What Should Your Net Worth Be – By Age
I always like to know if I’m on the right path and on schedule with my investing and saving. I normally keep a spreadsheet of what my net worth needs to be at various points along my journey. I use this as one of many tools to see if I’m making good decisions about saving, investing and avoiding purchases. We each have a unique number that we are striving for. Certainly, for a long time, one million dollars has been the “magic” number. That’s not quite as magical as it once was but it’s safe to say that if you amass $1 million dollars at any age, you are doing much better than the majority of others. So what amount of money do you need to have at each age? Here’s a graph from age 21 up to age 65 with the dollar amounts you want to strive for at each age. You can reach this number in multiple ways. You could save more or compound your existing assets by changing your investment strategies. You’ll find that some years you miss the mark and others you exceed it. A changing market certainly will take it’s toll.
| Age 21: $0.00 | Age 32: $47606 | Age 43: $158606 | Age 54: $417418 |
| Age 22: $2860 | Age 33: $54274 | Age 44: $174154 | Age 55: $453672 |
| Age 23: $5948 | Age 34: $61476 | Age 45: $190947 | Age 56: $492826 |
| Age 24: $9284 | Age 35: $69254 | Age 46: $209082 | Age 57: $535112 |
| Age 25: $12887 | Age 36: $77655 | Age 47: $228669 | Age 58: $580781 |
| Age 26: $16778 | Age 37: $86727 | Age 48: $249823 | Age 59: $630103 |
| Age 27: $20980 | Age 38: $96525 | Age 49: $272669 | Age 60: $683371 |
| Age 28: $25519 | Age 39: $107107 | Age 50: $297342 | Age 61: $740901 |
| Age 29: $30420 | Age 40: $118536 | Age 51: $323989 | Age 62: $803033 |
| Age 30: $35714 | Age 41: $130879 | Age 52: $352769 | Age 63: $870136 |
| Age 31: $41431 | Age 42: $144209 | Age 53: $383850 | Age 64: $942607 |
Age 65: 1,020,875
Now for the assumptions:
-You invest $2500 per year over your entire life
-You earn an 8% interest rate every year (In practice, some years will be better, some will be worse)
I confess that I love playing with numbers like this. Using this tool, I can quickly glance at my investment balances and compare that to the chart above to make sure I’m on track. I actually use a different set of numbers based on my income and my current balances to see where I will be if I keep up at the same rate that I’m investing today. Since I know I want to have much more than $1 million by the time I retire, I’ve got a more aggressive age vs net worth chart.
Want to create your own chart? Go to:
http://www.money-zine.com/Calculators/Retirement-Calculators/401k-Savings-Calculator/
and punch in your own numbers!
11 Responses to “What Should Your Net Worth Be – By Age”
Pingback from Around the PF Blogosphere: September 27, 2007 | The Sun’s Financial Diary | A Personal Finance Blog on Saving and Investing
Time September 27, 2007 at 8:22 pm
[...] Loves Your Money shows your net worth and your age. Looks like I should be in my 50’s now from the [...]
Comment from frugal zeitgeist
Time September 28, 2007 at 5:56 am
Thanks to the magic of inflation, I think the scale is heavily dependent on age. The scale above looks like it would work well for someone nearing retirement, but I’m 38. I don’t think $1,020,875 is anywhere close to what I’ll need to have a really good retirement (yep, very subjective, I know) by age 65. My magic number is about 3.5 to 4x that, not including real estate.
Comment from broknowrchlatr
Time September 28, 2007 at 7:10 am
Yep, definately dependent on your age. I am 27 and married with 2 kids. If I have $1mm when I am 65, it will be a significant failure.
$1mm give you $40k of yearly income. But with inflation, that is less than $20k in 2007 dollars. Thats not much of a retirement.
Comment from Hazzard
Time September 29, 2007 at 1:48 pm
Yes, one million today (or yesterday) isn’t one million tomorrow. I think this is one view. It’s definitely worth figuring out how much you REALLY need by the time you retire and then making plans to meet that goal.
Pingback from Sunday Money Roundup – County Fair Edition. | My Two Dollars
Time September 30, 2007 at 8:02 am
[...] Motivated Enough To Be Financially Free?” Why yes, I am! Everybody Loves Your Money tells you What Should Your Net Worth Be – By Age. Of course, it all depends on circumstance and if you are going to inherit millions when your [...]
Pingback from Mapgirl’s Fiscal Challenge / Articles I Liked Last Week
Time October 3, 2007 at 12:53 pm
[...] at Everybody Loves Your Money has created a chart to tell you what you have should have saved by now. It’s got a number for every age between 21 and 65. Even though I’m in my early [...]
Pingback from Everybody Loves Your Money – Living for today – Planning for Tomorrow » Net Worth By Age – $2 Million Goal
Time October 3, 2007 at 2:33 pm
[...] Comments Mapgirl’s Fiscal Challenge / Articles I Liked Last Week on What Should Your Net Worth Be – By AgeBad Credit Loan on Adjustable Rate MortgagesLast World’s News » Blog Archive » [...]
Comment from Grace
Time October 4, 2007 at 12:43 pm
I’m guessing you don’t really meant Net Worth, which would include real estate, personal property, etc. It sounds more like you mean retirement savings. Dang! I was doing OK if you meant Net Worth. Otherwise, not so much!
Comment from BuildAndSucceed
Time October 30, 2007 at 3:33 am
Thanks for the calculator link… I do the “by age” calculation all the time on excel… It can take forever that way. I dreamed of this calculator LOL
Great blog by the way 
Comment from Jerry
Time November 2, 2007 at 7:45 am
I agree with Grace – if you view it on the actual Net Worth side of things, it would lead me to think that I’m doing all right, but with retirement savings? Well, it’s definitely a wake up call. Also, as a side question, does anyone know whether insurance policies affect the calculation of real net worth?
Jerry
Comment from Mike
Time September 27, 2007 at 11:06 am
I wonder if that “1 million rule” is for one person or a couple. If I expect to be still happily married by the time I retire, should I aim for 2 million instead? Or, if I expect to be single, should I aim for only $500k?