The Average Net Worth By Age (2023)
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- Опубліковано 6 лис 2023
- Today we'll look at a study just released by the Federal Reserve that shows the average and median net worth by age of families in the U.S. The average net worth of all families now tops $1 million!
Fed Study Charts: www.federalreserve.gov/econre...
Tools to Track Your Net Worth: www.doughroller.net/personal-...
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I'm actually interested in this idea of investing through an analyst. Sounds like the most sensible thing to do in the market right now. Could you give me a pointer to who you work with, please?
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Love these videos. The data is very interesting. One small thing though. Your image is obscuring part of the plot.
Hard to read the charts with you picture over it.
AMEN! Annoying af, I know he's pretty but we don't need to look at him the whole time.
Thank you for your advice, happy holidays..
Another interesting way to look at this is using the percentile of net worth dimension. You can really see how the top 10 skews it.
Nice analysis Rob! Love your weekly newsletter!
This data doesn’t mean anything because it’s not adjusted for inflation. If you had 130k in 2007 that is completely different from having 130k in 2023
I enjoyed these comparisons, but when you (or the Fed) compare age groups you need to keep in mind that it’s a snapshot in time. Being in the 65 plus group now, and comparing that to when I was in the under 35 group,ignores the fact that I benefited from growth over time and inherited wealth from the older group that (no longer with us) that those in the younger groups have not. That’s apples/oranges, or so it seems to me🤔
Spot on.
You are completely misinterpreting the age cohorts. You speak of the 35-44 cohort as if they are "just now digging out of a 30 year hole". Actually, the people who were in the 35-44 cohort in 1995 are now in the 65-74 chort now and are doing great. To see how a specific set of people have performed over time you need to track them as they move from one cohort to the next over time.
I was just thinking that people had to have been moving from one age group to the next over the time on the charts. It would be interesting if there was a chart that tracked these groups over time in a way that accounts for that. That would truly provide some good numbers for comparison.
Don't need to complicate the data, he's just reporting what the Fed is reporting at each snapshot of time for different age groups.
I wonder if they matters. It's worth it by age. Is the age group better or worse today than 30 years ago. If the numbers are exact we are worse due to inflation.
If you look at this exact data minus primary home you will have your answer. Homes jumped tremendously during the pandemic. A lot of the 30-35 year olds that got into a home before benefited greatly. The opposite happened in 2007 when the prices of homes started to crush
You mean like exactly what he said at 7:38?
Exactly! It’s ALL explained by the value of homes. They crashed in 2007-2008, and recovered during the pandemic. A 35-year-old's net worth was not in housing. And 65+ had a larger portion of nw in investments, so it’s the age group in the middle, with most of their net worth tied up in their houses, that were hit the hardest.
You are clearly wrong. Home ownership for that group is at an all time low.
There are always winners and losers. When real estate is going up you can make some money, but somebody ends up holding the bag eventually when it drops.
@@alansach8437The thing with real estate though is the “bag” you’re holding is still the house you bought, it hasn’t changed. If you bought as a home where’s the “loser” in your summation? It’s the same house. If you bought as rental income, that hasn’t changed at all so again where’s losing in that? I you bought for long term capital gain then just wait. It’s not long term yet.
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Note that the charts include assets, which means that the fluctuations in home values probably account for a very large amount of the increases and decreases. Thus, the charts don't explain a lot about people's net worth exclusive of real property (savings less debt). (I haven't read the comments; I imagine that others have already noticed this. The host did allude to this.)
I was a young adult during the 2008 crash, I started working and saving in 1993, and basically rode the market back up. I was contributing into my work 401k, and during the 13 years after I had many years where I was getting returns above 10%. My 401k went from about 30k in early 2000's to 250k in 2016, then 600k in 2021. It's something like 800k in 2023. I'm hoping to retire in 10 years but the next few years may be slower growth.
I think this a bit pointless unless you can view the networth without housing. Otherwise this is just a chart reflecting people's ability to purchase and hold on to a house. For example based on the taxed assessment my networth has increased 50k in just two years from housing increase, I don't count that but this study would. I think if you were to remove housing it would be a wildly different picture
You can. Go play with the chart.
