Misleading USA Today Report on Average Net Worth at age 50

[ModestNestEgg]

I did find this in the details of the article.



It is a good example of how the we can be mislead by somebody telling the truth, but not the whole truth. It’s a shame when important details are buried behind sensational headlines, since it shows the mistake was not one of ignorance.

Correct. It is in the article and the writer may have intended to emphasize that point. However, since it was well into the article, the danger is people who didn't read the whole piece and rely solely on what is in the headline. And it's unlikely that the writer was the one creating the headline, which I'm sure was created to promote engagement (AKA clickbait) more than promoting the reader being well informed.

 

[Montecfo]

I come across similar quotes quite often and try to explain that this is a characteristic of the median, not the mean and I get downvoted into oblivion.

Any guess on where those down voters sit, relative to median?

 

[G-Money]

I'd classify this type of reporting as misleading and best and fear generating at worst.

The headline is : The average 50-something American is now worth $1.4 million

The average is the misleading part, as many, many folks do not understand the difference between average and median.

The average 50-something American is now worth $1.4 million

The older you are, the higher your net worth: That's what the data tells us. Financial experts cite three big reasons. One of them is time.

www.usatoday.com

The report referenced is here:

The average net worth by age in America

Have you ever wondered how you stack up against other people financially? Here's the average net worth by age.

www.empower.com

Which reports both the average and median by various ages. The net worth reported at age 50 is:

Age by decade	Average net worth	Median net worth
50s	$1,369,809	$192,964

All the billionaries, the uneven distribution of wealth, makes average a meaningless number.

For someone saving for retirement, trying to save money, and who does not have a million by the time they are 50, this type of reporting can cause them to just give up.

Then there is the conflating of 'net worth' with investable assets. Given the rise of house values, that median net worth does litttle to inform on retirement savings and planning.

But the headline sure is shocking to fly by readers.

I think fear mongering would be reporting on the reality of arriving at the end of peak retirement saving years with $200k net worth, and what kind of retirement that might actually afford.

From my perspective, that would be pretty bleak. It probably doesn't involve home ownership or a lot of security beyond basic expenses, and not for an early retirement either. This is all assuming there isn't a pension or inheritance coming.

Am I wrong?

 

[scrabbler1]

We even had a manager joke to a room full of engineers that anyone below average could voluntarily resign to help the company. No one laughed.

This reminds me of a big meeting at my old company. The bigwig running it was telling us about the (proposed?) A-B-C rating system for employees. A few were A's, most were B's, and a few were C's, the marginal ones the company wouldn't mind if they quit. So the C's would be given lousy raises, if any at all, hoping they would quit. So far, so good?

But there was a quota system along with this rating system where a certain percentage of employees always had to be rated C. I asked this: "What happens when all those C's quit? That means some of the B's will have to be downgraded to a C just to fulfill the quota. If you got rid of all the C's, why create new ones from your existing B's even though they were performing well enough?" He didn't have a good answer to that. "Then those new C's will just have to work harder to not get rated a C." Seems pretty unfair to me.

I'm so glad I left all of that behind 17 years ago.

 

[RetiredHappy]

This reminds me of a big meeting at my old company. The bigwig running it was telling us about the (proposed?) A-B-C rating system for employees. A few were A's, most were B's, and a few were C's, the marginal ones the company wouldn't mind if they quit. So the C's would be given lousy raises, if any at all, hoping they would quit. So far, so good?

But there was a quota system along with this rating system where a certain percentage of employees always had to be rated C. I asked this: "What happens when all those C's quit? That means some of the B's will have to be downgraded to a C just to fulfill the quota. If you got rid of all the C's, why create new ones from your existing B's even though they were performing well enough?" He didn't have a good answer to that. "Then those new C's will just have to work harder to not get rated a C." Seems pretty unfair to me.

I'm so glad I left all of that behind 17 years ago.

Pretty much like the megacorp that we used to work for. That was the worst part about being a manager, focal review and ranking and rating were what we called. I am glad that I am no longer a part of that circus.

 

[Lewis Clark]

This reminds me of a big meeting at my old company. The bigwig running it was telling us about the (proposed?) A-B-C rating system for employees. A few were A's, most were B's, and a few were C's, the marginal ones the company wouldn't mind if they quit. So the C's would be given lousy raises, if any at all, hoping they would quit. So far, so good?

But there was a quota system along with this rating system where a certain percentage of employees always had to be rated C. I asked this: "What happens when all those C's quit? That means some of the B's will have to be downgraded to a C just to fulfill the quota. If you got rid of all the C's, why create new ones from your existing B's even though they were performing well enough?" He didn't have a good answer to that. "Then those new C's will just have to work harder to not get rated a C." Seems pretty unfair to me.

I'm so glad I left all of that behind 17 years ago.

Sounds like a version of a policy made infamous by "Neutron Jack" Welch at General Electric.