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How wealthy should you be at your age?

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.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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