The American government defines US net worth as total sum of assets minus debt. The US Census Bureau, Federal Reserve and to some extent, Bureau of Labor Statistics keep tabs on the net worth of Americans by age, race, gender and location.
This helps the government better understand income divide among various ethnicities residing in the US, poverty levels, salary swings and overall performance of the nation’s gigantic economy.
However, net worth is not an indicator of whether or not you are successful. The net worth of any individual depends on various factors.
These include education, inheritance and civil status, among others. I will discuss these later in the article. Therefore, let us understand what the term ‘net worth’ signifies.
What is Net Worth?
Net worth is broadly defined as the total value of your assets minus debt. It is calculated on the basis of various elements.
- Cash kept at home or carried personally but not meant for spending.
- Money deposited in single or more savings account.
- Investments in the stock market.
- Your portfolio of Mutual Funds, Bonds, Foreign Currency and Commodities, among others.
- Value of crypto-currencies held on any specific day.
- Retirement Accounts/ Pension Funds.
- Equity or shares held in a house owned singly or with family members, calculated on the basis of its market value.
- Wealth inherited by any means and in any form such as real estate or cash.
- Assets held in the form of collectable art, valuable stamps, coins, antiques and other artefacts calculated on the basis of existing market price.
- Any asset held by an American citizen outside the country that can be legitimately redeemed for cash.
- Platinum, gold and silver jewellery as well as precious stones including diamonds that have significant market value.
- All tangible assets that can be redeemed for cash legally within the US and American territories.
Your net worth will also be calculated after deducting credit such as home mortgage, credit card and other debt.
Based upon these factors, here are the latest figures for average American net worth.
Average Net Worth by Age of American
There are various parameters utilized by US Census Bureau, the Bureau of Labor Statistics and Federal Reserve.
According to the latest 2014 US Census Bureau report issued in 2015, the average net worth of Americans by age was found to stand at:
1. Average Household Net Worth by age of American
- Less than 35 years: Median Net Worth: US$7,760
- Age 35 to 45 years: Median Net Worth: US$55,390
- Age 45 to 54 years: Median Net Worth: US$98.790
- Age 55 to 64 years: Median Net Worth: US$163,330
- Age 65 to 69 years: Median Net Worth US$193,400
- Age 70 to 74 years: Median Net Worth US$209,200
- Age 75 years and above: Median Net Worth US$194,900.
Shockingly, the American middle-class lags behind in average net worth compared over counterparts in Japan, Australia, Canada and Western Europe. The average net worth of America’s middle class, regardless of age, stood at US$44,900 per adult.
This means America ranks 19th on the list of countries where the middle class has high net worth.
2. Average Net Worth by Age (Single Persons)
- Less than 35 years age: Median Net Worth: US$4,166
- Age 35 to 54 years: Median Net Worth: US$26,820
- Age 55 to 64 years: Median Net Worth US$49,110
- Age 65 years and above Median Net Worth US$118,700
3. America Net Worth by Age (of Married Couple Households of Any Size)
- Less than 35 years: US$28,520
- Age 35 to 54 years: US$145,400
- Age 55 to 64 years: US$307,100
- Age 65 years and above: US$331,200
4. Average Net Worth by age of American Male
- Less than 35 years: US$6,768
- Age 35 to 54 years: US$34,700
- Age 55 to 64 years: US$50,510
- Age 65 years and above: US$116,500
5. Average Net Worth by age of American Female
- Less than 35 years: US$1,533
- Age 35 to 54 years: US$15,080
- Age 55 to 64 years: US$53,900
- Age 65 years and above: US$116,200
6. Average American Net Worth by Education
- No High School Diploma: US$5,200
- High School Graduate: US$36,340
- College but Without Degree: US$40,100
- Associate Degree: US$76,010
- Bachelor Degree: US$149,300
- Graduate/ Professional Degree: US$314,700
7. Average Net Worth by Ethnicity
The 2016 Survey of Consumer Finances released in mid-2017 by Federal Reserve reveals these facts about average net worth in the US by ethnicity.
- Average Net Worth of white Americans: US$171,000
- Average Net Worth of black Americans: US$17,600
- Average Net Worth of Hispanics: US$20,700
- Average Net Worth of Asian & other ethnicities: US$64,800
However, the Census Bureau report of 2014 gives a different picture altogether for average net worth by ethnicity.
- Average Net Worth of Asians: US$156,500
- Average Net Worth of White (non-Hispanic): US$130,800
- Average Net Worth of White (alone): US$102,800
- Average Net Worth of Black (alone): US$9,590
- Average Net Worth of Other Ethnic People: US$25,520
- Average Net Worth of Hispanic (any race): US$17,530
- Average Net Worth of Non-Hispanic: US$99,180
8. Average American Net Worth by Location
The US Census Bureau has also listed average USA net worth by location.
- Northwest USA: US$114,400
- Western USA: US$96,890
- Midwest USA: US$80,750
- Southern USA: US$67,940
Also Read: Top 10 Countries with the Highest and Lowest Minimum Wages
Calculating Average Net Worth
The three US government agencies estimate average income by age of American on the basis of quintiles. The lowest quintile is red, which means zero net worth.
According to the 2017 report released recently by the US Census Bureau, about 12.7% of the American population lives below the poverty line.
A single person with an average American salary of US$12,140 per year is considered as below the poverty line.
According to quintiles released by the Census Bureau, there are no persons with negative or zero net assets. This means, persons of all age, regardless of income, age, ethnicity and location have some net worth.
To Sum Up
American household incomes have increased in 2017 according to a report by the US Census Bureau. Hence, you will see a corresponding increase in average net worth by age of American. Last year, the median income of Americans increased by 1.8% at US$61,400.
While the median household income for white, non-Hispanic households increased by 2.6% to $68,145 in 2017 and by 3.7% to $50,486 for Hispanic families, it fell 0.2% to $40,258 for African-American households.
However, Asian Americans continue to remain as highest earners, at 90 percentile, states a 2018 report released by Pew Research Center.