Summary Findings – Net Worth Comparison USA

[ut2sua]

This seems a considerable underestimate of household net worth.

The Fed released 2016 data which showed the 90th percentile at almost 1 million (952000), but as I recall from past breakdown of the top 10%, median networth in the top 10% goes up steeply from that point.
Sorry, I can't find the top 10% breakdown tables anymore.


https://www.census.gov/library/publications/2019/demo/p70br-166.html


However, I think this source is using those original tables (a guess) and here goes, for 2016/17:


Net Worth Percentile2016 Dollar Cutoff
90.0%$1,182,390
95.0%$2,377,985.22
99.0%$10,374,030.10
99.5%$16,115,373.00
99.9%$43,090,281.00



https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/

This data passed the smell test for me. Unfortunately (or not), top 2% is now down graded to top 5% and top 5% -> top 10%.

 

[aaronc879]

I guess i'm not in the top 50%. I would have thought I was. Seems most people around here spend everything they make. They must have a good net worth due to home appreciation because they aren't saving much or at least it doesn't appear they are. Must be all the big city big earners that skew the numbers up.

 

[ut2sua]

Net Worth Percentile2016 Dollar Cutoff
90.0%$1,182,390
95.0%$2,377,985.22
99.0%$10,374,030.10
99.5%$16,115,373.00
99.9%$43,090,281.00



https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/

I guess there is a good message here (base on the above numbers), that if one max out his/her 401K and invests wisely for 20->30 years, one can get to the top 10% (~1mil in 2016 $). A double income family can get to top 5% that same way (~2 mil). Any after tax $ including home appreciation is on top of that. Folks with pension(s) will do as well with much less current NW (their NW will need a different calculation). The price to pay to get to the top ~10% (for most folks minus those with large inheritance) is time.

 

[ut2sua]

I guess i'm not in the top 50%. I would have thought I was. Seems most people around here spend everything they make. They must have a good net worth due to home appreciation because they aren't saving much or at least it doesn't appear they are. Must be all the big city big earners that skew the numbers up.

We started out at the bottom 10% (doesn't seem that long ago). Try to save some $, buy a low-cost fund (VTI), add some small $ to the fund every pay-check; Forget about it, and in 5->10 years, you will be pleasantly surprised. Cheers.

 

[Closet_Gamer]

Those net worth numbers are not taking into consideration the age of those persons. Break it down by age and look again before you think you feel good about your own personal numbers;
https://www.bankrate.com/personal-finance/average-net-worth-by-age/

Exactly what I was thinking. I have a 24 year old niece who is way down below the 50% threshold but is an absolute beast at saving. She's golden.

 

[TimeMeasure]

Net Worth USA Percentiles – Top 1%, 5%, 10%, and 50% in Net Worth

This is a really interesting ranking. It also brings to mind another thought...

Burma, instead of (or maybe in addition to) measuring Gross Domestic Product, measures Gross National Happiness.

It would be fascinating to see one of these percentile rankings which, instead of comparing net worth or income, compared some of the other determinants of actual wellbeing.

For example... health (maybe some aggregated score based on severity of health conditions, chronic conditions, etc.)... family & community (maybe an aggregated score based on number of connections, quality of connections, etc.)...

Of course, it would be very hard to reach any universal consensus on how to compose an aggregate score in these areas... and then, even if there were consensus, it would be just as hard to actually measure the population. So, what is easy to measure (income, debt, net worth, etc.) gets measured...

... although it’s not always the most relevant to our actual lives. We’ve probably all read of that study which shows that, although happiness does increase with income, it only does so up to a point (believe it was in the $70k - $100k range), and after that, the effect levels off or diminishes. Other factors presumably predominate beyond a certain point in income (or net worth).

 

[HawkOwl]

This is a really interesting ranking. It also brings to mind another thought...

Burma, instead of (or maybe in addition to) measuring Gross Domestic Product, measures Gross National Happiness.

