“How Much Should I Have Saved At This Point?”
I was recently asked, “How much should I have saved at this point?” And to be honest, I didn’t have a simple answer. The truth is, the amount someone “should have” varies depending on both your needs today and what you’ll need down the road. When people ask this, I often think they’re really wondering, “How much do others have saved at this point?”
To get a better perspective, I turned to the Federal Reserve’s most recent Survey of Consumer Finances (2022). This survey offers a detailed look at family net worth over time. But before diving into the numbers, let's quickly review what Net Worth means: it's simply Assets – Liabilities. For example, if you have $100,000 in assets but owe $40,000 in debt, your net worth is $60,000. It's worth noting that net worth is always in flux—it’s like a snapshot of your financial picture at a given moment.
Understanding the Numbers
Before we get into the figures below, it's important to keep in mind that the survey includes a broad spectrum of households—from those below the poverty line to those well above it. This naturally leads to a big gap between the median and average figures, which might surprise you.
The median represents the typical family, meaning half have more, half have less.
The average, on the other hand, can be skewed by very wealthy households, which pull the number up.
Also, remember that being above or below these numbers doesn’t mean you’re financially “ahead” or “behind.” For instance, you could have an above-average net worth, but if your spending is set to deplete your assets in a few years, that’s not a good position. On the flip side, if you don’t have much in the way of assets but have a steady pension and Social Security that comfortably cover your expenses, you could be in great financial shape.
Family Net Worth by Age
Here’s a breakdown of net worth by age group from the survey:
Less than 35 years old:
Median: $39,000
Average: $183,400
Age 35 – 44:
Median: $135,300
Average: $548,100
Age 45 – 54:
Median: $246,700
Average: $971,300
Age 55 – 64:
Median: $364,300
Average: $1,564,100
Age 65 – 74:
Median: $410,000
Average: $1,780,700
Age 75+:
Median: $334,700
Average: $1,620,100
Key Considerations
Real Estate:
Real estate plays a major role in growing net worth over time. Real estate is typically a large asset that’s tied to relatively low-interest debt. Even modest appreciation combined with paying down debt can result in a significant boost to your net worth over the years. The catch, though, is that this asset isn’t liquid—meaning unless you’re willing to sell your home or take out another loan, you can’t easily “spend” your equity.
Student Loans:
For younger generations and some parents, student loans are a major obstacle to wealth-building. For those under 35, net worth tends to be relatively low (with a median of $39,000), partly due to high levels of student loan debt. Unlike a mortgage, student loans aren’t tied to an asset, which makes it harder for younger generations to build wealth early on. If possible, consider paying off student loans sooner rather than later to free up funds that could be used for investing and growing your net worth.
Life Expectancy:
According to the CDC’s 2021 Life Tables, life expectancy for newborns is around 74.8 years for males and 80.2 for females. But if you were 65 years old in 2021, you can expect to live until about 82 if you’re male, and 84.7 if you’re female. This is an important consideration for retirement planning—retiring at 65 could mean your savings need to last for 15-20 more years!
If these numbers have you thinking about your financial future, I’m happy to talk through your thoughts and help you figure out what makes sense for your situation.
Kanso Capital LLC is an Investment Advisor registered with the State of Washington. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions. Please contact us at 425-503-0265 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions. Additionally, we recommend you compare any account reports from Kanso Capital with the account statements from your Custodian. Please notify us if you do not receive statements from your Custodian on at least a quarterly basis. Our current disclosure brochure, Form ADV Part 2, is available for your review upon request, and on our website, www.KansoCapital.com. This disclosure brochure, or a summary of material changes made, is also provided to our clients on an annual basis.