Totally agree! Lots of people are house rich and cash poor. I like to joke to friends that I can't eat my house so I have always focused on saving and investing. Not focus on the value of my house even though I paid it off early 😉
@@ivanvarykino8202 I don't include my home in Net Worth as I have to live in a home so it is nice to know its value based upon markets of the time but available money is most important.
Also, it is no surprise or should not be that 75+ have increased net worth particularly if the home is included. We old geezers bought a home for few $ and likely have paid it off long ago (1988) and if smart, would save that monthly payment for retirement. Only two ways to have more $ -- earn more or spend less or some combination of the two.
From these stats, gosh Joe Biden has just been horrible as your President -- so stated sarcastically,
As you look at how median net worth has changed over the last 10-12 years by age groups, it is important to realize that the individuals would have changed age group during this time. It is NOT correct to say, for example, that those 35-44 suffering from 2008 is just now recovering by comparing it to the 35-44 in 2022. Instead, all the 35-44 back in 2010, if still alive, would be 45-54 by 2020.
That's why there is a separate chart called "Assets by all families" where age isn't factored it. The chart he showed was to compare the net worth by age group, so of course its not going to track an individual's net worth over time.
What would be interesting to see would be late boomers 1960 to 1965. They were effected the most by ‘08 as they were just starting to hit their peak earning point in their careers that was delayed 10 years. The also weren’t able to save to the degree for retirement as the older generation so where they should have exceeded early boomers they will lag
Finally at minute 7:40 you talk talk about the real reason for the rise and fall of the net worth - the housing bubble, the prices of houses are catching up and exceeding what they were before the crush. It is not as a big of drop that happened in other values. I wish you exclude housing from the net worth to see the true picture.
If you exclude housing from net worth, you're not looking at true net worth. Perhaps he can average financial worth with housing (total net worth) and without housing (liquid net worth).
Real estate values both in 2007 and today make up most of the net worth for most age groups.
Most under 35 have lowest ownership ever...so you're idea is not logical.
he said MOST age groups
The jump in mean net worth can possibly attributed to transfers of wealth between generations (as well as stocks/housing)
Thanks for the link. I believe for large amounts of data when you're trying to find how you stack up against typical, median is a much better measure than Mean/Average. There's a treasure trove of available data on the site.
What was most amazing to me was that people who are in the 35-44 age group today don't have a net worth that is any higher than people who were that age in 1989 (when looking at median values, I'm sure the mean values are much higher now). And the value today includes the impact of the recent run-up in real estate values and the fact that in today's dollars, things generally cost a lot less less today than they did in 1989 (with the exception of real estate). That is not a good sign.
how accurate is the 2023 networth calculator in DQYDJ site based on the same data? if accurate, it gives you a better number on the networth per percentile but i am not sure if the numbers reflected are the median or the mean.
It would be interesting to see the percentages between debt and net worth for each age group when net worth declines does debt increase ?
Networth includes your home. I live in Illinois and own a paid home worth about 350k. Add mine and my wife's savings, and we are at 2.3m. Now take someone in Los Angeles. The vast majority of their net worth could be their home. This is why I'm not an advocate of including your home in net worth, especially when talking retirement unless you are willing to sell and move into something significantly cheaper.
I don't want to compare myself to others but this is good info to know. I personally feel folks will need 10-25x their annual income as net worth outside their home in late 50s to early 60s. Super fortunate to focus on investing in my 20s and 30s and is truly seeing the magic of compound interest - we only started "lifestyle" in our late 30s and 40s
I think it’s going to be as always spending habits and amount of debt. I have no debt and live within my means. I see many who don’t.
36, but during the Great Recession I was in Iraq and afterwards I was in the bottle. But my networth came from getting off the bottle, career growth, and my house getting a ridiculous price when I sold it.
One thing not considered in analyzing these graphs is risk tolerance. Some people within 10-15 years of retirement during the great recession had big losses, and completely bailed on the stock market, going totally conservative on their investments. In doing so they locked in those 2010 losses, and at conservative return rates, it has simply taken 14 years for them to recover to the same level of wealth. Those using the rule of 120 to rebalance their portfolios during that same timeframe also lost out on some of the potential market recovery.
