The Average Net Worth For The Above Average Married Couple

A cute couple of dogs.One of the most popular posts on Financial Samurai with over 250 comments is The Average Net Worth For The Above Average Person. The “above average person” is loosely defined as someone who graduated from college (35% of the American population), works hard, plays well with others, takes full advantage of their pre-tax retirement plans, saves additional disposable income, stays on top of their finances, expects nothing from their parents or the government and is not delusional. If you were a “C student” and expect to live an “A lifestyle,” you are definitely not the above average person!

Take a moment to study the above average person’s net worth chart again. Somewhere between the ages of 45-50, the above average person’s net worth reaches over one million dollars. We can all agree that thanks to inflation, easy monetary policy, a roaring bull market and a recovery in real estate, becoming a millionaire by the time we retire is fast becoming the rule, rather than the exception.


THE AVG NET WORTH OF THE ABOVE AVERAGE PERSON
Age Yrs Worked Avg Pre-Tax Savings Avg Post-Tax Savings Avg Property Equity Total Net Worth
22 0 $ - $ - $ - $ -
23 1 $ 12,500 $ 7,500 $ - $ 20,000
24 2 $ 35,000 $ 15,000 $ - $ 50,000
25 3 $ 56,000 $ 25,000 $ - $ 81,000
30 8 $ 154,500 $ 67,500 $ 17,500 $ 239,500
35 13 $ 273,000 $ 115,000 $ 30,000 $ 418,000
40 18 $ 410,500 $ 162,500 $ 70,000 $ 643,000
45 23 $ 573,500 $ 200,000 $ 117,500 $ 891,000
50 28 $ 771,500 $ 237,500 $ 162,500 $ 1,171,500
55 33 $ 1,011,500 $ 275,000 $ 225,000 $ 1,511,500
60 38 $ 1,306,000 $ 312,500 $ 290,000 $ 1,908,500
65 43 $ 1,670,500 $ 375,000 $ 375,000 $ 2,420,500
Source: FinancialSamurai.com

It’s important to note the figures in my chart are for individuals and not for couples. For those of you who combined your household net worth to see where you stand, so sorry. That’s cheating. At the same time, not everybody can find someone they love hence why I initially created a per person chart. It would be presumptuous to assume we can all live in marital bliss. Not everybody is even allowed to get married thanks to the government telling us who we can and cannot be with. For simplicity’s sake, I will refer to “married couples” as anybody who is in a long term relationship.

This article will come up with reasonable “above average couple net worth” charts based on what I think, what the government thinks, what you think, and the realities of life. One can also define “above average” as one standard deviation beyond the midpoint of the normal distribution curve (top 16%). Not every couple can be above average. But every couple can certainly try.

THE AVERAGE NET WORTH OF THE ABOVE AVERAGE COUPLE

Everybody knows that married couples who stay together have a financial advantage over single people. Couples can split a $2,500 a month two bedroom apartment two ways instead of paying a full $2,000 a month for a one bedroom as an individual. It’s much more efficient and cheaper to cook for two.  Meanwhile, there are probably plenty of buy one get one free specials too. The economies of scale are everywhere for couples.

Before we go about the exercise of figuring out the net worth of the above average couple, let’s take a moment to define an above average couple.

* Stays together for the long term.

* Discusses long term financial goals e.g. retirement age.

* Does not keep financial secrets.

* Knows their monthly budget like the back of their hand.

* Makes sure  their net worth risk exposure is aligned with their goals.

* Shares expenses in a fair way.

* Supports each other’s careers and endeavors.

* Works together as a team to get things done.

* Seeks to understand the other side of a story during conflicts and come to a middle ground.

* Plans for the financial expense of children even if they don’t or can’t have any.

* Each spouse can financially support themselves if the relationship ends.

METHODS FOR CALCULATING NET WORTHS OF COUPLES

The Equality Method

The equality method basically states that a man and a woman are equal. Given both sexes are equal, it is only logical to conclude that both spouses study hard in school, work, save, and invest for the future before and after meeting each other. One simply has to double the amounts in my above average person net worth chart to get to the Equality Net Worth chart.


AVERAGE NET WORTH OF THE ABOVE COUPLE – EQUALITY
Age Yrs Worked Avg Pre-Tax Savings Avg Post-Tax Savings Avg Property Equity Total Net Worth
22 0 $ - $ - $ - $ -
23 1 $ 25,000 $ 15,000 $ - $ 40,000
24 2 $ 70,000 $ 30,000 $ - $ 100,000
25 3 $ 112,000 $ 50,000 $ - $ 162,000
30 8 $ 309,000 $ 135,000 $ 35,000 $ 479,000
35 13 $ 546,000 $ 230,000 $ 60,000 $ 836,000
40 18 $ 821,000 $ 325,000 $ 140,000 $ 1,286,000
45 23 $ 1,147,000 $ 400,000 $ 235,000 $ 1,782,000
50 28 $ 1,543,000 $ 475,000 $ 325,000 $ 2,343,000
55 33 $ 2,023,000 $ 550,000 $ 450,000 $ 3,023,000
60 38 $ 2,612,000 $ 625,000 $ 580,000 $ 3,817,000
65 43 $ 3,341,000 $ 750,000 $ 750,000 $ 4,841,000
Source: FinancialSamurai.com

Some of you argue that men and women are not equal and will therefore disagree with how high the figures are in the Equality Net Worth chart. I’m not sure which century or country you are living in, but males and females are equal here in America at least. If they are not equal in your country please share in the comments section why.

Meanwhile, some of you will argue that the figures are too low because there are tremendous financial synergies in a relationship. Since you can’t have synergies before you actually meet, it’s better to simply double the above average net worth per person figures to stay conservative. Independence is a core part of Americana, except for grown adults who still live with their parents.

Discrimination and sexism is wrong therefore I am a strong proponent of the Equality Net Worth method.

The Government Taxation Method

The government taxation method incorporates their latest desire to raise federal income taxes on individuals making over $400,000 a year and married couples making over $450,000 a year. The government is sexist and believes one spouse should drop his/her $400,000 income and be a stay at home spouse or make no more than $50,000 a year as soon as the couple settles down.

