US household wealth has swelled during the pandemic as lockdowns have curbed spending and helped households save more than ever.
New data suggests that people over 50 may have benefited the mostAccording to the numbers you quoted USA Today.
The average net worth of families above this age is more than $1 million – but it can reach $1.8 million for those who have just reached formal retirement.
The numbers take into account home and 401(K) values that have been boosted by a hot real estate landscape and a strong stock market rally respectively.
Between 2019 and 2022, numbers from the Federal Survey of Consumer Finances show that the average American household saw its wealth increase by 37 percent. It is the largest height ever recorded.
But the new analysis from USA Today It reveals a troubling disparity between median and median household wealth in the United States.
US household wealth has swelled during the pandemic as lockdowns have curbed spending and helped households save more than ever. But the analysis shows a disparity between average wealth and median wealth
For example, while the average family in their 50s has $1 million, the average family in this group has only $300,000.
This is because averages tend to be skewed more by wealthier households, while the median – which effectively represents the middle value in a long list of data – tends to give a more accurate picture.
Here DailyMail.com breaks down the net worth of US households by demographic.
20-29
The median net worth of households between the ages of 20 and 24 is $120,896, but the median value is $10,800.
For those in their late 20s, the average net worth drops slightly to $120,185 although the average rises to $30,160.
Experts said families in this age group are disproportionately in debt.
said Maryland financial planner Liz Gillette USA TODAy: ‘You’re out on your own for the first time. You have upcoming obligations, like your first car, and your student loans. Then, you just build your way toward saving for retirement.
The average family’s wealth in their 50s is now more than $1 million, according to figures reported by USA Today
30-39
By the time families reach their 30s, their incomes and expenditures are rising – with many families choosing to start a family in this decade.
The median household net worth for 30- to 34-year-olds is $258,073, rising to $501,289 by the end of the decade.
However, the median wealth in these groups is $89,801 and $141,200, respectively.
40-49
According to figures cited by USA Today, a 40- to 44-year-old has a net home value of $590,718. This rises to $781,923 when it reaches $45-49.
The average net worths for these age groups are $134,730 and $212,800 each.
“People probably got married, bought a house, had kids,” said Peter Lazarov, a financial planner in St. Louis. This is what I would call full adulthood.
By this age, many families will notice that the value of their homes is also rising, increasing their wealth.
Many families in their 40s will benefit from an increase in the value of their homes, increasing their wealth. A recent study by CoreLogic showed where home prices are rising the fastest
50-59
This decade is when families see their wealth swell to seven figures. The median net worth for people ages 50 to 54 is $1,132,532, rising to $1,442,075 for those ages 55 to 59.
The median household net worth in their early 50s is $272,800, rising to $320,700 for those living in the latter half of the decade.
Experts said wealth in this group is mostly driven by compound interest earned on their 401(K).
Compound interest is when the interest you earn is reinvested on your savings thus earning more interest and allowing your money to grow.
“When you get to your 50s, most of what’s in your retirement account is compound interest,” Lazarov said.
60-69
Wealth tends to peak for households in their 60s because they benefit from decades of savings. Workers are likely to retire during this decade and are therefore just beginning to draw down their wealth.
Figures show that the average family in their early 60s has a net worth of $1,675,214. This rises to $1,836,884 for ages 65 to 69.
By comparison, the median household net worth for ages 60 to 64 is $394,010, rising to $394,300 by the end of that decade.
Wealth tends to peak for households in their 60s because they benefit from decades of savings
70-79
Wealth begins to decline once a family reaches their 70s, as many begin to rely on their retirement savings to live.
Data show that the median household net worth for those ages 70 to 74 is $1,714,085. This drops to $1,629,256 by the end of the decade.
By comparison, the median net worth for those in their early 70s if is $433,100, which drops to $341,300 for those ages 75 to 79.
“You’re in the spending phase, where you’re withdrawing from your 401(k) instead of building it,” Jonathan Swanberg, a certified financial planner from Houston, told USA Today.