While the super-rich 1% often dominate the financial news, the question most Americans have is how their net worth compares to that of their peers.
Knowing what the top 10% should be in your lifetime can provide valuable insight into your financial status and reveal milestones for success at various stages of life.
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The Net Worth Milestones
According to the latest data from the Federal Reserve’s 2022 Survey of Consumer Finances, to be among the wealthiest 10% of US households, you need a net worth of at least $1.94 million. This figure is the 90th percentile of net worth in all American families.
Net Worth by Age Group
The required net worth varies by age group, with older Americans generally having more time to accumulate wealth:
• 18-29: $281,550
• 30-39: $711,400
• 40-49: $1,313,700
• 50-59: $2,629,060
• 60-69: $3,007,400
• 70+: $2,862,000
Source of Wealth
The majority of wealth for the top 10% comes from investments in stocks, mutual funds, and home equity in primary homes.
Axios recently reported that the nation’s richest 10% own 93% of all household stock market wealth — a record high.
While high labor income is not the main driver, the top 10% tend to have incomes at least the 90th percentile nationally because of their advanced degrees and high-paying careers.
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Survey Frequency and Alternative Perspectives
The Federal Reserve Survey of Consumer Finances is conducted every three years, with the next survey scheduled for 2025. This triennial survey provides a comprehensive snapshot of American household finances, but it should be noted that other sources suggest the threshold is in the top 10. % may be higher. Different methodologies and data sets can lead to different estimates of wealth distribution.
Path to Build Wealth
While joining the top 10% may be out of reach for many, good financial habits like saving more than you spend, reducing debt, and investing wisely can help you increase your net worth over time. Home ownership, maximizing retirement accounts, and allowing compound interest to work are key strategies of prosperous households.
If you’re not already there, focus on consistent savings and investments. Consulting with a financial advisor can help you create a personal plan to increase your wealth. They can provide expert advice on asset allocation, tax strategies, and long-term planning to help you achieve your financial goals.
Ultimately, assessing financial progress by comparing net worth to peers in the same age group can provide a more accurate benchmark than simply looking at national wealth percentiles. With discipline and a long-term perspective, increasing your net worth and potentially joining the ranks of the nation’s wealthiest are achievable goals for many Americans.
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*This information is not financial advice, and personal guidance from a financial advisor is recommended to make an informed decision.
Jeannine Mancini has written about personal finance and investing for the past 13 years in a variety of publications including Zacks, The Nest, and eHow. They are not licensed financial advisors, and the content herein is for informational purposes only and does not, and does not constitute or purport to constitute, investment advice or investment services. While Mancini believes the information contained herein is reliable and comes from reliable sources, no representation, warranty, or promise, expressed or implied, is made as to the accuracy or completeness of the information.
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This article Are You Richer Than Your Peers? The Net Worth You Need To Be In The Top 10% Of Your Age originally appeared on Benzinga.com
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