Given the government is predominantly made up of men, one can assume the government is showing sexism towards women. The inference is that women cannot have a lucrative career and be a mother at the same time. Clearly the government has never met Sheryl Sandberg of Facebook or Marissa Mayer of Yahoo. No work from home for you!

A combined income of $450,000 provides only a 12.5% greater threshold than $400,000 for an individual. To get to the Government Taxation Net Worth chart below, we will increase the above average person’s net worth by 12.5% to comply with the government’s view on married people.


AVERAGE NET WORTH OF THE ABOVE AVERAGE COUPLE – GOVERNMENT
Age Yrs Worked Avg Pre-Tax Savings Avg Post-Tax Savings Avg Property Equity Total Net Worth
22 0 $ - $ - $ - $ -
23 1 $ 14,063 $ 8,438 $ - $ 22,500
24 2 $ 39,375 $ 16,875 $ - $ 56,250
25 3 $ 63,000 $ 28,125 $ - $ 91,125
30 8 $ 173,813 $ 75,938 $ 19,688 $ 269,438
35 13 $ 307,125 $ 129,375 $ 33,750 $ 470,250
40 18 $ 461,813 $ 182,813 $ 78,750 $ 723,375
45 23 $ 645,188 $ 225,000 $ 132,188 $ 1,002,375
50 28 $ 867,938 $ 267,188 $ 182,813 $ 1,317,938
55 33 $ 1,137,938 $ 309,375 $ 253,125 $ 1,700,438
60 38 $ 1,469,250 $ 351,563 $ 326,250 $ 2,147,063
65 43 $ 1,879,313 $ 421,875 $ 421,875 $ 2,723,063
Source: FinancialSamurai.com

If you love the government, are very traditional, and believe one spouse should probably stay at home then you are a proponent of the Government Taxation Net Worth method. Put it differently, you believe the wife is worth just 12.5% the value of the husband. By taking 75% off the value of one spouse, we account for a couple kids and a non working spouse before age 40. Again, we are regressing back to the days of Dowton Abbey when women couldn’t even vote to keep their inheritances.

The Financial Samurai Method

By now I’m sure I’ve upset many couples with my various conjectures about the Equality method and the Government Taxation method of figuring out the net worth for above average couples. What you are really upset about is the revelation of your own beliefs. It’s wrong to say one thing and do another e.g. voting to raise taxes on one group without having to pay more yourelf. Not to worry! Have some milk and cookies as I promise not to aggravate your nerves further.

The Financial Samurai Net Worth method provides a recognition there are financial synergies for being a couple. At the same time, the Financial Samurai method denounces government policies to its core for its sexist and discriminatory ways. Besides the ludicrous 12.5% increased allowance for married couples, the government only provides child tax credits, student interest deductions, and IRA contributions to those who make below a certain amount. It’s shameful to discriminate against hard working Americans who live in higher cost of living areas. The government should treat everyone equally and not pick and choose who gets to thrive and who gets to suffer.

I am a strong believer that each spouse should save and invest as an independent man or woman. Breakups happen all the time so it is imperative we count on nobody, not even the present love of our lives for financial survival. At the same time, there is no need to have double the property size presumably because a couple is sharing a room, a kitchen, a bathroom, a living room, a dining room, a garage, and a backyard. Let’s have a look at the chart.


AVERAGE NET WORTH OF THE ABOVE AVERAGE COUPLE – FS
Age Yrs Worked Avg Pre-Tax Savings Avg Post-Tax Savings Avg Property Equity Total Net Worth
22 0 $ - $ - $ - $ -
23 1 $ 25,000 $ 15,000 $ - $ 40,000
24 2 $ 70,000 $ 30,000 $ - $ 100,000
25 3 $ 112,000 $ 50,000 $ - $ 162,000
30 8 $ 309,000 $ 135,000 $ 26,250 $ 470,250
35 13 $ 546,000 $ 230,000 $ 45,000 $ 821,000
40 18 $ 821,000 $ 325,000 $ 105,000 $ 1,251,000
45 23 $ 1,026,250 $ 406,250 $ 176,250 $ 1,608,750
50 28 $ 1,282,813 $ 507,813 $ 243,750 $ 2,034,375
55 33 $ 1,603,516 $ 634,766 $ 337,500 $ 2,575,781
60 38 $ 2,004,395 $ 793,457 $ 435,000 $ 3,232,852
65 43 $ 2,505,493 $ 991,821 $ 562,500 $ 4,059,814
Source: FinancialSamurai.com

Assumptions

* The average pre-tax savings (401k/IRA) and post-tax savings amounts double every year until age 40 and then only increase by 25% every five years after.

* After age 40, the savings rates increase by only 25% a year to account for early retirement of one spouse, if not both spouses.

* The average property equity increases by 50% every five years instead of 100% given you don’t need double the space to live together.

* The cost of kids is accounted for by the decrease in the increase of pre-tax savings, post-tax savings, and property equity increases.

* The above average married couple are millionaires before they reach 40 years old. They develop the optionality for one spouse to retire or find a different career that may not pay as much if so desired.

* By age 50 chances are high both spouses can retire provided they have sufficient passive income streams to cover all expenses.

CONCLUSION

The above average couple is based upon my assumptions of the above average person. Hence, please have a read of the article if you want to get more details about how I came up with my original net worth chart. Divorce is probably the most destructive act for an individual’s finances, but that is a topic for another day.

Not only do couples have roughly a 70% higher combined net worth than single folks, life is also more enjoyable when spent with someone you love. Just make sure to keep track of your finances and have open dialogues throughout the years. I hope everybody has found this exercise useful. Please share with me whether you agree or disagree with my charts and why. If you haven’t found that special someone yet, what are you waiting for?

Recommendation For Building A Couple’s Net Worth

The best thing couples can do to grow their combined net worth is stay on top of their finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where to optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where my spending is going. Their 401K Fee Analyzer tool is saving me over $1,700 a year in fees I had no idea I was paying.