Very interesting! ❤
Change in net worth is affected by inflation. House prices and stocks increased due to elevated inflation. Purchasing power of a dollar has decreased.
This is why the numbers are normalized to constant dollars.
Very interesting data.... But I'm not sure I'm following the information exactly. For example, for Median Net Worth for 65-75 year olds, does the graph reflect the Median Net Worth of the people that are now 65-75 over their last 33 years? Or does it reflect the Median Net Worth of different people that happen to be 65-75 year olds in each of the 3 year periods? I suspect it is the latter... But I think it would be more interesting to understand how each age group fared over the 33 years with just that group represented over time. And then compare the graphs.
Rob made a common mistake. He interpreted the net worth statistics by age in a figure as if they referenced a specific cohort of persons over time. What each line shows is the net worth of DIFFERENT cohorts at the same age (e.g., persons age 35-44) over time. You can't compare across years in a graph and say something like "it took this long for these folks' net worth to recover from the Great Recession." As Dave mentioned, the appropriate way to do this is to start with an age group and then compare their net worth across ages (lines). For example, start with the median net worth of persons age 35-44 in 2007 ($318,110) and compare it to the net worth of persons age 45-54 in 2016 (the closet date to ten years), which is $354,490. This will tell you how different cohorts are affected by economic conditions over time.
Same question here. Rob's presentation, though not necessarily the data itself, suggested that a the change over time reflected a particular group's experience. Instead it seems to show how those in a particular demographic in one year compare to the corresponding group in another age. I seem to recall how he seemed to talk about how a group from 2008 had recovered as of the current date. But the graph doesn't show that. Other graph probably would. For example the house I sold in 2007 took a terrible hit later that decade but is now worth twice what it sold for.
I think this is a smoke an mirror from high home and car prices. When the markets crash that on paper value will evaporate in less than a year.
Fascinating video. I would like to see some of the graphs plotted showing who was president or which party controlled Congress at each point.
Great analysis good job
This is a direct result of jobs lost during the Great Recession and it forcing people to pull from 401k. I’m in the 45-50 age group and I recovered fairly quickly because I didn’t touch my account’s and add more to them. I was fortunate to maintain employment.
As a person who didn't take net worth or retirement savings very seriously until his 30s, my net worth benefitted greatly from the recent housing rate boom. I bought my first house in Jan 2020, so I entered the market just in time to see the value of my house go up by almost 50% over the first few years of ownership. That caused my net worth to increase by like 33% in a single year, but I didnt have as much in retirement as my peers, so it probably had a greater effect on net worth for those with less than satisfactory 401k balances.
For those who had homes before 2007, we learn to not expect the homes to stay up in value. Don't be surprised that your same home drops down by another 30-40% in the next two years after the next recession. People with experience either sell while its high or understands its just not realistic for it to remain in the same levels. This "net worth" is all in your head and can vanish overnight.
There isn't a good reason to really consider your house as part of your net worth especially after a recent boom in prices. We have no idea if these are even long-term prices or if a drop could occur in the near future.
I have a house as well, but I really don't include any of the recent boom as part of an increase of my net worth other than renovations I did to the house that I know increased the overall value.
You really need to focus on investment accounts (401(K), Roth IRA, Brokerage) in order to determine your financial future. You have to live in a location and if you sold your house today you'd still have to pay for increased housing prices across the board anyway.
@@Lolatyou332 I realize that. I don't count my house towards my investment goals and I have a spreadsheet where I separate out my liquid assets to get a better picture. I calculate my net worth as a fun exercise and don't put much stock into it.
Moving your PIP to left would make it easier to see the data you are presenting. Keep up the good work
he's hiding something.....I hate this crap
The video would be better if your image weren´t covering the key data.
I was so depressed when i saw your Mean numbers but the Median numbers soothed my nerves and i got smiling again...
What website are u looking at??
Problem with this data by age group view is, it's not "by cohort". What I mean is, for age 35-44 in recession year 2007, they are no longer in 35-44 age group in year 2022, and cannot be viewed line chart in continuation. It's not an easy thing to collect data by cohort.
