There are two ways to look at your net worth by age. The first is to measure your wealth against the median wealth of your age group and peers. This can be modestly helpful as a benchmark, but by and large it tells you nothing about your own needs.
The far more helpful approach is to consider your own financial goals. What do you need to build the life you want, and to afford your own lifestyle in retirement?
At age 35, you still have a lot of flexibility in your net worth. Unlike many other age groups, there really isn’t a “should” for people in their 20’s and mid-30s, and you can even afford a comfortable retirement if you have nothing saved up at all. Talk to a financial advisor to start making a personalized financial plan.
Median Net Worth
We can use the median household as a benchmark for measuring net worth.
U.S. Census Bureau data uses age 35 a hinge. For households 35 and under, the median net worth is about $22,000 according to the most recent data from the . Households age 35-44 have a median net worth of about $97,740. While this data doesn’t necessarily reflect what someone might have in a specific year, it does suggest that either or both the power of compound interest and career progression have a large impact on net worth over time.
This means starting to implement healthy financial strategies today can have an outsized return for your future.
Compare Your Net Worth to Your Goals
Again, median numbers may not be particularly helpful for your personal circumstances. For example, a doctor who couldn’t even enter practice until age 28 with $200,000 in debt may have a net worth still in the red at 35, but he can more than likely overcompensate in the long run thanks to his compensation.
The point is, you should measure your net worth by your own, individual situation. What your net worth should be depends entirely on what you have and what you, personally, need.
When it comes to retirement, the net worth that you should have at age 35 depends on the retirement you want to afford. The more money you will want at age 67, the more money you need to have at age 35. There are a number of ways to measure this.
Overall, the rule of thumb is to judge by your salary. Typically, by the time you enter retirement you want to have 10 times your annual salary saved up in your retirement fund. One common benchmark is to have two times your annual salary in net worth by age 35.
So, for example, say that you earn the U.S. median income of $74,500. This means that you will want to have $740,500 saved up by age 67. To reach this goal, at age 35 you may want to have about $149,000 in savings. This will keep you on track with ordinary benchmarks.
However, you can also judge this by doing the math on what you need to save each month to reach your goals. In that case, your benchmarks can be much lower. In fact, your net worth at age 35 can be nothing at all.
Say that you are looking to save the benchmark $740,500. You contribute 10% of your income each month to your retirement account, for an annual contribution of $7,450 per year. You have this money held in an S&P 500 index fund earning the market’s historic average of 10% annual returns. You are 35 years old with nothing saved at all and you intend to retire at full retirement age of 67.
Based on this profile, you will have $1.79 million by the time you retire. This is not only more than you need, it is plenty of money to afford a very comfortable retirement. Talk to a financial advisor today to build a plan to grow your net worth.
Your net worth by age 35 will help you continue saving for your future. What you should have on hand depends entirely on your personal financial goals, but at this age there is still a lot of room for flexibility.
Retirement Savings Tips
- The best way to make plans is with specific numbers. Use SmartAsset’s retirement calculator to figure out what you need and how you can plan your savings to reach your own retirement goals.
- A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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