on December 22, 2021.
- Credit Suisse. “The Global Wealth Report 2021.” Accessed on December 22, 2021.
- Statista. “American States with Highest Ratio of Millionaire Households Per Capita in 2020.” Accessed on December 22, 2021.
- Fortune. “1,700 People in America Are Becoming Millionaires Every Day.” Accessed on December 22, 2021.
- The Guardian. “World Gained 5.2m Millionaires Last Year in COVID Crisis – Report.” Accessed on December 22, 2021.
- Financial Gym. “Who Is in the ‘Top 1% and 10%’?” Accessed on December 22, 2021.
- Forbes. “Millionaire Status Is On The Rise With 5.2 Million People Joining The Club.” Accessed on December 22, 2021.
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