Net Worth Goals by Age

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Wondering if you’re on track for a solid financial future? If you’re just stepping into adulthood, you may be worrying about your job and student loan debt, and not so much about your financial future. Fortunately, with a little planning, you can secure your tomorrow and live well today.

One good benchmark is your current net worth, which is roughly calculated by adding up all your cash and other assets and subtracting your debts. Don’t worry about keeping up with your buddies on this crucial number. Instead, learn the net worth targets you should hit at each age. The chart below breaks down net worth goals by age and percentages of income saved.

In Your 20s

Try not to worry too much about your current net worth when you’re just starting out—if you’re coming out of college with student loans, it may very well be negative.

Instead, focus on building your net worth. You should start as soon as you have your first job. Most companies offer a retirement savings plan, a 401(k) or 403(b). If you don’t have that type of retirement plan, you can save on your own with a Roth IRA. The beauty of these retirement accounts is that once your money is transferred from your paycheck and invested, it can grow and compound until you withdraw the funds at retirement. Your best bet is to set up an automatic transfer of at least 6 percent to 10 percent of your salary into your retirement account and invest it mostly in stocks.

Next, shoot for your first net worth target at age 30.

Net Worth at Age 30

By age 30 your goal is to have an amount equal to half your salary saved into your retirement account. So, if you’re making $60,000 in your 20s, strive for a $30,000 net worth by age 30. That milestone is possible through saving and investing. Let’s stay you start investing $3,466 each year ($288 per month) starting at age 23. If your investment account earns 7 percent annually, you’ll reach a $30,000 net worth by age 30.

If that sounds overwhelming, or you’re getting a late start with your career, don’t worry. These are savings guidelines, not rules etched in stone.

Net Worth at Age 40

By age 40, your goal is to have a net worth of two times your annual salary. So, if your salary edges up to $80,000 in your 30s, then by age 40 you should strive for a net worth of $160,000.

You can build your net worth in other ways, besides just contributing to your retirement accounts. Owning real estate is another path to growing your net worth. Like other types of financial assets, real estate values appreciate over time. Ultimately, the benefit of investing in real estate is that your small down payment grows exponentially, as the home value increases.

Net Worth at Age 50

By age 50, your goal is to have a net worth of 4 times your annual salary. If you’re earning $100,000 in your 40s, then your net worth target at age 50 is $400,000. This might sound like a lot, but by starting to save and invest early in adulthood, time will work its compounding magic. And if you start later, save more aggressively.

In your 40s, you might have children growing up and heading off to college. Don’t neglect your own retirement savings in favor of your children, who have a long life to earn on their own. Encourage your children to work and cover some of their own expenses. And if you’re falling behind in your money goals, then grab a side hustle to boost your income.

Net Worth at Age 60

By age 60, you’ll be on track with a net worth of 6 times your annual salary. If your salary is in the $100,000 to $160,000 range then multiply that amount by six, and that’s your net worth target.

At this point, your net worth benchmarks are dependent on what your retirement needs are going to be. Depending on where you live, and your lifestyle, those needs will vary. A common rule of thumb is to replace 85 percent of your working income in retirement. If your retirement dreams are grand and include exotic travel, you might need more.

Alternately, if you’re seeking a quiet retirement in an affordable community, then you’ll need less. Finally, if you want to retire earlier, then you’ll need a larger net worth than those seniors looking to work until they’re 70 or older.