Net Worth Calculator

What Is Net Worth and Why Does It Matter?

Your net worth is the single most important number in personal finance. It is calculated by subtracting your total liabilities (everything you owe) from your total assets (everything you own). A positive net worth means you own more than you owe, while a negative net worth indicates your debts exceed your assets. Unlike income, which measures cash flow, net worth measures your accumulated wealth at a specific point in time.

How to Calculate Net Worth

The formula is straightforward: Net Worth = Total Assets − Total Liabilities. Assets include cash in bank accounts, investment portfolios (stocks, bonds, retirement accounts), real estate equity, vehicle values, and personal property like jewelry or collectibles. Liabilities include mortgage balances, student loans, auto loans, credit card debt, and any other outstanding obligations. For the most accurate picture, use current market values for assets and current outstanding balances for debts.

Average Net Worth by Age in the United States

According to the Federal Reserve's Survey of Consumer Finances, here is how median and average net worth compare across age groups:

• Under 35: Median net worth of approximately $39,000; average of $183,500. Many younger adults carry student loan debt and have not yet had time to accumulate significant assets.
• 35–44: Median of roughly $135,600; average of $549,600. This is the stage where home equity and retirement savings begin to grow meaningfully.
• 45–54: Median of about $247,200; average of $975,800. Peak earning years typically drive the largest jumps in wealth accumulation.
• 55–64: Median of approximately $364,500; average of $1,566,900. Pre-retirement households benefit from decades of compounding and home equity growth.
• 65–74: Median of roughly $409,900; average of $1,794,600. Net worth often peaks in this bracket before drawdown begins.
• 75+: Median of about $335,600; average of $1,624,100. Gradual spending of retirement savings and healthcare costs typically reduce net worth over time.

How to Increase Your Net Worth

Building net worth comes down to two levers: growing assets and reducing liabilities. On the asset side, maximizing contributions to tax-advantaged retirement accounts (401k, IRA), investing consistently in diversified portfolios, and building home equity are the most reliable strategies. On the liability side, aggressively paying down high-interest debt (especially credit cards), avoiding new debt for depreciating assets, and refinancing existing loans at lower rates can accelerate your progress.

Common Net Worth Mistakes to Avoid

• Overvaluing your home: Many people estimate their home at the price they hope to sell it for rather than what the market would actually pay today. Use recent comparable sales or an online estimator for a realistic figure.
• Ignoring depreciation: Cars, boats, and electronics lose value over time. Use current resale value, not what you paid.
• Forgetting liabilities: Taxes owed, pending medical bills, and personal loans from family members are all liabilities that should be included.
• Checking too often or not enough: Tracking net worth monthly or quarterly strikes the right balance. Daily tracking leads to anxiety over market fluctuations, while annual tracking misses opportunities to course-correct.

Net Worth vs. Income: Why Both Matter

High income does not guarantee high net worth. Someone earning $200,000 per year with $300,000 in debt and no savings has a lower net worth than someone earning $60,000 per year with a paid-off home and retirement savings. Net worth is the scoreboard; income is the tool you use to improve the score. The goal is to convert as much of your income as possible into long-term assets while minimizing liabilities.