It would be fascinating to see one of these percentile rankings which, instead of comparing net worth or income, compared some of the other determinants of actual wellbeing.

For example... health (maybe some aggregated score based on severity of health conditions, chronic conditions, etc.)... family & community (maybe an aggregated score based on number of connections, quality of connections, etc.)...

Of course, it would be very hard to reach any universal consensus on how to compose an aggregate score in these areas... and then, even if there were consensus, it would be just as hard to actually measure the population. So, what is easy to measure (income, debt, net worth, etc.) gets measured...

... although it’s not always the most relevant to our actual lives. We’ve probably all read of that study which shows that, although happiness does increase with income, it only does so up to a point (believe it was in the $70k - $100k range), and after that, the effect levels off or diminishes. Other factors presumably predominate beyond a certain point in income (or net worth).

Burma is one of the most repressive regimes in the world, with horrible human rights records, huge wealth disparities between the military supporters versus everyone else, and highly questionable vote tabulations. Using their own submitted calculations of “happiness” rather than more objective wealth numbers is Orwellian. I am sure that North Korea can offer up great “gross national happiness” numbers too.

 

[Gumby]

It is actually Bhutan.

https://ophi.org.uk/policy/national-policy/gross-national-happiness-index/

 

[aaronc879]

Exactly what I was thinking. I have a 24 year old niece who is way down below the 50% threshold but is an absolute beast at saving. She's golden.

Income has a lot to do with it. I am a really good saver but my average income after 20+ years of full time work is under $30K/yr and dropping. I have saved over $250K despite that low income but to get to the higher % threshold a higher income is critical.

 

[tmm99]

How meaningful is it to bundle up the whole population without consideration of age of the people? Obvioulsy, younger folks haven't accumulated much money. I've seen age-dependent networth breakdowns in the past, and they give you a much different picture IMO.

 

[Fermion]

It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.

 

[retire202052]

The net worth doesn't include the income side with pensions and Social Security, so perhaps it is a reasonable number at 2.4m.

And these articles about "pension millionaires" throws another angle:

https://www.illinoispolicy.org/the-1-illinois-pension-millionaires/

https://www.illinoispolicy.org/pres...-pension-recipients-will-become-millionaires/

 

[MichaelB]

It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.

According to the US FRB, the top 1% owns $32.5T in assets, and the next 9% owns another $39.2T

Not a surprise, the top 1% close to 1/3 of their total wealth is private business and another 1/3 in public equities.

 

[jazz4cash]

And these articles about "pension millionaires" throws another angle:



https://www.illinoispolicy.org/the-1-illinois-pension-millionaires/



https://www.illinoispolicy.org/pres...-pension-recipients-will-become-millionaires/

There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps. A million dollars is 40k/ yr @4% WR or 33k / yr for 30 yrs if you stuffed it under a mattress. These are very early retirees in many cases so the million dollar pile gets spread even thinner.

 

[aaronc879]

There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps. A million dollars is 40k/ yr @4% WR or 33k / yr for 30 yrs if you stuffed it under a mattress. These are very early retirees in many cases so the million dollar pile gets spread even thinner.

I think the term "pension millionaire" is pretty spot on. My Aunt retired at age 58 with almost no savings but a 80% Cola'd pension and healthcare. I never asked but I would guess her pension is somewhere around $75K now plus she gets maybe another $30K from SS. That lets her live a very comfortable life despite never saving any money before retirement. She has saved some now because she doesn't know what to do with so much income at her age. $75K/yr for 30 years is over $2M. That is a lot of money. More than most people can save in a career(this site does not represent most people). I think pension millionaire is a pretty accurate term

 

[calmloki]

Having zero pension and close to zero social security I'm real aware of what I see as the "pension millionaire" life. It takes a fair chunk to feel secure about retirement maintenance income.

still - "as I move from here to ghost, what's gonna matter most?"

 

[ElizabethT]

LOL, who are they trying to patronize? I hardly consider us Wealthy! No private jets for us. Can we afford a Bentley or a McLaren Car, yes, but that does not make us wealthy.