I’ve personally met up with Bill Harris, the CEO of Personal Capital for 2 hours to learn more about his company. They’re doing great things and all the financial tools are free.

Photo: Will it last? SD, 2013.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    Are these numbers still accurate after the housing bubble burst? My net worth would be so much better without having that millstone around my neck!

    And I’ll go nuts if I start talking about tax policy… sigh.

  2. says

    Howdy Sam,
    Love the idea, can’t say that we are even close to being where we should. That being said, do you think that the couple’s chart should have a variable for kids – since they suck money like the little adorable devils that they are? Not that a single person doesn’t have kids, but I guess this seems to presume a DINK lifestyle. For instance, we’d be saving $20K+ a year if we didn’t have to pay for childcare (and that’s cheap!). Just a thought.

    • says

      Good question. To account for potentially one spouse not working and for kids, the Government Taxation method and Financial Samurai method for calculating an above average couple’s net worth only increases the above average single person’s net worth by 15% and ~65% respectively.

      The Equality method is much more black and white (doubling of single person) to create a DINKS couple, but not necessarily as above average couples figure out how to save more in plans such as the 529 for their kids.

  3. says

    I am a little behind your charts, but I feel like I am on the verge of making a big breakthrough (after all I just finished school and started life as a professional). I have to disagree with your comment that we “count on no one” in the context of saving with a spouse. I’m pretty sure if I went into my marriage with that attitude it would make it almost impossible to stay together for the long run. That being said, it is your opinion so you are entitled to it!

    • says

      Nick, it’s hard to use my charts to assess where you are as a recent graduate. However, I would use them as benchmarks/goals as you get older. I’ve done a pretty deep analysis and I really think these figures are realistic for those who maximize their pretax retirement accounts and save even more over time. Things really start adding up!

  4. Erik says

    Hey Sam….unless I read too fast, these charts appear to assume the couple is the same age roughly? Im 42 and my wife is 31, do I go off my age or halfway between our ages to find out where we should be?

    • says

      Good question. You can add up the individual persons net worth in the first chart as one solution. Or you can average out the ages/work experience to get a rough estimate as well. Good observation.

      • Meredith says

        This is what I did… My husband is only 2 years younger than me chronologically, but I graduated HS a year early and then was on the 3 year plan at College, while he was on the 5 year plan. So his working age is app. 4-5years “younger” than mine. When I add up his Average Net Worth and Mine based on our “working ages” and then adjust out for the cost of my MBA, you’re numbers are really on target.

  5. says

    My g/f has zero interest in finance, yet she’s the one in our relationship who looks like she’s been following the FS method her whole life. I had to make one hell of a sales pitch to get her to see that she shouldn’t have the majority of her net worth in a savings account, but hey, noone’s perfect!

  6. says

    I think you will find that your above average person is pretty rare. I am a little surprised about the post tax savings. Are you including a taxable brokerage account?

    BTW, the gender bias you mention in taxes is interesting. It could be a woman who is earning the $400K income and there is a stay at home dad or spouse. Just a thought!

    • says

      Indeed!

      You probably missed or did not understand where I wrote the reason for the gender bias. The government and its 12.5% increase in allocation for couples and the fact that the rules are predominantly made up by men in government.

      Downton Abbey, Larry.

  7. Marcus Lewis says

    Well, we’re behind a little, my spouse was a stay at home Mom for 14 years, has an engineering degree and an MBA and is now a high school math teacher. I am an engineer by trade but now in manufacturing management. We’ve sent 2 kids to private college, they’ve incurred minimal debt <20k each, hopefully big earning years ahead for us, target retirement age 60, healthcare could be an issue.

    • says

      I’m impressed your wife has an engineering degree and an MBA. What was the reason for going through such intense schooling? I’m going to explore this topic of getting an advanced degree and retiring early in a future post and I’d love your insights. Thx

      • Marcus Lewis says

        Sam

        We graduated in ’83 tough economic times (sound familiar) and moved to the gulf coast, where I had a job. She couldn’t find employment, so she returned to school to get her MBA, worked for a couple of years at IBM, then ” retired” to stay at home with kids until she got her teaching credentials through an alternative (no more degrees) program. She’s been teaching for 10 years now. Couples with a stay at home parent are not represented in your tables?

        • says

          Got it. Thanks for the insights. All three tables take into consideration one or two stay at home spouses, depending on level of net worth. If one spouse stays at home sooner and for longer, clearly they may be an adverse impact on the estimated net worth over time.

  8. says

    What are you basing these numbers on? What percentage of couples are considered “above average?”

    For example, what % of couples have a net worth of $162,000 at age 25?

    • says

      Above average is quite subjective as it is based on my assumptions of the above average individual. However, by definition, above average in my book is anything more than 1 standard deviation above the normal distribution curve eg couples who perform better than 84% of other couples. If we talk 2 standard deviations than the definition tightens to better than 97.7% of the couples today.

      • Stamos says

        Shouldn’t your assumptions take in to account that the wealth distribution of the United States is not normally distributed, but is heavily right skewed, ie the ultra wealthy pull the average net worth of the population to the right, where as the median net worth is to the left of this value? A normally distributed distribution of wealth cannot be applied to the population of the United States.

      • TigerDawg says

        Just a data point to support your ‘two standard deviations’ math… the median net worth for the top 5% (so 97th percentile) of households age 40-49 in 2010 was $1.412M, according to the Dallas Federal Reserve’s Survey of Consumer Finance… Not too far off the FS number for age 45… reality is these ‘above average’ numbers are pretty far above average (but still worth striving for).

  9. says

    Sam,
    I’m using your chart to measure our net worth progress, however we are heavily tilted in real estate. Here in Hawaii prices were similar to the Bay Area, it softened but didn’t drop much. The problem is we have rental properties that are many years away from being paid off, which doesn’t create a lot of passive income. The problem is our after tax savings are nowhere near your chart, I’m going to have to talk to the wife about not taking so many expensive vacations. By the way your city is my nemesis as the shopping is too enticing for the wife, the only reason why she stopped was the weight limit on the luggage. You forgot about the shopping tax.

