What Is the Average American Net Worth?
Compare Your Wealth to That of the Average American
The average American net worth is $68,828. The data is from 2011 because the Census Bureau only measures it every 10 years.
Average net worth is defined as a measurement of wealth in the United States. Net worth is the total of your net assets. That's all the assets a household owns minus all the debt it owes. Net assets include home equity, which is your home's resale value minus mortgages and selling costs. Net assets also include an automobile's resale value minus its outstanding loan value.
Other assets include retirement accounts, savings, and cash. Other debt includes credit card debt, student loans, and medical debt. You can also include the resale value of household items, such as consumer electronics, jewelry, and art.
To calculate your personal net worth, add up the resale value of all your assets. Then add up all the debt you owe. Subtract the debt from the assets to find your net worth.
Average Household Net Worth
The U.S. Census Bureau measures the average net worth of all Americans. It uses the net worth of households instead of individuals. A household is any group of people that live together. The measurement occurs every 10 years as part of the U.S. Census Survey. The latest calculation is from 2011. The next one will be in 2021.
The Census Bureau uses the median for its measurement of household net worth. The median is the point where half of all households own more than and half own less than. It is more accurate than the mathematical average. That's where you take the total wealth of all U.S. households and divide it by the number of households.
The average is a much higher figure than the median. There are a few very wealthy households who own billions. Their wealth would make the average American household seem much wealthier than it is.
You might look at the median wealth of $68,828 and think, "I'm doing really well!" or "I'm way behind!" But net worth depends on age. Young people haven't had time to accumulate much wealth. Older households live on their wealth. You should compare your net worth to the median in your age bracket.
The median wealth of those younger than 35 is just $6,676. The median wealth for those older than 75 is $155,714. Here's the complete breakout by age group:
Another important factor in accumulating wealth is education. The median wealth of households without high school diplomas is only $9,800. A high school degree quadruples that to $43,945. A college degree triples that to $147,148. That's despite the burden of college debt. A graduate or professional degree doubles that the average net worth to $240,750. Education helps you accumulate wealth because you can get better-paying jobs.
The Difference Between Net Worth and Income
The U.S. government tends to define wealth by income, not net worth. For example, President Obama defined the middle class as households who make less than $250,000. That was during the debates over extension of the Bush tax cuts. During the fiscal cliff crisis, Congress said the middle class constitutes households making less than $450,000. President Trump's tax plan said middle-class couples earn between $75,000 and $225,000.
The median household income is $59,039. But that doesn't mean everyone who earns that is also in the middle of the wealth range. Many retired households have a high net worth, but low income. They had a high income earlier in their lives so they could save for retirement. Many younger families may have a high income but low net worth. Their income is immediately spent on child care, housing, and car payments.
It's probably a safe bet to assume that those living below the federal poverty level have a low net worth. Most people would sell off assets to sustain themselves before they reached the poverty level.
How the Nation's Wealth Is Distributed
The U.S. Census Bureau also reports median household wealth by quintiles. It's a good way to look at how wealth is distributed in America. A quintile is one-fifth of a group, just like a quartile is one-fourth of a group.
The bottom wealth quintile is the poorest fifth of households. The top wealth quintile is the richest 20 percent of households. As we've seen from the data so far, the bottom quintile will probably be younger households and those without much education. The top quintile will include older households and those with the most education.
In the United States, there is a huge difference between the bottom and top quintiles. The median net worth of the bottom quintile is -$6,029. That's right, their net worth is negative. If they sold everything they own to pay off their debt, they would still owe $6,029. Since it is a median, it means half of the households in this poorest 20 percent owe more than that and half owe less.
The median net worth of those in the richest quintile is $630,754. That affords them a lifestyle that is vastly different than the bottom quintile. They own three times as much as the next quintile, and 10 times as much as the middle group.
Here is the complete breakout by quintile:
|Quintile||Median Net Worth|
|Bottom 20 Percent||-$6,029|
|Next 20 Percent||$7,263|
|Middle 20 Percent||$68,828|
|Next 20 Percent||$205,985|
|Top 20 Percent||$630,754|
Trends in Household Wealth
During the 11 years between the last two Census wealth reports, U.S. median wealth fell. It was $73,874 in 2000, declining to $68,828 in 2011. But that wasn't because every quintile saw a loss. Instead, the rich got richer and the poor got poorer. Between 2000 and 2011, wealth increased for those in the top two quintiles, while it decreased for those in the bottom three.
|Quintile||Median Net Worth (2000)||Change by 2011|
The Federal Reserve has updated some of the Census wealth statistics. Its Surveys of Consumer Finance reported the top 1 percent of Americans now control 38.6 percent of the nation's wealth. They own more than the 36.3 percent in 2013. Everyone else saw their percentage of wealth fall. The wealthy benefited from the booming stock market. Most average workers don't benefit because they don't own large investment portfolios.
The rise in wealth inequality is a trend that is similar to that seen in income distributions. In 2000, 5.9 percent of households earned $200,000 a year or more. In 2016, 7 percent did. It's another indication of the growing income inequality in America. That's from Table A-1 in the Census Bureau's report called, “Income and Poverty in the United States: 2016.”
The 2016 Phoenix Wealth and Affluent Monitor found similar trends, although it divided wealth up differently. It reported 0.9 percent of U.S. households have more than $5 million in net worth. But, they own 24 percent of the nation's wealth. Five percent of the U.S. households own between $1 million and $4.9 million. They own 35 percent of the nation's wealth. The 25 percent of households who have a net worth between $100,000 and $999,999 own 32 percent of total wealth. The remaining 70 percent of households have a net worth of less than $100,000, and they own 9 percent of the total U.S. wealth.