Average Net Worth by Age, Race, and Education

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Net worth, or the difference between an individual’s assets and liabilities, is an essential indicator of financial health and stability. However, net worth can vary significantly depending on a person’s age, race, and education. Understanding these variations is critical in identifying and addressing systemic inequalities contributing to wealth disparities between different demographic groups.

This article examines the average net worth by age, race, and education in the United States based on data and research made available by the Federal Reserve.

Average Net Worth by Age

How Net Worth Changes as Individuals Age

As individuals age, their net worth tends to change based on factors such as education, career path, and investment decisions. Generally, individuals experience an increase in net worth as they progress through different stages of life, with the peak typically occurring during retirement.

Data Analysis of the Average Net Worth of Different Age Groups

Data analysis of the average net worth of different age groups reveals interesting trends.

  • Age 18-24: -$9,000
  • Age 25-29: $26,100
  • Age 30-34: $68,200
  • Age 35-39: $111,000
  • Age 40-44: $193,800
  • Age 45-49: $283,300
  • Age 50-54: $413,200
  • Age 55-59: $611,000
  • Age 60-64: $871,100
  • Age 65-69: $1,066,000
  • Age 70+: $1,222,100

According to data, the average net worth of individuals aged 18-24 is negative, with the majority of people in this age group still in school or graduating with student loans. As individuals enter their 30s, their net worth tends to increase, with the average net worth of individuals aged 35-44 approaching $200K. This increase is often due to increased income, investment decisions, and the accumulation of assets such as real estate.

The average net worth in the 45-54 age group increases substantially from almost $300K to $415K. This is typically the peak earning period for many individuals. They may have paid off a significant portion of their debts, such as student loans, allowing them to accumulate more assets. In the next decade, the average net worth of Americans starts touching $900K, with many individuals approaching retirement and focusing on building their retirement accounts and other assets.

Finally, in the 65+ age group, average net worth increases to over $1M, with many individuals relying on retirement accounts and other sources of income, such as Social Security, to support their lifestyles. However, it’s worth noting that net worth can vary significantly within each age group, depending on various factors such as education, race, and career choices.

Comparison of Net Worth Between Age Groups

When comparing net worth between age groups, it’s clear that younger Gen-Z and Millennials have a much lower net worth than their older counterparts, Boomers and Gen-X. Younger people are dealing with a tough economic climate and may feel like they may never accumulate enough assets to reach the levels that Boomers currently enjoy.

However, it’s essential to remember that net worth is not the only measure of financial success and that younger individuals have more time to accumulate wealth over their lifetimes.

Average Net Worth by Race

Racial Wealth Gap

The racial wealth gap is a persistent issue in the United States, with significant disparities in net worth between different racial groups. This gap can be attributed to a variety of factors, including historical discrimination, systemic racism, and disparities in access to education and employment opportunities.

Data Analysis of the Average Net Worth of Different Racial Groups

  • White non-Hispanic households: $983,400
  • Black households: $142,500
  • Hispanic households: $165,500
  • Other or multiracial households: $319,300
  • All households: $746,800

Data analysis of the average net worth of different racial groups reveals stark disparities. The average net worth of White households is $983,400, while the average net worth of Black households is only $142,500. Similarly, the average net worth of Hispanic households is $165,500. This means that the average White household has nearly seven times the net worth of the average Black household and nearly six times the net worth of the average Hispanic household.

Comparison of Net Worth Between Racial Groups

When comparing net worth between racial groups, it’s clear that the racial wealth gap is significant and persistent. This gap is even wider for those in the top 10% of net worth, where the average net worth of White households is over ten times higher than that of Black households.

It’s important to note that net worth can vary significantly within each racial group, and not all individuals within a particular racial group experience the same level of wealth or poverty. However, the overall trend of significant disparities in net worth between racial groups remains a major issue in the United States.

Efforts to address the racial wealth gap have included initiatives to increase access to education and employment opportunities, improve access to affordable housing and credit, and provide targeted support for minority-owned businesses. Additionally, policies aimed at reducing income inequality and strengthening the social safety net can help address the root causes of the racial wealth gap and improve economic outcomes for all Americans.

Average Net Worth by Education

How Education Level Can Affect Net Worth

Education level is another factor that can significantly impact an individual’s net worth. Higher levels of education are often associated with higher incomes, better job opportunities, and more opportunities for investment and wealth accumulation. As a result, individuals with higher levels of education tend to have higher net worth than those with lower levels of education.

Data Analysis of the Average Net Worth of Individuals With Different Education Levels

Data analysis of the average net worth of individuals with different education levels shows significant disparities.

  • Less than high school degree: $68,900
  • High school degree only: $212,500
  • Some college or associate degree: $396,200
  • Bachelor’s degree: $1,224,400
  • Graduate or professional degree: $2,784,500

Comparison of Net Worth Between Education Levels

When comparing net worth between education levels, it’s clear that higher levels of education are associated with higher net worths. For example, individuals with a graduate or professional degree have over 20 times the average net worth of individuals with only a high school diploma. Similarly, individuals with a bachelor’s degree have nearly six times the average net worth of individuals with some college education but no degree.

Like age and race, net worth can vary significantly within each education level, and not all individuals with a particular level of education experience the same level of wealth or poverty. However, the overall trend of significant disparities in net worth between education levels highlights the importance of education as a key factor in wealth accumulation and economic success.

Efforts to improve access to education and reduce disparities in education outcomes can help address the root causes of the education-based wealth gap. Additionally, policies aimed at reducing income inequality and strengthening the social safety net can help ensure that all individuals have the opportunity to achieve economic success, regardless of their level of education.

Intersectionality of Age, Race, and Education

Intersectionality refers to how multiple aspects of an individual’s identity intersect and shape their experiences and outcomes. In the context of net worth, age, race, and education are three key factors that intersect to influence an individual’s financial position.

Age is a significant determinant of net worth, as older individuals tend to have accumulated more assets and have had more time to build wealth. However, race and education also play a role in shaping the relationship between age and net worth. For example, Black and Hispanic individuals tend to have lower net worth than White individuals at every age, even after controlling for factors such as income and education. Additionally, individuals with higher levels of education tend to have higher net worth than those with lower levels of education, regardless of their age or race.

The intersection of race and education also plays a critical role in determining net worth. For example, White individuals with a college degree have a median net worth of $398,000, compared to just $68,000 for Black individuals with the same level of education. Similarly, Hispanic individuals with a college degree have a median net worth of $117,000, compared to $398,000 for White individuals with the same level of education.

Final Thoughts

Our analysis found that different groups of people have vastly different amounts of money saved up. To help fix this, we can work on giving more opportunities for education and money to groups that have been left behind. We can also make taxes fairer and work to stop discrimination. We should also teach people more about money and how to save and invest. We need more research to understand why these differences exist, but it’s important to work towards a fairer world where everyone has a chance to build wealth.

Source data: You can find more information on the Survey of Consumer Finances and access the data here.

Featured Image Credit: BatkovaElena /Depositphotos.com.

This article originally appeared on Ash & Pri.

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Pri Kingston

Ash & Pri are the Founders of AshandPri.com and have spent the last decade building their way towards financial freedom and a lifetime of memories. Having successfully achieved their early retirement goal in under 10 years, they look forward to sharing their financial sense with like-minded people. Read more about Ash & Pri in the 'About Us' section.