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Net Worth By Age Is Meaningless

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Net Worth By AgeNet Worth By Age charts are mere entertainment at best and misleading at worst.

Check out this CNN Money charting tool in which you enter in your age and your annual salary and it calculates some fun facts and figures. It takes your age and gives you what the median net worth figure is for each age group; it also takes your salary and gives you what the media net worth figure is for each age group. And with two numbers, you’re expected to figure out if you’re doing well, doing poorly, or just plain doing. Except you can’t.

There are simply too many variables.

Take someone who is between 25 and 34 and think of all the life changes that occur in that time period. If you didn’t go to college, you’ve probably been working for at least half a decade by the time you turn 25. Someone who did go to college likely will be a couple years into their first job by the time they hit 25. Can you compare the two? Can you honestly compare that against the median of $2,125? What if you’re 25, married and have two kids? What if you’re 25, not married, don’t have kids… is it even fair to compare the financial situation of the two 25 year olds? No way. Age is the least significant part of that equation.

What about salary? $50,000 annual salary means you should have a net worth of around $109,975. Well if a 25 year old’s net worth is around $2,125 and a $50,000 annual salaried person’s net worth is around $109,975… which is it? Which number is one supposed to believe? I know that at my first employer, someone with a bachelor’s degree in engineering could command a $50,000 salary in 2003. That person was likely younger than 25, so should they have around $2,125 or $109,975 in net worth?

If you play with these tools and find yourself ahead, that’s great. If you play with these tools and find yourself behind, you might consider it a shot across the bow if you have no extenuating or mitigating circumstances. Chances are you don’t fit into the cookie cutter scenarios so don’t get too high or low on yourself.

Net worth by age tables are fun, but take them with a ton of salt. 🙂

What do you think of these surveys and tools? Useful? Deceptive?

{ 20 comments, please add your thoughts now! }

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20 Responses to “Net Worth By Age Is Meaningless”

  1. jay says:

    I tried it and remain mystified… I’m not stupid (!!) but I couldn’t really work out what it meant and how the ‘result’ related to the graph – looks to me like they divided my income by my age – what does that prove??
    What about assets? What about outgoings? What about liabilities such as credit card debt and loans?
    I am working towards being debt free before I have a go at paying off my mortgage early – I consider myself better off than someone who earns more than me but hasn’t appreciated the ‘cost’ of their spending

  2. This comment is right on the money. The problem with most statistics is that they are mostly limited to a couple of variables.

  3. FinanceFixer says:

    I just did this for the first time yesterday and was not pleased with the results – thanks for the encouragement!

  4. philip says:

    I saw this the other day and got a good laugh from it. I am very close to your example that I am engineering graduate that just started working. I am somewhere in between the $2k and $109k so I am in the correct range I guess.

  5. Pinyo says:

    i like these tools, but mainly for its entertainment value. 🙂

  6. Ken says:

    I hate these net worth calculators. They are never right.

    Me age 25, salary $75,000
    Net Worth by age $2,125
    Net Worth by salary $244,100
    Actual net worth $53,000

    If I were to try and hit the net worth by salary money that means i would have to of saved every penny i earned since college and payed no taxes, and i would still be short.

    Net worth by age, I save that per month between 401k, IRA and cash.

    • Asad says:

      No Ken,
      You missed the point here. (Net worth by salary would mean that people who are making as much as you do which is 75K have a net worth of $244,100. Do keep in mind that they might be working for a long time probably much longer than you). So be happy and proud of yourself that you are making much more that most people did. I do believe though that the number seem too low to be true but cant comment on that.

  7. Ken says:

    Also i enjoy this a little more.

    It lets you compare by more than just age and salary. Although not too much more categories. But at least you can see other peoples whole situation.

  8. Toby Ludwick says:


    I agree that the CNN Money tool is confusing and doesn’t make much sense.

    Net Worth IQ looks a little biased because those who put up the numbers there (see their profile stats) are mostly highly educated professionals.

    A couple weeks ago, the following blog showed a net worth distribution chart by age group:

    According to that chart, for you who’s 25, you’re at the top 25% of the age group 20-29.

    Age is not the single criteria for such a comparison but it’s a fact that we like to compare us with those who are as old as us, right? For instance, we compare us with friends, peers, or co-workers around us, whether they’re married or have kids.

  9. Lord says:

    I agree that one is a lost cause. What difference does it make how well you are doing relative to others if they are all doing badly? What you want to know is if you are making your goals. A much more relevant one would consider your age, retirement age, income, wealth, savings rate, the replacement rate needed in retirement, expected return, and tell you if your savings rate is too low, your retirement age is too low, etc. Those are hard to judge if young, but will at least put some perspective on them.