Rob enjoy your very informative videos. Have learned more from your videos then others. One question off topic. Noticed you have a couple of footballs on a shelf behind you. Are they from Ohio State?
Trying to find the link to the fed info. Where is it?
Can these graphs be adjusted for inflation?
Under 35 has much less exposure to stock market and real estate, but certainly has A LOT of student loan debt and debt payment is probably their biggest monthly expense. Pause those payments and/or forgiven $10K (when net worth is in the $19K-$40K range) and it is not surprising the under 35 jumped the most.
Yes but the other problem is they were not taught to save the way earlier generations were. I made that mistake with my own children. I was taught from an early age to be frugal, save, budget, not live above my means and keep an eye on having money for retirement.
Yes but how much was insurance (car/health) and taxes back in the day compared to now? The fixed costs to just living are out of control imho.
I clearly remember thinking how rich one would be with a million dollars in assets not so many years ago.Not so much anymore. Now you need a million minimum to think about a comfortable retirement in most areas.
So do those numbers represent starting off at 21 and turning 55 or are they based on current 21-year-olds versus previous 21 year olds who are now 50 plus old
Thanks, very interesting on under 35. Wonder if this has to do with under 35s better able to exploit all the ways to make money online I.e. UA-cam, twitch, tiktok or even AI opportunities, or selling music and other digital products. Also the big tech salaries out of college I doubt top college grads have ever seen salaries this high inflation adjust3d. Add in declining demographics in the young ages and maybe these all add to the low unemployment. All speculation but thanks for this video and link 👍🏾
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Thank you for sharing and interpreting this!
Very interesting for a german, as we tend to say "the USA is about 10 years ahead of us". (... in economic, social and political developments. Not always true but more often than not.)
Is this inflation adjusted? If not, those would be some truly abysmal numbers for any non-boomers...
Median living standard (if you can infer that from net worth and debt) going down continously since the turn of the millenium for Gens X and Y.(?) THX again.
Tag. I believe that the figures are 2022 dollars throughout the graph, so my assumption is that inflation is built in. For Gen X and Y, it is hard to build net worth when young because there are immediate debts incurred when buying and furnishing a first house. This often precludes investing a great deal at the same time, and compound interest on any investment is low (in meiner Meinung).
Rob, why would think that an age group's net worth in constant 2022 dollars would be that much different today than it was 30-40 years ago? The graphs you shared are not tracking people across time, but rather comparing people in a particular age group at one point in time to those in that age group at a different point in time. Perhaps it would be more useful to compare the 35-44 people in 1992 to those in the 65-74 group today, as that would seemingly be comparing the same groups of people at two different points in time. What do you think?
Exactly. In a particular graph the people in 2010 are not the same people in 2020. You have to use 2 graphs, to track a particular set of people.
Would it be useful to use the chart and project back the age group you were in at that specific point in the past? For example, if you're 50 yrs old today then you were 40 yrs old 10 years ago. So you would look at the 35-44 age group in 2013.
I have the same question, the "they" he refers to in the video is not the same individual, correct? The "they" is just people of that age range in that period of time. So as you say, a 35yo in 92 would be 75 in 2022.
Yes it was rather bizarre both the way he described tracking an age group and them "climbing out of the recession" but also comparing previous levels in 2022 dollars. It would be odd if the levels WERE different. That's the point of converting to present day dollars - to level the figures for inflation to THEN highlight differences. The chart that was the most interesting and useful was the one he showed for only 1 second when the individual age groups medians charts were displayed at the same time. What these charts all showed are - Business as usual.
"Rob, why would think that an age group's net worth in constant 2022 dollars would be that much different today than it was 30-40 years ago?"
Because the hope is that future generations are better off than the current one.
Need two separate net worth charts. One with equity included and one without equity. Also, one with pension value included
One big question I have when it comes to these studies is how do the Federal Reserve know people's net worth?? That is such a complex thing to figure out based on so many factors. The numbers seem very low.
It would help to put 10% and 90% data on this as well. Are the high earners skewing the data?
It would be interesting to determine how much net worth was gained due to inheritance especially due to Covid mortality. The sad truth of the pandemic was it impacted elderly population significantly.
