The Average Person's Net Worth In Their 50s

In the simplest terms, your net worth is a calculation of your assets versus liabilities, and is a fair indication of your total financial health. As such, it's probably always a good idea to occasionally gauge how your net worth stacks up to others in your age group. The calculation is determined by adding up all of your assets — property, investments, savings, vehicles — and then subtracting that from your liabilities — credit cards, mortgage balances, student loans, for example.

Beyond knowing where you're at financially, your net worth can also open you up to a world of opportunities like hedge funds or other investment vehicles for high-net-worth-individuals (HNWIs). For instance, individuals or couples with a combined $1 million net worth are considered accredited investors by the U.S. Securities and Exchange Commission; this gives them access to investing in shares of unregistered private companies, like startups.

There are two types of net worth, both negative and positive net worth. You'll want to be in the positive territory since that means your assets far exceed your liabilities. Negative net worth means exactly the opposite, and you probably need to get your financial house in order while you still can. Obviously, the further along you are in age, and closer you are to retirement, the more important a positive net worth will become. That said, anyone 50 years of age or older should be paying close attention to their net worth as retirement age creeps ever closer. Here's what you should know.

Per a 2024 study by Charles Schwab, as of 2023, the average American believes they need $1.8 million to retire comfortably, with the expectation that those funds will last 23 years past their 65th birthday. Before going into what the average 50 year old's net worth should be, you have to first understand the difference between national median and the national average mean net worth. The national average net worth is derived by adding up a total set amount of numbers and dividing those numbers by an accepted data point. The median considers all these numbers from lowest to highest as well as the distribution of income across the population, and attempts to calculate a midpoint that's a more accurate reflection of the average.

According to Empower, the average net worth of individuals in their 50s is $1,370,503, while the median is $289,095. This vast difference gives you an idea of how wide the national average can be from reality, which can be impacted by the wealthiest households' inclusion in the national average, which artificially inflates the true number. Another way to figure out how you're doing is to calculate whether your current net worth is at least four times your annual income. However, even looking at the national average, it's obvious that the number falls almost $500,000 short of what the average American believes they'll need to retire comfortably.

If you're falling short of expectations after comparing your net worth at 50 years of age or older to the median or national average, then it's time to eliminate your credit card debt, the balance on your mortgage, and as much household debt as you can. For instance, by opting to make an additional mortgage payment on your principal every year, you can effectively knock four to six years off your mortgage. This paves the way for you to put more money into investments and savings, and is why paying off your mortgage at this age is your biggest financial goal, especially if you're in negative net worth. Also, consider paying off debt in order of highest to lowest interest first.

You can also take the opportunity at age 50 to make catch-up contributions of up to $7,500 on your 401(k) and $1,000 to your IRA. Maxing out your retirement accounts is key. You can better save and invest by applying for automatic deposits to your accounts with each pay every month, which takes the pressure of having to do it manually off of you. Finally, do away with the extra expenses in your life you don't really need. Get rid of subscriptions you aren't using, consider more staycations, and eat out less. That's money you're going to need for your retirement.