  10. Jay says:

    It’s a shame when a company as respected as CNN puts something as shoddy as this net worth calculator out. If you’ve never seen or used tools like these, it makes them seem completely worthless. Even worse, if you’re gullible enough to put any stock in the results, it can be very misleading and make you think you’re doing much better (or much worse) regarding retirement planning than you actually are.

    I agree with you, Jim, this tool is crap, but your post brings up an important topic. Can you find great retirement planning, budget & debt management, and portfolio tools on the internet? Yes, you definitely can. Stick with well known sites like Morningstar. Their reputation is based on their planning/investing tools and you can count on high quality products. My personal favorite is the Portfolio X-Ray, you will know SO much more about how your goals match your actual behavior after you put your portfolio through this tool.

    Unfortunately a lot of investing research sites charge a monthly subscription fee for their high-octane products, but I recently found out that you can get free access to just about any of these tools if you happen to sign up for the right online brokerage. For example, Ameritrade bought in all of the Morningstar products so you can use the portfolio X-Ray for free if your one of their clients, no need to pay Morningstar a monthly subscription.

    Online brokerages are probably one of the best ways to get free access to powerful budgeting, planning and investing tools, because most sites maintain an amazing variety to attract new investors. Even better, if you can’t figure out how to use any of the tools, there are always customer service reps (who are usually brokers or planners) available to teach you whatever you care to learn as long as you’re a client. Free stuff is cool. (-:


  11. Meg says:

    Guys, it’s not a calculator. It is a graphical illustration of the median net worth – you can look at it by age, or by income. The only thing that changes with your inputs is which column they highlight to show you where you fall.

    That said, I find it exactly as helpful as it’s meant to be. If you’re interested to know the median net worth of people your age – or in your income bracket – then this chart tells you that.

    I find it interesting that the numbers are as high as they are. HALF of all people 55-64 have more than $200K in net worth. And HALF of all people under 25 have more than $600 in net worth. To listen to the media you’d think the median net worth for that age group is way negative because of credit card debt and student loans.

  12. kitty says:

    My problem with these chartsis that they take each parameter – in this case age and income – separately. A more interesting number would be a function of both income and age – people of this age with these income i.e. f(age,income). But they way they do it, and the way a similar table they had before did it, was to give you f(age) and f(income).

    49, current income – low 6 digits
    net worth by age: 109K — but this includes 49 year olds with very low income
    net worth by income 363K – but this includes young people who are just starting high paying jobs with tons of student loan debt

    My real net worth is considerably higher than either of these numbers, but I’d imagine if they were to look only at 49 year olds earning 100K-something, the number would be much closer.

    Also salary isn’t a constant. People get raises, change jobs, etc. Someone earning 40K one year and 100K the next isn’t likely to have the same net worth as someone who earned 100K for many years.

    CNN money also had once a table which listed net worth by various categories – age, education, profession, etc. But again, they also gave median net worth for each parameter separately. I came out ahead in all categories, but I suspect if they only looked at these parameters together, this may not have been the case.

  13. getagrip says:

    Networth comparisions to others can be used to help motivate you or think of areas in general you may want to adjust, but really, they’re only practical use is to give you a snapshot of how you’re doing today. Take enough snapshots and you can trend how you’ve been doing over the years. To me their best use is not in comparing yourself to others, but to allow you to see your own progress over time, where you’re succeeding, where you need to do better, and how things that may have happened in your life have affected it. Sometimes we get bogged down in the weeds and need to step back and look at the bigger picture, and they’re one way to do that. They’re just another tool in the financial tool kit.

  14. Reg says:

    The problem is that 94.8% of all statistics are completely made up. 😉 wink wink

  15. James says:

    Me: 25
    Net worth: $115,000
    I’m doing aight! Keep cool my babies.

  16. Patrick says:

    Me: 25
    Net worth: $115,001

  17. James Patrick says:

    Me: 50
    Networth: $230,001


  18. Jeff Haw says:

    25 Yr
    NW: ~450k (dependant on stock market and housing flux)

  19. racecarguy1111 says:

    The net worth by age takes into account ONLY your age. When you add income to the estimate, the calculator provides a net worth figure based on both inputs, since net worth correlates well with BOTH age and income. The calculator is limited in what information it provides, but hopefully it will wake some people up to the fact that they need to start thinking about, and taking control of, their finances.

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