    • says

      Charles,

      Great to year from you. It’s been a while. How are things in Oahu? Heard Japanese tourism is really picking up again. Are home prices in more prime spots inching higher?

      One of the cures to no longer buying expensive LV bags is to ask your wife to study LVMH’s income statement. The gross margins will shock her into never buying one again!

      Sam

      • says

        Tourism is at a record pace. The growth has been from Korea and China. Prime
        areas of real estate are inching up with an expected increase of 3-5%. That’s
        a nice increase for your Kaimuki home.

        The only shock the wife has been through is that its been nearly a year and she
        hasn’t bought or visited a store.

  10. says

    We’re behind by about $150k for the 30 year mark. Although we still have the rest of this year to make up some more ground. Having a 1.5 year layoff put a damper on those plans but we’re making up for lost time now.

  11. says

    I really liked this post. One thing I suggest is that all couples equally be aware of their finances. Relying on one person to do everything doesn’t work very well. If a couple is struggling with a lot of debt and only one person is aware, the other could end up causing a lot of damage spending recklessly and not putting any money towards saving and paying off debt. Knowing how to be in control of one’s financial situation is the first step to freedom.

    • says

      Teamwork is so key. I think it’s great to work together to build a healthy financial future and also work on one’a individual independent health. It’s a win for both, especially if a couple decides to stay together forever.

  12. Neil says

    Pretty well right on for us as a dual-income family. I could see it being harder for people in an area with lower salaries, but then again, they have lower expenses as well.

    • says

      Good stuff. The expense point you point out is important. People who make higher salaries tend to live in higher cost of living areas. Therefore, a blanket federal income tax rate not based on zip code is hard for many. Then again, everybody has a choice to move around the country.

  13. says

    Great job Sam! I think there is synergy when you meet the right person as well. It’s cheaper to live as a couple than 2 single people. The Financial Samurai method is almost as high as the double method. The pre-tax saving numbers are very big in your chart. I don’t think many people can meet that goal. Compare to your FS method chart, we are quite a bit behind in the pre tax category and ahead in the property.

    • says

      Thanks Joe. I hope readers see these charts as motivating to help them achieve their financial goals. The above average definition is those one standard deviation beyond the midpoint of the normal distribution curve.

      If I continue to stay retired, my pretax savings amounts will be much lower than my charts as well. However, my post tax savings amounts will be much higher so it all balances out.

  14. says

    We’re just a little below your table for our age. And by a little, I mean a lot. And by a lot, I mean we have a negative net worth ATM. :)

    I have the pre and post-tax savings of the 23 year old couple, but my wife is 25, and I am 27. Our house dipped under, but I expect a recovery and a decent amount of equity in the next 5 years. The one problem is earning power. We are bringing in enough to pay our bills and put away 6% pre-tax savings, and that’s it at the moment.

    Mostly, I’ll be looking for ways to increase income even more to catch up to these figures. I really like them as a goal, and even if I get halfway there, I’ll feel pretty good at retirement time. My wife is at home, and I am working a few jobs, but she’ll be starting up a side business in the next year, and that’ll help the net worth/debt paydown/investing/saving for our household.

    Thanks for the in-depth analysis on this Sam, always fun and motivating to read.

  15. says

    That’s a pretty nice asset allocation! I think it is important for both partners to try to work a decent enough paying job but also be aware of the fact that money needs to be earned through side hustles to be able to get things arranged accordingly. And it also takes financial discipline to set that money aside/investments.

  16. says

    We’re close on the Pre-Tax Savings government side, but after that apparently we’re behind. Poor decisions in our 20’s left us behind, but we’re in the process of making up for it. Saving approximately 24% of our income now at this time and I actually hope to increase this if we can moving forward. Also, we’re working on a “side hustle” as Mike said.

  17. Ryan says

    My wife (31) and I (38) are on track but our mix of assets is skewed. We have pre-tax savings of $540K, after-tax savings of $825K, and property equity of only $20K to give us a net worth of $1,380,000. We are adding about $125K to our net worth every year primarily through after-tax savings. I think we need to diversify our asset mix to include more real estate. We could use a larger house but we are skittish about real estate due primarily to the increased monthly fixed expenses (higher utilities, water, property taxes, maintenance, etc.) and the increased leverage. Are we being too conservative? It would be nice to enjoy a nicer house but the increased costs really bother us. We like having the flexibility to live on less than we make. It keeps the stress of my job lower knowing that we don’t need the income to support our lifestyle.

    P. S. We really enjoyed the article!

  18. says

    Sorry I’m late to the party on this one, Sam. I was anxiously awaiting this post since you mentioned it a few weeks ago!

    We’re 30 and at $454K, but I’m pretty confident that we’ll surpass $479 easily this year, even if the market goes a little sideways or takes a couple steps down since we’re saving a lot of our take-home pay.

    That said, our split between asset categories (RE vs retirement accounts) is tilted more heavily toward real estate for now (~45%). But the big reason for that is because of when we got married and really started working as a team. It was in 2009 and RE was half price (or cheaper!) compared to historical trends. So we bought as much of it as we felt we could comfortably leverage at the time – it felt easier and safer to lever on RE than it would have to take leveraged bets on the stock market.

    But we expect the asset balance will level out over the next five years or so.

    • says

      Nice. Sounds like a layup getting to 479k for you guys for sure.
      These numbers aren’t an exact science by any means. They are rough guidance figures for those looking to achieve financial security by their 50s and 60s.

  19. says

    I guess I need to start making more money if I’m going to fit into this mold. I will also have to tell my stay at home fiancee to go get a high paying job.

    Sam, it surprises me that you are still in the old thinking that you need to save money for financial prosperity. The more progressive thinkers say you just need to generate income (ideally passive income) and you can retire at any age.

    I’ve stopped caring about my net worth, and I only care about building passive income.

  20. john says

    Question: what data source are actual assets (vs planned assets) based on — where you then take the one standard deviation beyond the midpoint of the normal distribution curve (top 16%)?

