Net Worth: A Measure of Financial Health for Americans
When discussing net worth, the minds of many may immediately jump to the world’s wealthiest individuals such as Jeff Bezos or Oprah Winfrey. However, net worth is not limited to billionaires. In fact, calculating your net worth can provide valuable insight into your overall financial health. The Federal Reserve recently released its Survey of Consumer Finances in October, which reveals the average net worth of Americans by age. This allows individuals to gauge their financial standing in comparison to their peers.
The Federal Deposit Insurance Corporation defines net worth as the difference between your assets and liabilities. Put simply, it is the value of everything you own minus your debts. Assets typically include properties like your home and investments for retirement, while liabilities encompass debts such as student loans and car payments.
To determine your own net worth, you can utilize the FDIC’s calculator.
The most recent edition of the Federal Reserve’s Survey of Consumer Finances, which primarily collected data in 2022, demonstrates that Americans are struggling with debt as the economy tightens. The report shows that between 2019 and 2022, the median net worth of U.S. households surged by 37% to reach $192,900, while the mean net worth increased by 23% to reach $1,063,700.
One may question why the mean net worth is significantly higher than the median. This discrepancy arises because the wealthiest households have a tendency to drive up the average figure.
The Federal Reserve attributes the rise in net worth to various factors, including changes in the U.S. economy, an abundance of families reporting “unusual income” in the survey, and increased savings during the early stages of the COVID-19 pandemic.
To provide a comprehensive overview, the survey breaks down the median and average net worth by the age of the household head, or reference person. The term “reference person” is used to avoid making judgments about the diverse structures of different families. This category also includes economically dominant single individuals.
The table below illustrates the median and average net worth based on the age of the reference person:
Age of family head (or reference person) Median net worth Average net worth
Less than 35 $39,000 $183,500
35-44 $135,600 $549,600
45-54 $247,200 $975,800
55-64 $364,500 $1,566,900
65-74 $409,000 $1,794,600
75+ $335,600 $1,624,100
In addition to net worth, the report highlights a slight increase in the homeownership rate to 66.1% over the three-year period. For families who owned homes, the median net housing value rose from $139,100 in 2019 to $201,000 in 2022.
For those interested in delving deeper into the findings, the full report can be accessed here.
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