Current:Home > Contact-usA middle-aged Millionaires' Row: Average US 50-something now has net worth over $1M-InfoLens
A middle-aged Millionaires' Row: Average US 50-something now has net worth over $1M
View Date:2024-12-23 11:42:18
Sometime around age 50, the average American can now expect a household net worth exceeding $1 million.
How did so many fifty-somethings become millionaires?
Household wealth swelled at a record pace during the pandemic. Between 2019 and 2022, the median net worth of American families jumped 37% to $192,900, after adjusting for inflation. It’s the largest rise ever recorded by the federal Survey of Consumer Finances, released last fall. Surging home values and rising stock ownership fed the surge.
Some of the new numbers are startling. Average household net worth now tops $500,000 for Americans in their late 30s. For late-forty-somethings, it exceeds $750,000. For fifty-somethings, it reaches seven figures.
If you’re a fifty-something and you’re not worth a cool $1 million, do not despair. Those numbers are averages, and the super-rich drive them wa-a-ay up.
Learn more: Best current CD rates
The “median” American household – picture the middle number in a long list of numbers – achieves a net worth of around $300,000 in the 50-to-59 age range, a far cry from $1 million.
Here is how net worth breaks down, decade by decade
To illustrate how wealth stacks up over the years, here is a decade-by-decade breakdown of net worth in America.
Twenty-somethings
- Average net worth: $120,896 (ages 20-24), $120,185 (ages 25-29)
- Median net worth: $10,800 (ages 20-24), $30,160 (ages 25-29)
In our twenties, most of us are just starting out. We’re working our first jobs at relatively low pay. We’re digging out of student debt. On the upside, we probably don’t have many other expenses.
“You’re off on your own for the first time,” said Liz Gillette, a certified financial planner in Edgewater, Maryland. “You’ve got liabilities coming in, like your first car, your student loans. And then, you’re just building your way toward saving for retirement.”
For twenty-somethings, “the biggest factor is debt,” said Jonathan Swanburg, a certified financial planner in Houston. “You’ve accumulated a bunch of school debt, and you haven’t had a chance to work, so your net worth is often in the negative. You’re just trying to get out of the hole.”
Thirty-somethings
- Average net worth: $258,073 (ages 30-34), $501,289 (ages 35-39)
- Median net worth: $89,801 (ages 30-34), $141,200 (ages 35-39)
Thirty-something Americans may be emerging from college debt, buying a first house and starting a family. Their income is probably rising, but so are their expenses: Think diapers.
“Let’s say that they’ve accomplished getting out of most of their debt,” Swanburg said. “They’re starting to put some money into 401(k)s. And that basically starts the process of going into the positive.”
Many thirty-somethings begin to experience the miracle of compounding: Watching the investments they made in their twenties go higher and higher in value, as interest accrues both on the initial investment and on the interest already earned.
Compound interest helps explain how average net worth reaches $500,000 for people in their late thirties.
“Maybe you started investing at 25,” Gillette said. “Now, you’re 35. That money has now had 10 years to grow.”
Forty-somethings
- Average net worth: $590,718 (ages 40-44), $781,923 (ages 45-49)
- Median net worth: $134,730 (ages 40-44), $212,800 (ages 45-49)
When we reach our forties, that house we purchased in our thirties builds serious equity, as the balance of mortgage payments shifts from interest to principal. We’re entering our top earning years. If we have children, they’re getting more expensive.
“People probably have gotten married, bought a home, had kids,” said Peter Lazaroff, a certified financial planner in St. Louis. “It’s what I would call full-on adulting.”
Home equity and appreciation help push average net worth toward the upper six figures, along with the aforementioned miracle of compounding.
“If you had a 30-year mortgage,” Swanburg said, “you’re probably halfway done with it.”
Fifty-somethings
- Average net worth: $1,132,532 (ages 50-54), $1,442,075 (ages 55-59)
- Median net worth: $272,800 (ages 50-54), $320,700 (ages 55-59)
Welcome to Millionaires' Row. In their fifties, many Americans attain the mythical status of millionaire, their household assets worth at least $1 million more than their liabilities.
Our house may now be our prize possession, rising in value as we enter the final years of our mortgage. If we started saving for retirement in our twenties, then our 401(k) is a wonder to behold, after reaping 5% to 10% returns for many years.
