One of the most popular posts on Financial Samurai is The Average Net Worth For The Above Average Person. But what about the average net worth for the above average married couple?
Life is so much easier once you have a highly compatible partner. When it comes to building wealth, above average married couples should be able to build wealth much quicker than a single person. Many big expenses such as living and food expenses are shared.
Before we calculate the average net worth for the above average married couple, let’s first define what above average means. You also don’t have to be married. You can simply be in a long-term, committed relationship with similar financial goals.
The Above Average Person Defined
The “above average person” is loosely defined as someone who was a B+ or better student in high school, graduated from college (~36% of the American population), works hard, and plays well with others.
The above average person also takes full advantage of their pre-tax retirement plans, saves additional disposable income, stays on top of their finances by utilizing free financial tools, 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’re definitely not the above average person! You’re the type of person who wants to go straight to the corner office without putting in his or her dues.
Depending on the source, the average net worth in America is somewhere between $150,000 – $250,000. But the median net worth in America is closer to $90,000.
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 Average Net Worth Of The Above Average Person Chart
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. Further, 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 comes 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.
Related: Recommended Net Worth Allocation By Age And Work Experience
The Average Net Worth For The Above Average Married Couple
Everybody knows that married couples who stay together have a financial advantage over single people. A couple can split a two-bedroom apartment instead of paying more living apart. It’s much more efficient and cheaper to cook for two. The economies of scale are everywhere for couples.
Here are some attributes of above average married couples.
- Stays together for the long term.
- Discusses long term financial goals e.g. retirement age, retirement number, succession planning.
- 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 always comes to a compromise.
- Plans for the financial expense of children even if they don’t have any.
- Each spouse can financially support themselves if the relationship ends.
- Only have children if they’ve run the numbers and know they can afford them.
- Does not get divorced. Unless you are Bill and Melinda Gates or Jeff and MacKenzie Bezos. In which case, it doesn’t matter. Best to live the YOLO Economy post-pandemic to the max with your massive fortunes.
- Understand the importance of the separation of tasks. The divide and conquer strategy places to each partner’s strengths.
Although the numbers are important, I don’t want readers to get hung up by the numbers. The cost of living is very different for those living in New York City versus Birmingham, Alabama. Feel free to adjust down or up the numbers according to your cost of living.
My main goal is to get couples talking about their finances. An above average married couple figures out synergistic ways to grow their net worths together.
Related: How To Retire Early As A Couple
Various Net Worth Calculation Methods For Couples
Here are three ways to calculate the average net worths of above-average married 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 provide the same financial contributions.
Both couples studied hard in school. Both couples work and save aggressively. One simply has to double the amounts in my above average person net worth chart to get to the Equality Net Worth chart.
Some of you may argue that men and women are not equal. As a result, you will 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. If they are not equal in your country please share in the comments section why. Further, if you truly love your spouse, you will make him or her financially independent as well.
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.
Discrimination and sexism is wrong. Therefore, I am a strong proponent of the Equality Net Worth method to determine the average net worth for the above average married couple.
Independence is a core part of Americana, except for grown adults who still live with their parents. Over time, it seems like more and more adults are utilizing The Bank Of Mom & Dad to get ahead.
The Government Taxation Method
Despite federal income tax improvement after Trump became president, there is still a marriage penalty tax. Notice how an individual pays a 37% marginal federal income tax bracket after $539,900, but a married couple starts paying a 37% marginal federal income tax above $647,850 for 2022.
In other words, 1+1 does not equal 2. Instead, 1+1 = 1.21. Therefore, it’s not a good idea for two high-income earning people earning more than $539,900 each to get married.
The government believes 1+1 = 1.21 because it is sexist. Most people in congress are men. Therefore, they just assume that one spouse, mainly the woman, stays at home to raise children.
Of course there are tremendous benefits of having a stay at home spouse take care of the kids. Your children get more love from the person you trust the most, you save on daycare costs, and more. But for goodness sake, let the American people decide whether one spouse should stay at home or not.
A combined income of $612,350 provides only a 20% greater threshold until the top 37% tax rate kicks in. Therefore, we’re going to essentially only increase the combined net worth by a marginal amount as well using the government’s logic.
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.
President Biden is likely going to raise taxes on households making $400,000 a year. President Biden also wants to increase the capital gains tax rate and eliminate the stepped-up basis. All the more reasons for one spouse to stay at home and raise the kids.
