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What Should Your Net Worth Be at Retirement?


As you approach retirement, your net worth is a key indicator of your financial preparedness. Net worth is a fundamental financial metric in retirement planning because it shows how much wealth you have accumulated and can use to support yourself after you stop working. The net worth varies according to a number of factors, including income and gender, but one of the major determinants is age. As you get older, your net worth normally increases. Knowing where you stand compared to averages can help you assess if you need to make changes to get on track and be prepared when you reach retirement. Sit down with a financial advisor for tailored guidance on reaching your net worth goals.

Net Worth Basics

Your net worth is simply your assets minus your liabilities. Assets include your retirement accounts, home equity, savings accounts and investments. Liabilities are debts you owe including mortgages, credit cards, student loans and car loans.

To calculate your net worth, first add up the current value of all your assets. Then total the balances of all your debts. Finally, subtract your debts from your assets to get your net worth.

Tracking your net worth over time shows whether you’re progressing financially. A higher net worth means you have more assets supporting you. A lower net worth suggests you may need to reduce debts or increase savings. Checking your net worth annually or when major life events occur can help you course-correct if needed.

Net Worth and Retirement

Your net worth matters for retirement because it represents what you have accumulated to support yourself. In retirement, you stop working to earn income, but living expenses such as those for housing, food, healthcare and transportation continue. Your net worth can provide income to support your lifestyle through retirement account withdrawals, investment earnings and proceeds from downsizing.

Many factors such as income can influence net worth. Age also affects net worth, as net worth typically climbs as you grow older.

Knowing your average net worth at retirement gives you a benchmark to assess your preparedness. Similarly, figures for net worth by age can tell you how you are doing on your retirement plan. If your net worth lags behind your peers, you may need to reevaluate your savings rate or retirement timeline. If you’re ahead of the curve, you can confirm that you’re on the right track.

Typical Net Worth at Retirement

A senior couple reviewing their net worth at retirement

According to the Federal Reserve’s Survey of Consumer Finances, here are the median and average net worth figures for near-retiree and retired households:

Age Range                          Median Net WorthAverage Net Worth

The median represents the middle. That is, half of the households had more and half had less. The median better represents a typical net worth since averages get skewed upward by high-net-worth outliers.

Net worth declines after age 75 according to the Fed figures. This may be due to retirees spending their net worth to pay for living expenses. Also, note that the Fed does its survey every three years, and the results of the most recent survey completed in 2022 may show a different picture due to the effect of the pandemic and other factors. 

For context, in its How America Saves report, Vanguard provided figures specifically for households with retirement accounts:

Age Range                          Median Account BalanceAverage Account Balance

The Vanguard figures indicate that a saver’s gender as well as age also affects current balances. Men’s average and median balances were 43% higher than women’s balances in 2022, although these differences had narrowed from previous years.

What Your Figures Mean

These averages provide reference points, but your target net worth depends on your unique situation. If your net worth falls short of your peers, it doesn’t necessarily mean you’re behind. For example, if you expect an inheritance, life insurance settlement or other windfall at or after retirement, a shortfall in your current net worth may not be a major concern.

It could well be a prompt to look closer, however. If you’re unsure about whether your net worth is likely to be adequate, here are some questions to ask yourself:

  • Do I have other income sources like a pension?
  • What will my spending needs be?
  • How long do I need retirement savings to last?

Get clarity on your income, expenses, and goals before concluding your net worth is insufficient.

If, on the other hand, you have a net worth well above average, this may still not be an excuse to coast. Consider if you could retire earlier or budget bigger if you keep building your net worth. Look for opportunities to maximize your assets, like downsizing or optimizing investments.

Boosting Net Worth

To grow your net worth, focus on boosting assets and reducing debts. Contribute as much as possible to retirement plans at work. Open an IRA if you need additional savings capacity. Pay down high-interest debts first when you have extra cash flow.

Bottom Line

A senior couple enjoying their above average net worth at retirement

Your net worth is a scorecard for financial success, so it’s worth monitoring as you near retirement. Compare your net worth to benchmarks, but understand your individual situation, needs and resources first before concluding you must take action. What is adequate for one retirement saver could be more or less adequate for another. In general, average net worth figures are often regarded as potentially misleading because they include data from high-income groups. Median net worth may be a more useful figure when assessing your readiness for retirement.

Retirement Planning Tips

  • If you’re unsure how your net worth stacks up to what’s needed for retirement, schedule time with a financial advisor. An advisor can objectively assess your net worth, expected retirement income and spending needs. 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.
  • Use SmartAsset’s Retirement Calculator to forecast your net worth when you reach retirement.

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