“By the time you’re in your fifties, most of what’s in your retirement account is compounded interest,” Lazaroff said.
Your children may be in college, one of the biggest expenses you and they will ever incur. But then they’re done, and your nest is empty. You start planning in earnest for retirement.
“There does seem to be something magical about turning 50 and saying, ‘I’d better get myself in gear here,’” Gillette said.
Sixty-somethings
- Average net worth: $1,675,214 (ages 60-64), $1,836,884 (ages 65-69)
- Median net worth: $394,010 (ages 60-64), $394,300 (ages 65-69)
This is the decade when average net worth peaks, a figure close to $2 million for Americans in their late sixties.
Our sixties is when many of us retire and begin drawing down our accumulated wealth.
“You are asking [people] to flip a switch and to suddenly start spending down their money,” Gillette said.
Yet, for affluent households with decades of investments to draw upon, “you’re living off the income,” she said. “You’re not even touching the principal.”
Seventy-somethings
- Average net worth: $1,714,085 (ages 70-74), $1,629,256 (ages 75-79)
- Median net worth: $433,100 (ages 70-74), $341,300 (ages 75-79)
In their seventies, Americans watch their net worth finally begin to decline.
We are probably not working any longer, and we’re gradually depleting our retirement nest egg. Many expenses are dwindling, but others are rising -- especially healthcare.
“You’re in the spend-down phase,” Swanburg said, “drawing down the 401(k) rather than building it up.”
Time to give CDs a spin?Certificate of deposit interest rates are highest in years
Wealthier families may still be earning more than they spend: A retirement fund of $1.5 or $2 million can kick off a lot of income. Less affluent families may be relying on Social Security.
If you’re approaching your seventies and you don’t have a seven-figure net worth, you are not doomed to live out your days in poverty, the experts say: Every budget is different.
“How much money you need is entirely dependent on how much you spend,” Swanburg said. “Someone who has less than the average but doesn’t spend very much can be very, very wealthy.”
veryGood! (133)
Related
- Black, red or dead: How Omaha became a hub for black squirrel scholarship
- Here's how long you have to keep working to get the most money from Social Security
- Linda Bean, an entrepreneur, GOP activist and granddaughter of outdoor retailer LL Bean, has died
- The abortion pill battle is heading to the Supreme Court this week. Here's what to know.
- Hurricane-damaged Tropicana Field can be fixed for about $55M in time for 2026 season, per report
- The Sweet 16 NCAA teams playing in March Madness 2024
- Maple syrup from New Jersey: You got a problem with that?
- Chiefs' Andy Reid steers clear of dynasty talk with potential three-peat on horizon
- 2025 Medicare Part B premium increase outpaces both Social Security COLA and inflation
- Milwaukee officers shoot, critically wound man when he fires at them during pursuit, police say
Ranking
- Tom Brady Admits He Screwed Up as a Dad to Kids With Bridget Moynahan and Gisele Bündchen
- Mercedes-Benz, Hyundai, Kia, Chrysler among 612K vehicles recalled: Check car recalls here
- Proof Taylor Swift and Travis Kelce Were the True MVPs During Lunch Date in Malibu
- New Jersey first lady Tammy Murphy suspends run for U.S. Senate
- Shel Talmy, produced hits by The Who, The Kinks and other 1960s British bands, dead at 87
- New York City’s mayor cancels a border trip, citing safety concerns in Mexico
- 2 Holland America crew members die during incident on cruise ship
- Ex-NBA guard Ben Gordon, arrested for juice shop disturbance, gets program that could erase charges
Recommendation
-
College Football Playoff ranking release: Army, Georgia lead winners and losers
-
2024 NHL playoffs: Bracket, updated standings, latest playoff picture and more
-
Justin Fields 'oozes talent,' but Russell Wilson in 'pole position' for Steelers QB job
-
Sacha Baron Cohen Reacts to Rebel Wilson Calling Him an “A--hole” in New Memoir
-
Texas man accused of supporting ISIS charged in federal court
-
YouTube mom Ruby Franke case documents and videos released, detailing horrific child abuse: Big day for evil
-
Get This $10 Luggage Scale that Thousands of Reviewers call Extremely Accurate & Invaluable
-
From 'Fallout' to 'Bridgerton,' these are the TV shows really worth watching this spring