    If I understand your logic, this analysis is based on planned asset values…correct? That is to say: if an individual saves, invests at certain amounts, then this is the PLANNED amount you should have.

    However, planned is not the same as ACTUAL. I am interested in what people are actually worth. From this, I want to take the one standard deviation beyond the midpoint of the normal distribution curve (top 16%). Does this make sense? I feel that this analysis is based on planned figures, not actuals.

    Financial net worth is relative. After all, if we are all millionaires, we are all poor…it is by how much more or less we are than the mean that measures our net worth…..and doing so by actual net worth asset values (vs planned), is what I’m after.

      • john says

        Hi Sam,

        Well, i’m 35, just reached the 500k (self-employed, 250 in retirement, 250 in non retirement investable assets…still a renter (but have a small investment property))

        I like the site (if you google “average net worth”, guess what comes up).

        The fact that this topic is popular on here may serve you well if this was expanded a bit more (which you just did with the couples angle, but perhaps looking at other data sources to help quantify what people’s net worth is…and perhaps with respect to geography/cost of living…also how to maximize your relative net worth by moving to a low cost area — which I plan to do (abroad)!. Keep it up.

  21. AO says

    Hi there! I thought this article was very interesting because I feel like it is really difficult to know how you are doing. Thanks for all the work you put into calculating these numbers. I was pleased to realize that it looks like my husband and I are ahead of the game… at least for now! Who knows how drastically things will change when we have kids in the near-ish future.

    We are both 31. I started working at about 25, my husband at 26. Both of our salaries have increased substantially since we entered the workforce. With bonuses, I expect to pull in around $190K and he will get around $100k (and don’t get me started on the sexist tax code – I completely agree with you!). Our net worth is around $770k. I still have student loans from graduate school but at 2.375% interest I’m not too worried about it. We max out both of our 401ks as well as our back-door Roth IRAs plus save for retirement after-tax. Everything is in low-cost index funds. I am fortunate to receive a 6% match plus another automatic 4%; my husband for the first time this year will be getting a 5% match.

    I love your point about both partners being secure enough so both can choose the path they want. My husband recently took a new job that required a $30k paycut but we took the risk and did it because we knew we could handle it financially. We know a lot of people don’t have this luxury. He is enormously happier and it was absolutely worth it. I feel incredibly fortunate to know we have these options. I came from a single income family with a disabled non-working parent and that definitely was never an option for my dad. He isn’t a saver himself, but I think my understanding from a young age that I would have to financially support myself and, eventually, probably my parents too, stoked my savings bug.

    My goal is to save about 30% of our gross earnings for retirement and another 25% for short-term savings (like home improvement, musical instruments, electronics, new cars, vacations). We have a small house in a cheap city that we bought for 215k that was recently appraised for ~300k when we refinanced. We’ve put a lot of money into it, but it’s been for our enjoyment, not investment, and we’ve truly enjoyed those improvements, which we paid for in cash. We are now on a 10-yr mortgage at 2.75%. Not sure if that the best idea but psychologically I just could not handle paying more to the bank in interest than I was putting down in equity, and since our house is so small. We also don’t have any car payments and have saved up so we don’t ever have to have one again, if we don’t want to.

    I love budgeting because to me it is a way to dream about the future. I also budget in part because I think it gives me the freedom to spend money, otherwise I think I honestly would save even more. I work hard to make sure we aren’t sacrificing our quality of life today or in retirement. I am pretty happy with the set-up we have. I know our savings and investing style probably won’t ever make us rich but I also feel comfortable that we won’t have to go live in a ditch in our 80s, and that’s alright by me.

    Sorry for the long post but the other commenters and your article were inspiring! Thanks again for the great info.

    • says

      Well done AO and thank you for agreeing with me on the sexist government and ridiculous tax code.

      Good to hear you guys are making such a high combined income compared to the cost of your house. It is rare for couples to make more per year than the total value of their house!

      How did you end up finding my post curious to know? I always welcome new readers who bring about new perspectives. I really think you two would benefit well with Personal Capital to track your finances and manage your net worth. It’s free and my favorite financial tool.

      Hope you subscribe and keep in touch!

      Best,

      Sam

      • AO says

        Hi Sam, thanks for the reply! When we bought our house, it was more like 2.5X our income – we have come a long way in 5 years! I found your post through a random Google search for something like “average net worth for 30 year old.” And it was exactly on point! I will definitely check out Personal Capital – it looks like it has some features that aren’t offered by my current programs of choice: YNAB4 (which I like a whole lot for budgeting), Mint.com (which I’m not a huge fan of but it serves a purpose), and the Morningstar Portfolio Manager (which is good but tedious to enter in data manually)… and of course my Excel spreadsheets, which you’ll have to pry from my cold, dead fingers. Thanks!

        • says

          Gotcha. Interesting this post comes up rather than several of my other posts. Maybe several of them come up and you just choice the one with married couples?

          Good stuff ramping up your income over the past five years. Temptations to upgrade your house?

      • AO says

        PS – and now that I’ve read through other parts of your site – in particular “Why Do People Like To Reveal Their Income?” – I feel like a bit of a jerk! I personally never ever talk to real people about our household income except my spouse and my dad. But the anonymity of the internet allows a nice break from the silence. Thanks again for the thought-provoking posts.

        • AO says

          Re: finding this post – to be more accurate I first landed on “The Average Net Worth For The Above Average Person” through Google, and then clicked on the link in that post to get here.

          Definitely temptations to upgrade to a bigger house, but we realized that we don’t need any more right now. We’ve decided to hang onto it until our family grows so that we have a better idea of what we will actually need. Also, the improvements we’ve completed make me loath to let go of the place. I have a bathroom built exactly the way I want it and a custom front door with stained glass that I designed… things I’m just not gonna find in a new place, no matter how great it is.

          • says

            Cool. Being content with what you have is one of the greatest attributes for being wealthy. Enjoy your home for the long term! Now that the RE market has heated up, I’ve been wrestling with the temptation to sell. But u realize in 10 years I will be kicking myself that I did.

  22. Rob says

    Just a thought but why would you want a 4 million dollar net worth at age 65, wouldn’t it better to stop working at say age 40 and enjoy an extra 25 years of freedom from work?