The Financial Samurai Method
By now I’m sure I’ve upset many couples with my various conjectures. The Equality method and the Government Taxation method are logical ways to figure out the net worth for above average married couples. What you are really upset about is the revelation of your own beliefs.
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 20% 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.
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 that shows 1 + 1 = 1.7.
Assumptions For The Above Average Married Couple
- 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 25-50% 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 by the time they reach 40 years old. They develop the optionality for one spouse to retire or find a different career.
- By age 50 chances are high both spouses can retire provided they have sufficient passive income streams to cover all expenses.
The Average Net Worth Of Couples Is Higher Than Singles
The above average couple is based upon my assumptions for the above average person. It is not based on the average American who wakes up 10 years later hating his or her job because he or she forgot to save and invest all this time. The average American cannot come up with $1,000 to pay for an emergency. This is not the example you want to follow.
If you haven’t reached my suggested net worth figures yet, don’t worry. Get motivated! Just the fact that you are reading this article means you are serious about supercharging your finances for a better life. Now you will have some clear financial goals as a couple. Give your savings and investments some time to compound.
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. Further, marriage penalty tax has largely been abolished. There won’t be a marriage penalty tax if your household income is under $500,000. Whereas in the past, the threshold was much lower.
As we’ve all discovered during the global pandemic, having someone you care about to share time with is extremely important. Not only are above average married couples wealthier, they are likely healthier as well. Here is my recommended net worth targets by age as a guide.
If you haven’t found someone you want to be with or more, I suggest spending more time on relationships. Money is only a means to an end. Life is not worth living if you don’t have someone you love to spend it with!
Recommendation For Couples
If you are an above average married couple, you are diligently tracking your finances. If you are not yet, then sign up with Personal Capital. It is a free online platform which aggregates all your financial accounts in one place so you can see where to optimize.
Their 401K Fee Analyzer tool is saving me over $1,700 a year in fees I had no idea I was paying. They’ve also got an amazing Retirement Planning Calculator. It uses real data and Monte Carlo simulations to produce realistic retirement results. It’s the best planner out there.
Open financial communication is common practice for an above average married couple. Utilize a free financial tool to reduce stress and grow your wealth.
Above Average Married Couples Invest In Real Estate
Every above average married couple I know owns their primary residence and then invests in real estate as well as stocks.
Real estate is my favorite way to achieving financial freedom. It is a tangible asset that is less volatile, provides utility, and generates income. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms.
With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.
My two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
I’ve personally invested $810,000 in private real estate to diversify my investments and earn more passive income. Since 2017, I’ve received over $624,000 in distributions and passive income to help support my family. Both platforms are free to sign up and explore.
It’s now more important than ever for an above average married couple to have an open dialogue about their finances. As we come out of the pandemic, a lot of couples will decide to move on from their partners. Nobody is willing to put put their lives on hold any longer. The Average Net Worth For Married couples is a FS original post.
Steve (NWOutlier) says
A students work for C students or drop outs.. your opening comment should be reviewed
Hello, Thanks for the wonderful article. I come back and refer to it past 5 years. Even though the money saved for college funds of kids should not be part of net worth of a couple. shouldn’t some weightage be given for the money saved for it? what I mean in the minimum shouldn’t it be a category in the tabular column. It was after all saved by the couple penny by penny.
Financial Samurai says
Absolutely. The money for college should be included in your net worth. Money is meant to be spent!
Love the write up and benchmarks to give people goals. What is comprised of “post tax savings”? Only Roth accounts?
Financial Samurai says
Post-tax savings include Roth, taxable brokerage accounts, private equity, real estate crowdfunding, rental properties etc. Basically anything beyond your 401k, 403b, IRA accounts that are pre-tax.
See: After-Tax Investments Accounts By Age To Live A Great Retirement Life
Makes sense. Thanks for the clarification!
Uncle Louie says
Scary how dead-on your numbers are! Including your 1.7 calculation! My wife and I made roughly the same salary throughout our careers, me peaking at $125K and she at $135K now. We’re 63, both have Masters. I lost my job in a corporate takeover in my mid-50s. Blindsided. Pivoted to a little 1099 part-time and taking care of my dad. I also traded doing all the chores for not having to go back to the corporate world. Take great vacations every year (even in 2020) and drive nice Acuras into their 200s (although starting to lease now).
