Many of us are curious about how our financial standing stacks up against others. You might believe you’re in a good financial position, but how do you compare to the average? Conversely, if you feel you’re having a hard time accumulating wealth, could it be that you’re actually doing better than most? Here are some insights from statistics on average net worth.
Key Findings
- The average net worth in the US is $748,800, and the median net worth is $121,700.
- Older Americans (aged between 65 and 74) are the richest, with an average net worth of $1,217,700, while the nation’s youngest (under 35 years) have an average net worth of $76,300.
- The net worth of homeowners is 40 times higher than that of renters.
- White Americans have the highest median net worth of $189,100, while Black Americans have the lowest median net worth of $24,100.
- Higher levels of education consistently correlate with higher net worth.
- Connecticut has the highest average net worth, while Hawaii takes first place when considering median net worth.
What Is Net Worth?
Before we learn the net worth of an average American, it helps to understand clearly what we are talking about. What is net worth, and how can you calculate yours?
Net worth is an estimate of your absolute monetary value. Simply put, it is a term that describes what remains in dollar terms when you subtract what you owe (your debts) from what you own (your assets).
Net worth is typically evaluated for households, not individuals.
Median vs. Average (Mean)
The median and mean (or average) are two different figures.
- The median is the point at which half the group is above and half below.
- The average or mean is calculated by adding the total net worth of all members in the group and dividing by the number of members in the group.
The difference is that an average can be skewed by a small number of people. A few people with very high net worth will pull the average up, but the median will not rise.
You use the median when you do not want outliers to influence the value.
Average American Net Worth
According to the Federal Reserve’s Survey of Consumer Finances, the average American net worth in 2019 was $748,800. In contrast, the median net worth was $121,700, meaning that 50% of Americans had a net worth below that figure[1].
Three years before (in 2016), the median net worth was much lower ($103,500) and maintained an almost similar gap with an average net worth of $736,000.
The average net worth has always been greater than the median. This difference increased steadily between 1989 and 2007 but shot up after the 2007/2008 Great Recession.
The growing difference implies that wealth inequality is rising.
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Learn more: For a clear understanding of the “Rich vs. Wealthy” debate, our latest post breaks it down succinctly.
What Makes Up the Net Worth of Americans
In 2020, the bulk of household net worth (64%) was made up of home equity and retirement accounts. Retirement accounts specifically represented 36.2% of Amerian’s net worth, while 27.8% came from home equity[2].
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The primacy of home ownership in defining net worth is clear from this table. With 61.9% of households holding those assets at a median value of $150,000, homes occupy a central place in the American net worth equation. This fact will be reflected in much of the data that follow.
Average Net Worth by Age
When we look at the average net worth, older Americans (aged between 65 and 74 years) are the richest, with an average net worth of $1,217,700. On the opposite end are the nation’s youngest (under 35 years), whose average net worth is a measly $76,300[1].
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Median Net Worth by Age
The median values are considerably lower. For example, the median net worth for folks between 65 and 74 years drops by nearly $1 million to a mere $266,400, a 78% drop. The same is true for the youth, whose net worth collapses by about 82% (to $13,900) when looking at median values. This suggests significant wealth inequality across all age brackets[1].
Average Net Worth by Home Ownership
We’ve already discussed the connection between home ownership and net worth. This is most clearly illustrated by the gap in net worth between homeowners and renters[1].
- Homeowners had a median net worth of $255,000 in 2019.
- Renters had a median net worth of $6,300 in 2019.
That places the median net worth of homeowners at an astonishing 40 times higher than that of renters.
Learn more: If you’re weighing the decision of renting vs buying a home, our latest article breaks down the pros, cons, and key considerations.
Average Net Worth by Education
Net worth is closely tied to academic achievement. The average college graduate is worth eleven times more than an American without a high school diploma. That is when using the average net worth approach. The gap gets greater when we switch to median values: the average college-educated American is worth 14 times more than a non-educated individual[1, 3, 4].
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Average net worth by education (2013-2019)
| Highest education achieved | Average net worth (2019) | Average net worth (2016) | Average net worth (2013) |
| No high school diploma | $137,800 | $157,200 | $108,300 |
| High school diploma | $305,200 | $249,600 | $199,600 |
| Some college | $376,400 | $340,600 | $317,900 |
| College degree | $1,519,900 | $1,511,100 | $1,031,600 |
Median net worth by education
| Highest education achieved | Median net worth (2019) | Median net worth (2016) | Median net worth (2013) |
| No high school diploma | $20,500 | $22,800 | $17,200 |
| High school diploma | $74,000 | $67,100 | $52,500 |
| Some college | $88,800 | $66,100 | $46,900 |
| College degree | $302,200 | $292,100 | $219,400 |
Average Net Worth by Occupation
Members of the managerial and professional classes belong to the wealthiest cohort of working Americans. This group of Americans has consistently reported the highest net worth (average values) since 1989. Retired Americans typically have a higher net worth than individuals in sales, services, or technical occupations[5].
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Average Net Worth by Race
White Americans hold more wealth, whether you use the average ($993,400) or medium ($188,200) net worth by race values. Black Americans have the lowest net worth on average. An average White household is about seven times richer than an average Black household[1,3]. If we use the median values (closer to the reality on the ground), a White American household is about eight times richer[6].
Average net worth by race (2013-2019)
| Race | Average net worth (2019) | Average net worth (2016) | Average net worth (2013) |
| White, non-Hispanic | $993,400 | $933,700 | $727,800 |
| Black | $146,800 | $138,200 | $102,100 |
| Latino | $203,300 | $191,200 | $111,000 |
| Multi-racial and other identities | $486,800 | $457,800 | $383,600 |
Median net worth by race (2013-2019)
| Race | Median net worth (2019) | Median net worth (2016) | Median net worth (2013) |
| White, non-Hispanic | $188,200 | $171,000 | $146,400 |
| Black | $24,100 | $17,600 | $13,600 |
| Latino | $36,200 | $20,700 | $14,200 |
| Multi-racial and other identities | $74,500 | $64,800 | $42,500 |
The difference in net worth among races is not always inconsistent with the average household income. For example, White Americans have a higher average and median net worth than Asian Americans. However, Asian Americans’ average household income is higher than all other races.
This may be explained by the fact that the homeownership rate for white Americans is 72.1%, while the rate for Asian Americans is 61.7%. The median age of Asian Americans is also a relatively young 37, against 44 for white Americans. Older people are more likely to own homes and more likely to have paid off a higher amount of their mortgage[6].
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Average Net Worth by State
Connecticut posted the highest average net worth as of 2019; in fact, the top five states are:
- Connecticut ($733,400),
- Massachusetts ($587,100),
- California ($628,400),
- Washington ($566,900),
- and Maryland ($565,200).
This image changes drastically when the focus shifts to median net worth. The top 5 states by median net worth are:
- Hawaii ($373,200),
- California ($200,300),
- Massachusetts ($251,000),
- Washington ($170,400),
- and New Hampshire ($243,600).
Interestingly, states like Massachusetts, Maryland, Hawaii, and Connecticut rank highly in terms of net worth, yet they are not among the top ten richest by GDP. This tells you that a state’s gross income doesn’t necessarily correlate with the wealth of its residents[7].
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Learn more: For those wanting to clarify the “gross pay vs net pay” terminology, our recent post provides an informative explanation.
FAQs
By age 60, the average net worth for Americans is $1,175,900. The median net worth is $165,700.
By age 40, the average American’s net worth is $436,200, and the median net worth is $91,300.
The post Average Net Worth in 2023: By Age, Education, Race & More appeared first on FinMasters.