    Freeat33 had a great post on that, save 70% of your salary and 10 years later quick your job. You won’t have 4 million but you’ll have a whole lot of happiness

    Just a thought

  23. RZ says

    Nice article, just stumbled on it. I’m 30, my wife is 26 and we’re right in line (actually, even a little above) your guidelines. We’re taking our first step into the rental market soon. I purchased my current house in 2008, near the bottom of the market, fixed it up and should be able to clear $500/month profit on it, plus the tax benefits. Not a huge amount, but a start. We’ve moved up to a slightly larger home, but the new mortgage is less than 95% of our pre-tax annual income. We’re hoping to rinse and repeat, moving to nicer places over the next 10-15 years, while having someone else buy our other homes, so we can continue to invest elsewhere.

  24. DS says

    My wife and I are both 29. Following the Samurai Method, we are right on par with you chart. Unfortunately, the main difference is that all our “savings” is allocated in post-tax accounts. About 45% is a Roth 401K and 55% in other investments/savings accounts.

    I’ve read a lot about Pre-Tax vs Roth 401K, but I can never find a good answer about one or the other. Should we be mixing pre-tax and Roth 401K contributions or all pre-tax for our 401K?

    Right now, combined, we put 20% of our post-tax salary into a Roth 401K. Any help would be greatly appreciated.

    • DS says

      I should also mention that we have been contributing to our 401Ks since we were 22. In addition, we made just shy of 250K in 2012.

      • Ted Hu says

        the biggest reason in my mind is tax rates will be higher later than now.

        The macroeconomics of the matter dictate it. Even though deficits fell to 2% of GdP versus 10+% under W, we are experiencing record low inflation bordering deflation. Tax rates are also the lowest since Eisenhower.

        Yet the structural debt from the two wars, two tax cuts, and medicare part D all charged on credit remain to get paid in the future. Since money until last week was cheap hover above zero and under 2%, and we are zero bound society, it stands to reason that a Roth makes total sense.

        At least from a macroeconomic perspective. Paying govt now may not suit some tax regime or philosophy but if I was to look at the real economy and macrotrends forced to make a bet, I would be a fool not to advantage myself of Roth given how things stand at the macro.

  25. says

    I don’t think I understand the equity portion. If you are putting 20% down in most markets you are already hitting it in year 1 of ownership

  26. Mag Gash says

    This one got me thinking and re-analyze finances. One great reminder. Well, it’s definitely not too late to double our efforts saving.

      • says

        I disagree with the equality – unless you plan to be a DINKs your whole life (which is not a bad thing just not for me).

        Big Government is ok but a bit too conservative in my opinion. I would say I agree most with FS method. Work hard and save hard in the early years then one spouse has the option to try their own thing. It could range from a small startup / “x factor”, changing careers and taking a paycut or following a passion / hobby that adds a better home life or more time with the kids.

  27. Steve J says

    Sam,

    Love reading your stuff, but feel your figures are way off the mark for
    most people, above average or not.
    I know many people/couples in the “60” age group, and they are no where near
    what your figures indicate. I also think they will have comfortable retirements with
    what they have, it just won’t be at the level of lifestyle they enjoyed during their
    working years. Many are already retired but they live very comfortably on $3-$6K a month
    in the Seattle area. Most have pensions albeit not large ones.
    Many will never reach the level of savings/net worth your charts indicate, but they will
    retire comfortably nonetheless. Call me optimistic or in denial but I believe it will happen.
    Just my opinion.
    Steve
    lifestyle.

    • says

      Hi Steve,

      Thanks for your thoughts. By definition, “above average” is not most people. Most people based on skewed statistics are not in good financial standing, at least here in the US.

      $100,000 in retirement savings at 35 and only $250,000 by their mid 60s is not very good. This post is for above average couples (title, content of post). I think we need to find a better barometer for better financial health, and that’s why I wrote this post.

      I have no doubt a couple can live happily off $3-6K/month in Seattle if they’ve paid off their mortgage and live a normal life.

      Regards, Sam

  28. Fattire says

    Love the website! Great advice. A quick comment about gender equality/inequality. My husband and I both graduated the same time, from the same school and started our careers in Big 5 consulting firms. My spousal unit’s salary right out of college was 30% higher than mine and the gap has continued throughout our career (13 years). My grades were even better than his!

    • says

      Welcome to my site!

      Wow, 30% is ridiculous. Time to lay down the law! But, perhaps your husband is just making more than others within his own firm, which is a win-win for you and your husband?

  29. says

    FS, Excellent article! Hard to find real numbers out there. One quick point, which may have already been covered, 401K’s only showed up in 1987 and they were limited to $7,000/year/person. Your analysis assumes a 401k deposit of $17,000 every year/per person throughout. My wife and I just turned 60 and judging by your charts we are sitting between the government average couple and the FS average couple (we did better than 5% but we don’t have the after tax savings or the home equity that you suggest). I think it is important to note that your charts are age dependent, that is, if you are 24 today you will need a lot more at 60 than I need at 60 because you will have 36 years of inflation to deal with. If my father had as much money at 60 as I do he would have been a very wealthy man indeed.
    On another note I agree with your Roth analysis. I know folks who converted, paying taxes on the conversion during their earning years. I tried to tell them that it would be better to pay the taxes after you retire on the amount you need to take out each year while you have no earned income. Never pay taxes up front in the hopes of not paying taxes later, the rules can and will change, look at Social Security (age of benefit, taxing of benefit, recalculation of increase, etc).

    • says

      Thanks Mike and good points indeed. I keep it constant at $17,000 because 1) The maximum contribution figures will continue to go higher probably every year or two, so that’ takes into consideration lower levels, 2) I’m forward looking. The article is 65% geared towards folks who are younger who still have time to save.

