Here's The Average American's Net Worth at Every Age. How Does Yours Compare?

Net worth is an important measure of your financial situation. You can calculate your net worth by adding up the value of all that you own, such as your cars, house, the cash in your bank account, and other personal possessions, and then subtracting all of your obligations, like your mortgage and credit card balances.

When you've calculated your own net worth, you may want to compare that number to your fellow Americans to try to get an idea of how you're doing financially. The Motley Fool's recent research into average net worth can help you to do that.

Here's the average net worth by age in the United States

According to The Motley Fool's research, here's the median net worth for every age group based on 2022 data from the Federal Reserve.

As you can see, net worth tends to go up as you get older. However, once you've reached age 75, it starts to decline again. This is because seniors dip into the retirement savings they've acquired in their brokerage accounts to cover their expenses.

How to increase your net worth

Net worth is an important measure of your financial security. You want to own more than you owe, and eventually you want to have enough assets that you can live off of them without bringing in a paycheck.

So, whether your net worth is above or below average for your age group, you'll still want to work on growing it over time. And there are a few ways you can do that, including the following.

Increase your income

Earning more money doesn't automatically grow your net worth. If you spend the extra cash you bring in on disposable goods, it won't help at all. But if you earn more money, it's easier to find spare cash to invest that can help your asset balance to grow.

Acquire assets that produce income for you

It's hard to grow your net worth just by saving money alone. You'll want to invest it so it can work for you. You can do this by buying assets that ideally produce positive returns, such as stocks or certificates of deposit (CDs), which are paying especially high rates right now.

Pay down debt

Reducing your liabilities is another great way to grow your net worth. You should focus on paying off high interest debt, such as that held on credit cards. Paying extra each month toward your principal can bring your balance down faster. You could also use a personal loan to pay off higher interest debt, which can reduce the interest you pay and make debt payoff easier. Paying off low-interest debt like a mortgage early usually doesn't make sense, though, as you can get a better return by investing than the return on investment (ROI) from saving on interest costs.

The more of these steps you take, the higher your net worth can grow, and ideally you can end up with many more assets and many fewer debts than the average American has.