What Should Your Net Worth Be at Age 50?

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Net worth tends to rise over time. Here’s what the typical adult in their 50s is worth. [[{“value”:”

Your 50s are a time when finances really come front and center for a lot of people. They may only have 10 to 15 years left in the workforce and they’ll soon find themselves living off of their savings. Some may also still be juggling care for dependents or college tuition costs on top of everyday expenses, like credit card bills and the mortgage.

It’s not always easy to find the time to take a hard look at your finances, but it’s helpful to assess where you’re at periodically. One way to do this is to look at your net worth. Below, we’ll talk about the average net worth at 50 and how you can increase yours.

What is net worth?

First, net worth is simply a measure of your assets minus your liabilities. Assets are things you own, including:

Cash in checking and savings accountsCertificates of deposit (CDs)Health savings account (HSA) fundsRetirement account fundsTaxable brokerage account fundsLife insurance policies with a cash valueThe fair market value of personal property, like your home and cars

Liabilities are debts that you owe. These include:

MortgagesCar loansPersonal loansCredit card balancesHome equity loans or lines of credit

To calculate your net worth, you add up the total value of your assets and subtract your liabilities. So, for example, if you had $500,000 in assets and $100,000 in liabilities, your net worth would be $400,000.

Note that calculating net worth isn’t always this easy. It’s not difficult to note the value of your bank accounts or loan balances. But figuring out the value of personal property, like your home, may require a professional appraisal.

What’s the average net worth at age 50?

The average net worth at 50 is $1,361,319, according to a recent Empower survey. But don’t panic if you’re in your 50s and your own net worth is nowhere near this number. Averages aren’t usually the best metrics to use when comparing yourself to others because it only takes a few high earners to skew things dramatically.

Median figures give you a better comparison of how you stack up to the typical American. The median net worth for a 50-year-old is just $289,633, according to Empower. This sounds like a lot of money, but whether it’s adequate depends a lot on your personal financial goals.

Though it’s tempting to compare ourselves to others, we often do much better if we set our own financial benchmarks and track our progress toward them over time. This could be for retirement savings or a large purchase, like a new home or car.

How do you build your net worth?

Building your net worth is simple enough on paper: You want to increase your assets and reduce your liabilities. In practice, it’s not always that easy. Reducing liabilities usually means paying down debt. This requires extra cash, which may require you to scale back your spending in some areas.

Many find this challenging, but the right tools may make it a little easier. For example, if you have credit card debt, using a balance transfer card may help you pay it off more quickly because your balance won’t earn interest for a little while. Personal loans can also help you get out of the credit card or payday loan debt cycle.

Increasing your income is another way to boost your net worth. This gives you extra money you can put toward reducing your liabilities, as well as extra cash you can put toward purchasing more assets. There are several ways to raise income, including working overtime or picking up a side hustle.

If retirement savings are your focus, use tax-advantaged accounts, like 401(k)s and IRAs, and consider making catch-up contributions — extra retirement contributions allowed for adults 50 and up — if you’re able to do so. It will take time, but if you follow the above tips, you should make slow and steady progress toward your financial goals and a larger net worth.

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