I wonder how exactly they are calculating net worth, and is this inflation adjusted?
If I have 500,000 in investments giving me around a 5 % return I can include this in my net worth but if I have a Defined Benefit Pension giving me the same amount which will continue for my spouse can I put a value on that and include it in my net worth?
The "jumps" are due almost entirely to the monetary devaluation - infusing the economy with more debt. Try measuing net worth or annual income by what a dollar purchases today.
I'm finding it hard to believe these numbers. Did the Fed change the way they calculate net worth. They've certainly played around with the way inflation is determined so I wouldn't put anything past them.
Good point...do not trust anything coming from Gov now.
My bad, Median and Average are very different as a result of wealth distribution going away from hourly workers to wealthy owners and stockholders.
It would be interesting to know what percentage of people at each age own a house and what percentage of their wealth is their home equity.
Interesting stuff! I discovered I'm well above the median, but well below the mean. 😅
im 30 years old and got a decent paying job. i'm on track to hit 100k net worth next year! very excited to join other 6 figure net worth individuals out there. it's never too late to invest and never too late to start!
Good for u! Well done!
Keep investing. You'll do well.
Well, aren't you special! 🤣🤣
Good for you. Congratulations. You should be very proud of yourself. Keep it going and you’ll retire a wealthy individual.
grats so I assume you dont own a home or you own it out right? nice nice. hope life keeps going grand for you. I just surious if these younger people like you own a home cause that is what makes my net worth low cause the mortgage? since i owe on the home i dont really have net worth till its paid off?
I think Obamacare greatly affected those under 35, bc they weren’t responsible for their healthcare premiums. The burden was instead placed on the parents up until the age of 25. That’s not something my parents had to pay. Those extra healthcare insurance premiums would have been invested in retirement savings. An extra 7 years where savings was reduced.
I'm about to turn 71. I retired in 2017. Our net worth has gone up despite taking out money for expenses. I've been taking out about 6% of my original IRA total. No inflation adjustments because our expenses have declined. (Move, closing costs, etc.) Despite that the IRA is up 25%. It's all mutual funds and is stock heavy. We manage risk by keeping 18 to 30 months of expenses in a money market fund (in the IRA) so we never have to sell low. Our house which we bought when we moved down here in late 2019 has gone up in value about 60%. Its in a small town in south Georgia. We have no debts except the mortgage at 3.5%. I think we just did everything at the right time - dumb luck, not precsience.
Really need to look at the younger age cohorts in the context of their real estate holdings - or lack of. Not having a mortgage is ‘good’ for your net worth, but not owning real estate is 10:09 bad for your long term financial prospects.
a lot of it is house values. including real estate in these charts heavily screws the numbers in favor of the older groups. if you exclude the value of households’ primary residences, these net worth numbers will be dismal.
Bar graphs would be easier to look at for comparing incomes.
Is a mortgage considered part of debt?
I’m 37 with a paid off 240k home. About 10k in cash. We’re getting there. 1 car note
YOUR video was a little hard to see all the graphs points and the display box for yourself in your office occupied the bottom right corner of the graphs.
Can you post the website address for the Federal Reserve’s report which you have referenced? Thank you!
FYI, it should be this
www.federalreserve.gov/econres/scf/dataviz/scf/chart/
www.federalreserve.gov/econres/scf/dataviz/scf/chart/
Technical Tip about making videos: There is NO NEED for picture-in-picture while you are displaying and describing graphs. Your window of YOU is BLOCKING part of the graph data for the present and recent past. Simply show the graphs and let the viewer see the whole graphic.
This statistic of net worth means that many seniors have very little equity in their homes.
The problem with these charts is that the "2022 dollars" is complete BS. Food, restaurants, gas, housing, utilities, construction costs have all literally doubled in the last ten years, along with lending rates. At least here in California. Yet we keep hearing inflation numbers around 2% except for the last two years which are more like 7%. Something does not add up.
All things for consumers has doubled in just 3 yrs including utils ...borrowing...food...
I spent a big chunk of my assets to buy a Beachfront condo and a new Ferrari in 2018 but though the Ferrari has depreciated a bit the beachfront condo has appreciated a nice bit so I'm not too bad off. My net assets are about $3.5 million and I am 66 years old.