I wonder if this mindset, which DH and I share 100%, is a critical reason as to why we are in the financial bracket considered wealthy, and in the 1.5% or so overall? We have learned that life is much, much, much less stressful when we underspend a bit and allow ample room for the unexpected, 'just in case.'

This week is a good example- an unexpected $700 auto repair and an unexpected pest remediation at $500. No stress about paying them, however, and that goes a long way in generating our piece of mind. It doesn't lead me to think of us as 'wealthy' though.

 

[Time2]

I'm always amazed by the numbers that will put you in the top 5%, but having a top 5% networth will only generate an income that is near the median US income.
Most people would say you are rich, but you can only live a middleclass lifestyle.
But you don't have to work to survive.

 

[Rianne]

There is another calculator for net worth percentile but age on the site.

https://www.thekickassentrepreneur.com/net-worth-by-age-percentile-calculator-for-usa/

From article:


If you want to increase your net worth, there are some levers you can pull. You can:

• increase your salary, or, if you’re running a business, increase your profits
• save more of your salary, or business’s profits, on a monthly basis
• improve your earning rate. If your investments are earning a 4% yearly return, for example, then you can increase your return by becoming a better investor.

Our pension + SS is @ $15K more than we spend/year. That kicks in 2-3 years depending when we decide to take SS. Thus leaves the NW fairly secure, unless market takes a deep dive. Either way, we're OK but never consider ourselves "rich", not even sure about "well off". We're just average IMO.

 

[tmm99]

For fun, here's a networth/percentile calculator by age. (The article also contains the average and Median Net Worth by Age Range, 2016. According to that, the *average* networth for people over 60 is more than a million (although the median number is much, much lower.)) And out of those people over 60, if you're a pension millionaire, you won't show up as a millionaire, so I have a feeling there are a whole lot more people who have over a million bucks in the older age bracket that the said 5%.

https://dqydj.com/net-worth-by-age-calculator-united-states/

 

[ut2sua]

It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.

There is generational-wealth getting pass-downed/distributed too. Many reached the top 1% the moment they are born.

 

[stepford]

There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps.

Whenever I see a "pensions are bankrupting us" article that singles out teachers and conveniently leaves out public safety employees I suspect a political agenda. Both groups typically have generous pension benefits (and both deserve what they earned), but they each usually represent opposite sides of the political spectrum. I guess it's harder to rabble rouse when one of your targets is revered by your audience.

 

[Sojourner]

It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.

Doesn't it seem like that $11 million figure is being inflated by the inclusion of households of Bill Gates, Warren Buffet, Jeff Bezos, and other multi-billionaires? IOW, the NW of the poorest household in the top 1% isn't really $11MM... is it?

Based on my own observations and interactions with people—in real life and on this board—that $11 million figure just seems wrong to me. Here at E-R.org, where we are pretty much all in the top echelon of savers and NW accumulators, I can think of only a very few members who've posted about having a NW in excess of $10MM. At most, I have to think it's only maybe 3-4% of us. If that's true, then how could 1% of ALL households have such a large NW?

 

[Sunset]

I wonder if this mindset, which DH and I share 100%, is a critical reason as to why we are in the financial bracket considered wealthy, .... We have learned that life is much, much, much less stressful when we underspend a bit and allow ample room for the unexpected, 'just in case.'

.....

+1
When younger I always stressed if I had less than $1,000 in the bank to me the $1,000 was like having zero. Friends thought I was silly for not spending it.

I find life less stressful, since I saved a bunch.

My example is , need a new roof, cost is $9K , my only concern is the quality and when can they start.

 

[Gumby]

I can't tell you the number of times friends or relatives would say to me "why don't you buy X (a new Mercedes for example)? You can afford it." And I would always answer "the only reason I can afford things like X is because I haven't bought them." For me, happiness is the security that comes from having money in the bank, not having a bunch of stuff.