So, how wealthy should you be at your age?
It's an often-fraught question that might conjure jealousy, greed, pride or despondency. But it's also an important question for the modern age. We don't know how long the government will be able to fund our generous aged pension scheme into the future, and I think investing is an essential part of retirement planning for anyone under at least 50 today.
It's also a question that a report by the Australian Financial Review (AFR) has sought to answer. In its report, the AFR partnered with financial advisory firm Harness Wealth to determine both the average and top wealth brackets for American households grouped by age.
Although it is based on data from our friends across the Pacific, I think the data it shows is very adaptable to Australians.
Below, I have listed the median net worth of American households from the 50th percentile (the average), 80th percentile (top 20%) and the 90th percentile (top 10%), grouped by age. All dollar amounts have been converted to Aussie dollars, and remember this is a classic 'net worth' test, meaning total assets like the family home, cars, shares and retirement savings are subtracted with liabilities (mortgages, loans etc). Let's see how you compare.
18 to 25 years old: $5,850
The median net worth of people in the 80th percentile is $33,570
The median net worth of people in the 90th percentile is $95,800.
26 to 30 years old: $17,550
The median net worth of people in the 80th percentile is $121,740
The median net worth of people in the 90th percentile is $140,000
31 to 35 years old: $44,500
The median net worth of people in the 80th percentile is $213,900
The median net worth of people in the 90th percentile is $380,000
36 to 40 years old: $69,750
The median net worth of people in the 80th percentile is $322,260
The median net worth of people in the 90th percentile is $678,700
41 to 45 years old: $125,100
The median net worth of people in the 80th percentile is $560,000
The median net worth of people in the 90th percentile is $1.06 million
46 to 50 years old: $192,400
The median net worth of people in the 80th percentile is $805,900
The median net worth of people in the 90th percentile is $1.72 million
51 to 55 years old: $197,300
The median net worth of people in the 80th percentile is $865,300
The median net worth of people in the 90th percentile is $1.79 million
55 to 60 years old: $275,300
The median net worth of people in the 80th percentile is $1.47 million
The median net worth of people in the 90th percentile is $3.6 million
61 to 65 years old: $306,650
The median net worth of people in the 80th percentile is $1.5 million
The median net worth of people in the 90th percentile is $2.86 million
65 to 70 years old: $319,500
The median net worth of people in the 80th percentile is $$1.26 million
The median net worth of people in the 90th percentile is $2.5 million
71 to 75 years old: $374,200
The median net worth of people in the 80th percentile is $1.46 million
The median net worth of people in the 90th percentile is $3.1 million
76 years old + : $380,000
The median net worth of people in the 80th percentile is $1.48 million
The median net worth of people in the 90th percentile is $3.04 million
Foolish takeaway
With this list, you can clearly see the effects of compound interest on your total wealth throughout a typical lifetime. Although a typical person's salary will rise throughout their working lives, most of your wealth in your older years will come from the value of your assets (like your home and shares) compounding over time.
