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NET WORTH FOR ONE'S AGE
Old 01-25-2005, 06:46 AM   #1
 
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NET WORTH FOR ONE'S AGE


What is a reasonable net worth for one's age?

For example I know of someone who is single at 40 with a mill, a career couple worth $400,000 at ages 31, or an executive couple 49 and 42 worth $1.9 mill. Are each of these people typical, above average, or below?

What are people on this threat worth and at what age? Net worth is the question, not income, or investment scenarios.

This would be interesting to set the stage for those who need to reach some goals or relax and chill about approaching ER.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 07:01 AM   #2
 
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Re: NET WORTH FOR ONE'S AGE

Net worth is my main indicator of how we are doing.
The "hope" right now is to keep it where it is
indefinitely. Anyway, I have been married for 37 of the last 40 years, so my numbers are for 2 people. I peaked
in 1998 (year of my divorce - nice for my ex.) at about
500K. It was roughly a 50/50 split of assets, so I started full
retirement with about 250K at age 54. I know this sounds incredible, but it was not even all that hard to do. My net worth went up every year until 2004.

JG
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 07:46 AM   #3
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Re: NET WORTH FOR ONE'S AGE

I just turned 37 yesterday; DH will be 44 in May.

As of December 31, 2004, net worth was about $400,000.

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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 07:47 AM   #4
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Re: NET WORTH FOR ONE'S AGE

According to the Fed, in 2001 the median family net worth was $86100. According to age, the median net worth was

<=35 $11600
35-44 $77600
45-54 $132000
55-64 $181500
65-74 $176300
>=75 $151400

In 2005, I suppose that these values could be increased by 30 to 40%, but the examples you cited are well above median.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 08:40 AM   #5
 
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Re: NET WORTH FOR ONE'S AGE

Quote:
According to the Fed, in 2001 the median family net worth was $86100. *According to age, the median net worth was

<=35 * $11600
35-44 *$77600
45-54 *$132000
55-64 *$181500
65-74 *$176300
>=75 * $151400

In 2005, I suppose that these values could be increased by 30 to 40%, but the examples you cited are well above median.
I find the Fed numbers WAY off (too low). Given those numbers, NOBODY would be ERing.

Getting back to the original question...What are people's net worth on this threat and what age?
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 08:47 AM   #6
 
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Re: NET WORTH FOR ONE'S AGE

Quote:

I find the Fed numbers WAY off (too low). Given those numbers, NOBODY would be ERing. *
Actually these numbers may be too high! - They might include home equity.

This is one reason why I also believe that Social Security is not a 'Crisis' - And I agree with you NOBODY (Or a very small minority - Us ) Will be retiring. The masses will continue to work and pump money into the SS system.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 08:48 AM   #7
 
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Re: NET WORTH FOR ONE'S AGE

Those net worth numbers look HIGH to me based
on similar studies I have seen. Remember, those are
the median. Anyway, I don't find them the least
surprising.

JG
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 08:50 AM   #8
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Re: NET WORTH FOR ONE'S AGE

The book the Millionaire Next Door has 3 catagories for net worth.
It is based on age and annual income.

A 50 year old earning $75,000 per year may be a


UAW Under Accumulator of Wealth Net Worth < 187500

AAW Average Accumulator of Wealth 187500 < Net Worth < 750000

PAW Prodigious Accumulator of Wealth Net Worth > 750000
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 09:12 AM   #9
 
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Re: NET WORTH FOR ONE'S AGE

Quote:

For example I know of someone who is single at 40 with a mill, a career couple worth $400,000 at ages 31, *or an executive couple 49 and 42 worth $1.9 mill. *Are each of these people typical, above average, or below? *
Let's do further analysis of your examples and assume that each person starting 'working' at 23 years of age.

1. single at 40 with a million: has essentially 'saved' or accumulated $58,823/yr (1 million divided by 17 years of work)
2. career couple worth $400,000 at 31: has 'saved' and accumulated $50,000 together ($400,000/8 working years) or to compare apples and apples...$25,000 each;
3. executive couple 49 and 42 worth $1.9 mill: has 'saved' and accumlated $73,076/yr together and approximately $36,000/year each (the individual calculation is more difficult to calculate given the differences in age).

Hence to sum up your 'friends', your single 40 year old is accumulating the most on an individual basis($58,823/yr), while the executive 49/42 couple accumulating the most together at $73,076/yr.