  30. azbroker says

    Good post, can you post what % of the population falls in the ranges you lay out during those times? I dont know if that data is available? I’ve always felt that if all world wealth were distributed prorata to the useful life of the world population within 1/2 a generation we would be back a similar distribution as we have today. My wife linked me this post, she is 30, attorney. Im 35, RE Broker, speculator and serial entrepreneur. Right now we are trending in the 50 year old range and having a bit of a conflict. I want to travel more, she is just about to make partner at a bulge braket firm and we cant seem to agree what we need for retirement, her number is 6 million, my number is both of our incomes replaced by passive income, I have achieved the later but she is fixated on her number. So what is more important?

    • says

      I would say less than 15%, but that is to be expected as we’re talking about above average.

      Regarding your dilemma with your wife, it’s great that she is so motivated. If she can make partner at 31-32, that’s huge and maybe you’ll get to 6 million before you know it. Once you get there though, it’s tempting to want more. 2% on 6 mil is $120,000. Is that enough to live?

      I’d sign up for Personal Capital if I were you guys and get a snapshot of all your assets and combined net worth. Once you’ve got a clear picture, you’ll have a better idea of how to plan and get to 6 million with the various scenario analysis tools they’ve got. It’s free too.

      Good luck!

      Sam

  31. SAM says

    Hi Sam,

    Long time reader, first time commenter. I love these charts but I think one of your main assumptions in putting together a joint net worth target is a bit off. While yes, men and women are equal, it’s unfortunately rather difficult for both individuals to pursue high-powered careers at the same level. Why? Geography. Not infrequently a couple will have to relocate in order for one person to pursue a promotion. Even if the other person has been extremely successful, changing cities or companies will set them back a bit. This has nothing to do with gender — for instance, my husband and I just moved for my job and he took small pay cut. He’ll work his way back up in a short time, but nevertheless he made a sacrifice. Some couples choose one career to follow; others switch off. Either way, it is an extremely rare couple that doesn’t have to make compromises for one another’s careers.

    All the best,

    SAM

    • says

      Hi SAM,

      You make a good point about one spouse sacrificing his/her career for the other. It does seem rare for both spouses to get their ideal job in a move doesn’t it? That said, if both spouses are rockstars, I think they will do well wherever they go, unless the place is a very sparsely populated area. For example, go to SF, NYC, Chicago, LA, London, Paris, Hong Kong and if you are at the top of your game, you will get plenty of offers. But it takes time indeed.

      Cheers,

      Sam

      • Lou says

        London, Paris, Hong Kong, etc… I think you’re somewhat parochially overestimating the abilities of even the most rockstarish ‘trailing spouse’ to find a high-performing job when the whole family has relocated to another country. It’s a big ask at a time when the spouse is trying to give the kids some security, because they’ve left behind everything and everyone they know. A bigger ask, when it’s a non-English speaking country. And an even bigger one when the country, like many (including the US) typically doesn’t issue a residency visa to the spouse that even permits working.

        As a married couple, we’ve lived in the UK, Switzerland, and now the US… ask me how I know all these difficulties :).

        Good targets to aim for though. We’re a little behind in our early 40s, having been doing it all on one income, but we’re catching up rapidly and plan to be financially independent within 10 years. And I’m certainly doing my best to indoctrinate my kids and set them on the right path.

        • says

          I agree, which is why I introduced “The Government Taxation Method” to figuring out a married couple’s net worth. One spouse stays at home b/c that is what the government wants.

          But, I’d love to hear more about your perspective on what one spouse did when you moved around the UK Switzerland, and now US. What are you or she or he doing? :)

          • Lou says

            Oh, I’m not sure it’s what the govt wants? Surely the G would prefer that I went out to work and paid tax, plus put my kids into childcare so that more daycare workers could be gainfully employed and pay tax too!

            Nevertheless, on the govt table (my personal favorite, naturally :) we’re adrift from the targets in our early 40s, but should hit them by 50. It’s good to have goals – I have a spreadsheet for annual Net Worth targets for the next decade until we chuck it in, and then a Lifetime Spreadsheet scrolling out our income/ expenditure, pensions kicking in, US Social Security and European equivalents, until we’re 100.

            The global nomad stuff… hubby works for an engineering-based multinational (and since I’ve mentioned that, I’ll also point out that unless you work in tech or finance, both having rockstar careers in cities at all, let alone the same city, is unlikely). We started in the UK, he got upgraded to the European head office, and now we’re in the World head office; we’ll stop here at least long enough to see the kids through high school. He’s worked, I’ve done everything else, in different environments/ cultures/ school systems/ languages. It’s fun in a breathtaking roller coaster way, but plays havoc with your financial planning. Take what you do, and then imagine keeping track of it all and making decisions across three completely different investing regulatory environments, tax regimes, FICA-a-likes and the resulting state pensions, and currencies.

            In fact, given all that, points to me for even being on your tables at all!

  32. JoeyBoodz says

    What tripe. So lets ignore the fact that there are only 10 million millionaires in the nation and pretend the “average” 60 year old plus (of which we have 50 milliion +) are all millionaires.

  33. Akatz says

    Interesting chart. Didn’t read all of the comments so forgive me if this was already mentioned!
    1) Where is the student loan debt? Total net worth should be negative for the first few working years even for above average people if we’re assuming you didn’t go to school on daddies money. Your top 16% person probably went to a top rated school where they paid top dollar for their education (even after grants etc).
    2) The work start date and assumed income are much too soon and much too high even for top 16%. I would imagine the typical top 16% person will have a masters (at least), which means they aren’t starting to work at age 22. Or 23…or 24…
    3) In general the savings and growth amounts seem too high on the front end and then too low on the back end. (Unless you indexed them for inflation?) If I had $112k in tax deferred accounts saved by age 25 I would hope to to have near $1.7M if left to grow over 40 years *assuming I didn’t put another dime into it after age 25*. Yet your figures are showing $2.5M at age 65 even with all those contributions between 25-65.
    4) Lending standards are tighter then they were. The home equity figures at age 30 – 35 are perhaps too low. Conforming loans require a minimum of 5%, but in practice this is closer to 10% or even a full 20%. Perhaps it’s easing up over the last year since I got mine. This increases money required for home equity while reducing money available for higher returns in post tax savings. I think it’s OK to assume the intelligent investor re-balances excessive home equity into securities later on in life.