How did we do it starting with nothing? Just like you say in your definition… max out 401Ks, Roth IRAs, 529s & Coverdale IRAs… learn to invest… live modestly, including your house… and let’s be real… have faith in a (tech leaning) bull market, which I still do for several years. And don’t follow the freak-out go-to-60% bonds/cash 40% stocks advice near retirement. Just put aside cash to survive a crash of 5 years ($600-$700K) and leave all the rest in stocks. You’ll weather the downturn fine and make the great gains right after the bottom to give to your kids and grandchildren down the road.
Finally, thanks for this site! I’ve been visiting it through the years for confirmation. You rock, dude!!
Thank you for your posts. I have been reading them for the past several years. Your website has been an inspiration for me to save aggressively and get my finances together in one place. I use Personal capital free tools to monitor our finances and it has been working great this far.
Based on your table (Financial Samurai method) for Net worth of Above Average Couple, do you think these numbers for both Pretax and Post tax need to be updated to higher values (given the incredible bull market run) in the stock market.
We are tracking very close to our age range based on your estimates, but wonder if part of it is due to recent bull market trends? I am always wondering how we are doing compared to other Financial Samurai readers. Do you have data from informal surveys as to what percentage of your readers fall within the ranges that you have in your table?
Thanks again for your incredible work with the blog.
45. Just this week cracked 1.5m as a couple. Fairly balanced though wish we had more after tax savings.
My wife stayed home with as kids from her teacher job for 8 years until our youngest went. This was a choice I wouldnt redo given the chance. Sadly cause of this she basically doesnt have much saved from her side of net worth.
My older son leaves for college in 2 weeks. Hes been asking recently about his finances and Im proud that he worked hard during high school to achieve the scholarships that will basically pay for his BA.
Looking forward to retiring and starting a side hustle that allows more freetime.
Thanks for the goals you proved Sam.
Sam @ Doyourblogwithme says
Sam, you article is very complicated
I am from Toronto, Canada, only one thing clicked with me
I remember my family doctor once I asked him why he works 3 days a week
it is very hard to book an appointment with him
He told me that if he works extra days , he will pay more taxes so it is not worth it at all
This is very hilarious
“I’m not sure which century or country you are living in, but males and females are equal here in America at least.”
Surely this is said tongue-in-cheek and coupled with an eye-roll
Financial Samurai says
Do you believe men and women are not equal in America? If not, please elaborate.
Diana Jin says
Since we are talking about net-worth, earnings power is obviously closely tied to this. If you look at any of the hundreds of reports regarding gender-pay-gap and board/ c-suite composition (where, arguably, a lot of wealth is concentrated), I think it’s quite clear that men and women are not equal in America. (I can’t include any links, but payscale, pew research, cnbc, etc. all have reports and # on this).
If you’re saying that aspirationally, US intends for men and women to have the same opportunities, I would more likely agree with that. But reality is different from aspirations.
I agree, I worked as a Full Professor at Penn State University for 23 years retiring in 2018. Until the last 3 years there I was paid 15% less than male colleagues who arrived 3 years after me. Every year I asked for more equality and was ignored. Finally, a Chair came in who wanted to bring women equally into the payroll fold. It took PSU three years to bring my pay up to the male equivalent. By then I was turning 60 and ready to retire. Even though, at this time it was recognized that there had been a long timely equity gap, there was no back pay to equalize what had been denied. This still goes on in many places. It is still a very white male world out there.
Working for 23 years as a full professor at an r1, full professor in 1995. Starting salaries go up. So, the male colleagues likely started at a higher salary. Also, all full professors are not equal. Grant funding plays a role. Demand for the professor’s work plays a role. There’s not enough info here to judge gender disparity. A white male world, indeed. Very sexist and racist of you. More women graduate from college today than men.
Relative to board/c-suite situations, that’s rarefied air that is functionally irrelevant for all but the most upper crust of society.
the reason that women are not “equal” comes from them not working as many hours and doing jobs that pay less because they can not or will not do ones that pay more.
Ha! This is a joke… wake up. I was fortunate enough at one point in my career to have a male manager stand up for me. He told me I brought in more money for the Firm than all the rest of my male colleagues and made the least money of all of them. Over 2 years, he gave me massive raises to bring me up to their pay. I got LUCKY that he wanted to fight for me. I am an engineer with an MBA from a top university. Meanwhile, I’ve also been hustling to take care of my family. Women typically work HARDER for the same pay… at work and at home.