All in all, I think they are doing very well indeed!
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 10:56 AM   #10
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Re: NET WORTH FOR ONE'S AGE

I am 32 and hubby turned 35 last month. Our net worth is $800,000.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 11:29 AM   #11
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Re: NET WORTH FOR ONE'S AGE

Quote:

Getting back to the original question...What are people's net worth on this threat and what age?
None of your business.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 11:50 AM   #12
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Re: NET WORTH FOR ONE'S AGE

Quote:
What are people on this threat worth and at what age? Net worth is the question, not income, or investment scenarios.
Income is definitely a big factor. *If the "basic" cost of living is $x in a place and a person makes exactly $x they have nothing left over to save or invest. *If that person instead makes $5x and even if they live better than "basic", perhaps at $2x, then they have $3x per year to save/invest. *They can probably retire early if they want. *The person making $x / year will not be able to ER even if *they are able to cut below basic living costs. *If you want to ER you will need to make a lot of money and live like you are not - how quick to ER depends a lot on the ratio of income to expenses.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 12:04 PM   #13
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Re: NET WORTH FOR ONE'S AGE

The numbers I posted do not include non-financial assets, such as vehicles, equity in primary residence, non-residential property, etc., only assets such as CDs, mutual funds, stocks, bonds, life insurance and cash accounts. I couldn't tell if they had taken consumer debt into account.

The data comes from the triennial Survey of Consumer Finances that is sponsored by the Fed and conducted by the University of Chicago. How realistic the numbers seem to you depends on how much you trust surveys (remember the exit polls on Nov 2?)

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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 12:26 PM   #14
 
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Re: NET WORTH FOR ONE'S AGE

Quote:
The numbers I posted do not include non-financial assets, such as vehicles, equity in primary residence, non-residential property, etc., only assets such as CDs, mutual funds, stocks, bonds, life insurance and cash accounts. *I couldn't tell if they had taken consumer debt into account.

The data comes from the triennial Survey of Consumer Finances that is sponsored by the Fed and conducted by the University of Chicago. *How realistic the numbers seem to you depends on how much you trust surveys (remember the exit polls on Nov 2?)
Knew those numbers were LOW! Net Worth is Net Worth. Principal Residence, Cash, Investments, Stocks, etc, etc.....
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 12:31 PM   #15
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Re: NET WORTH FOR ONE'S AGE

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I am 32 and hubby turned 35 last month. *Our net worth is $800,000.
Congratulations C-Girl!. I think your accomplishment is astounding. At 32 many people still don't know what they want to be when (if?) they grow up.

Mikey
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 12:38 PM   #16
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Re: NET WORTH FOR ONE'S AGE

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What is a reasonable net worth for one's age?
This question is interesting in an idle water-cooler converstaion way. But you don't live on net worth- you live on income and the security of that income. As someone pointed out on another thread, plenty of people with $2m net worth have to live more carefully than a couple with two generous and secure pensions and subsidized healthcare.

That couple could have a very low net worth,and still live great and sleep well.

There is nothing like a government pension with a shot of COLA!

In fact, I sure wish I had figured that out earlier in life.

Mikey

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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 12:50 PM   #17
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Re: NET WORTH FOR ONE'S AGE

Don't government pensions come from the same place as SS - the taxpayer.

Exceptions - ??teachers and certain 'funded' pensions locally??

Curious whether some are considered - er ah - more better than others.
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Re: NET WORTH FOR ONE'S AGE
Old 01-25-2005, 04:13 PM   #18
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Re: NET WORTH FOR ONE'S AGE

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Congratulations C-Girl!. I think *your accomplishment is astounding. At 32 many people still don't know what they want to be when (if?) they grow up.

Mikey
Thanks Mikey!

Yeah, I've always been the level-headed kid in the family Hubby and I definitely live within our means.
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Re: NET WORTH FOR ONE'S AGE
Old 01-26-2005, 03:12 PM   #19
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Re: NET WORTH FOR ONE'S AGE

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Don't government pensions come from the same place as SS - the taxpayer.

Exceptions - ??teachers and certain 'funded' pensions locally??

Curious whether some are considered - er ah - more better than others.
Most come from somewhere "else", i.e. NOT the federal government. and they are funded by a combination of employee and employer contributions.

And YES, they very greatly, I've been investigating that very subject as it is very dear to my heart, and have already found differences of 500 percent in the benefits between different government entities in different parts of the country (for a given salary level).

Some are very much more better than others.
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Re: NET WORTH FOR ONE'S AGE
Old 01-26-2005, 04:02 PM   #20
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Re: NET WORTH FOR ONE'S AGE

ER at age 44, 45 in 2003.

$1.3million assets.

$300K house
$1M liquid.
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