    • says

      Good questions!

      1) Above average people often have bank of mom and dad pay or get grants

      2) You are free to go by years of work experience instead of age

      3) You are right. Most people who disagree are under 35. Most people over 35 all nod their heads in agreement.

      4) I think it’s about right.

  34. Asif Itellyou says

    I can confirm that your goal for the above average person is realistic. I retired in 2007 at age 65 after 43 years of work. My financial net worth then was $2,830,300. That was before the so-called Great Recession. Now, in May 2014, my financial net worth stands currently at…$4,239,600. My primary residence and a vacation building lot together are worth approx. $1.1M. Liabilites?: None, zero debt. I can’t speak to the couple situation. I was divorced in 1992; best financial move I ever made!

  35. JJ says

    You do a lot of talking about sexism while assuming that the government assumes it is the woman who will stay home with the kids. The government assumes that the above average couple will decide that either the man or the woman in the relationship will stay home for the kids. It is a perfectly valid assumption for the government to make (but why do you assume they think the woman in the relationship will always stay home)? Is the 12.5% increase never targeted at stay at home dads?

  36. m says

    Hey Sam,

    I’d like to consider myself financially savvy with my spouse and I at combined incomes in our early 30s in excess of $200k now. I have shared your website with several colleagues in the financial arena and asked them their opinion. These are some very, very lofty goals in my opinion. While I can say I have acheived these, I was lucky and purchased properties that quadrupled from the bottom of the housing market. What income level would you consider above average as you set up your article? For instance, a single 23 year old you mentioned should be around $20k n/w. keeping in mind this person probably attended college 18-22, and has student loan debt and likely having no home building equity because they were unable to get approved due to income levels during college- what did you consider for income levels starting at 23? what would you consider an above average income at age 30? Perhaps a follow up article outlining details about your first article on this subject would help folks like me out. I really do appreciate the information and the time you spent on this- even years after you completed it you can see folks are reading it. thank you.

  37. Dennis O'Hara says

    At 34 I have 250k in equity since I bought in a good year (2009) and 250k in all post tax. So I don’t really fit in the correct spot for above average with couples. However, my wife doesn’t work and stays home with the kids so should figure myself in the singles category? My annual income of 130k says I’m at 84%. I also did not graduate from college and entered engineering as mostly self taught. Interesting site.

    • bs-snipper says

      excuse me but what do you do exaclty? i work for a fortune 500 company and engineers with masters degrees and PhDs your age in my company do not even make your salary yet you are a self proclaimed engineer with just a highschool degree, so im curious what exactly you do or who you work for. also you have kids (plural) and a stay at home wife on one income been able to save 250,000 post tax in less than a decade? yea sounds very suspicious if you ask me. many couples in your situation making double your salary still cannot achieve what you claim.

      • Dennis O'Hara says

        I am a self taught electrical engineer that maintains, repairs, and installs Uninterruptable Power Supplies and other ancillary critical power equipment. I am also not alone in my niche industry regarding my method of training or skill based pay. I maintain data centers for customers in industries such as finance, healthcare, co-location, and social networking. You may say you work for a fortune 500 company but the uninterruptable power keeping the servers running is maintained by UPS engineers, like me. Oh and you can take your BS attitude an F&%k off. Just because you can’t achieve in the method you wished shouldn’t mean that others can’t. Nor should you discount the method in which others do so.

    • bs-snipper says

      Your claim that you now have 250,000 in home equity because you simply bought at “a good time” is also a bogus claim. Looking at the S&P Case-Shiller 20 city composite index as a sanity check no your fraudulent claim shows that since 2009 the index has only advanced 20%, that means that on say a $500,000 your home equity due to appreciation would roughly be $100,000, so you would have to had put down close to $150,000 as a down payment, yet you did this on one income and you have kids and you make only $130,000/year, sorry doesn’t add up. I assumed $500,000 as the base home price which is actually way higher than the national median home price, but I am exaggerating my numbers and they still do not add up to justify your bogus claims.

      • Dennis O\'Hara says

        I purchased a home in Corona, CA for 209,000 with 20% on a 30 year conforming in 2009 that is now worth 480,000. Wtf do you call that? I had my first girl in 2012 and my second 2 months ago. F%$k you and your stats. I also still maintain just over 250k in post tax saved income diversified in mutual funds, etfs, and bonds. The only thing lacking is significant tax deferred 401k and ROTH IRA savings. In addition check a stat of what the stock market did last year. If you didn’t earn over 20% your a kook. In fact your a jealous lame altogether. Hope those student loans are working out for you. I opened all my books in a library or at home while working. I moved up to an EIT the old fashioned way, HARD WORK! Look it up.

      • Dennis O\\\'Hara says

        Bull-Sh&% Snipper. I purchased a short sale home in 2009 in Corona, CA for 309,000. From then to now I have paid the mortgage with some additional principle down to approx 220,000. I refinanced 2x taking no money out to get to 3.5% still at a 30 year conforming. I still pay the same monthly as to pay towards principle. I also eliminated escrow and pay ins/taxes myself. My home with some rehab done by myself and friends is worth 480,000 give or take. Comps have it slightly higher. At it’s height it was worth over 530,000. I had a baby girl in 2012 and another just a few months ago. I’m still on a single income making about 140,000 per year with my own business and a salaried position. Your stats and unfounded claims are of no consequence to my current position. You are a hater and a lame. I did it with hard work and educated myself at home and in the library. Anyone else that lacks the pessimism and negative disposition you have can do it too.

  38. manyo says

    Bs sniper- while i dont agree or disagree with you and simply seeing other folks opinions, i do want to point out some personal observations. In 2011 i bought a home for 201,000. I currently have that home under contract for 325,000, and i put 18,000 into it for rehab. I purchased a home last year in May for 376,000, and sold it 2 months ago for 443,000. Case schiller may be a means or average, but i buy depressed homes, fix them up, and do better than the case schiller may indicate. The authors personal experience may not be the norm, nor is mine, but an educated buyer can do quite well in real estate.

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