Actually, when inflation is taken into account, most people are (much) worse off than before 2007 or 2020. The younger crowd is really hurting since they likely have very little equity in a house and having to buy one without equity is a large mountain to climb.
Cash Flow is a real big item. Youd be shocked to see how much your net worth would have to be to produce a cash flow of 100,000 dollars . At five percent that would be 2,000,000 dollars and thats in active use not tied up in your house or cars. So you need a steady salary and or a pension to stay alive and of course to help fund your savings.
Are these numbers inflation corrected?
Think about it, People have more money now by double then before ( People with assets). Everyone is complaining about inflation, how they can hardly make it. What happened in 2020 made the rich richer, and the poor poorer by a huge margin. People who had assets can still afford everything and pay the prices, People who didn't are getting squeezed hard.
Much of the net worth numbers are in housing "values" after mortgage principal.
Networth is all good includes house you live in which and end of day you have to have roof over head. Take out houses by average across board $$ values and then do this again on what net worth average minus house. That would be interesting. interesting
$ value/purchasing power has decreased by 99 % since 1974. In just last 3 years inflation has eroded 20 % value of $. So these $ figures do not make much sense unless effect of inflation and quantitative easing(money printing) is taken into account.
I wonder what these numbers look like if you exclude homes and count only liquid investable assets?
Thought the same.
Zero
Great information. Can I make a suggestion? Your video blocks so much of the critical information that you are trying to share, would it be possible to make your video smaller, a circle, or no video while talking about the graph and corresponding information?
What is the net debt of the net worth? How much will the net worth drop when a depression hits and takes 20 years, or more to bounce back? Remember when we went from gold currency to paper? There was a depression. Paper is about to be replaced and another depression will hit.
The best data would be a distribution (3D plot).
Recently retired and unsure if my 401(k) and IRA will provide a stable future. i need an approach that will align with my risk tolerance and financial goals, i set aside $1m to achieve this. Do you suggest i get into stocks or buy a rental property?
I agree. Based on personal experience working with a financįal advlsor, I currently have $2 million in a well-diversified portfolìo that has experienced exponential growth from when i started. It's not only about having money to invest in stõcks, but you also need to be knowledgeable, persistent, and have strong hands to back it up
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
I work with Marisa breton Dollard as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
Two points: Does it allow for inflation and, I think looking at the percentile data, the growth is all in the top 10 percent.
Reasons: cheap trading platforms, real estate boom, and better stock performance. During the pandemic, people were too scared to travel. Nothing surprising.
People 75 and older would be interested in low risk low yield investments. The increase in net worth is probably all due to the real estate bubble
It’s a problem that most Americans net worth is in their primary residence. Can’t buy groceries with your home.
Nominal increases need to be adjusted for inflation
This is interesting. Im 32 and my net worth is ~200K. I don’t own a home though. This is why it’s important to use median and not mean.
Could also have looked at standard deviation to get an idea of the range.
More about stock for younger group and inheritance than it is about property ownership.
I assume this does not consider the effect of inflation.
Medium net worth of 410,000 for 65-74 year olds surprised me. You always hear about the retirement crisis and numbers much different than these.
what's is the median value of a house these days? People in this cohort likely have paid for or nearly paid for houses. You can't spend the equity locked up in a house so even though you may have a high networth you can't cover expenses
@@aknorth1053 Very good point. I’m still surprised the medium net worth is 410,000. People could sell their houses and moved to a low-cost area. I guess the retirement crisis isn’t so bad.
*median
Net worth increases are all about housing. If you owned a home you are sitting good. If you are looking to buy your first home you are wondering how its possible. Net worth dropped when the house market bubble burst.
It's mostly caused by artificial inflated home values. Best way to extract taxes from people is to make them pay artificial capital gains on property values. For instance, if you bought a $50K house in the 1980s and now its "worth" $800K, selling the house exposes you to $750K of potential capital gains. If meet certain conditions, the $250K of gains can be excluded, but it still exposes you to a high tax liability. You're not really worth as much as the chart shows unless you sell the home at those times. In reality, its just another real estate valuation bubble.