Net Worth Goals by Age
How much wealth to have established in your 20s, 30s, 40s, and beyond.
Wondering if you’re on track for a solid financial future? If you’re just stepping into adulthood, you may be worried 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.
For reference, here's an in-depth breakdown of where you should aim to be when it comes to net worth goals by age and percentages of income to have 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 access to these types of retirement plans, 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 into your savings account, it can grow and compound until you withdraw the funds for retirement. Your best bet is to set up an automatic transfer of at least 6% of your salary into your retirement account.
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 stored in your retirement account. 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 say you start investing $3,466 each year ($288 per month), starting at age 23. If your investment account earns 7% 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.
Additionally, it's not just contributing to retirement that helps you build your net worth. You can increase that number in other ways, too. For instance, owning real estate is another path to growing your net worth. Similar to other types of financial assets, real estate values appreciate over the years. 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 four 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, try to 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. Instead, encourage your children to work and cover some of their own expenses. And if you’re falling behind on your money goals, try finding 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 six 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 15% of your pre-tax working income in retirement over the course of your life. If your retirement dreams are grand and include exotic travels, you might need more.
Alternately, if you’re seeking a quiet retirement in an affordable community, then you may need less. Finally, if you want to retire earlier, then you’ll need a larger net worth than those looking to work until they’re 70 or older.