While the ultra-rich 1% often dominates financial headlines, the real question for most Americans is whether their wealth compares to that of their peers.
Understanding what it takes to be in the top 10% at your age can give you valuable insight into your financial position and reveal the milestones for success at different stages of life.
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The net worth milestone
According to the latest data from the Federal Reserve’s 2022 Survey of Consumer Finances, to be in the richest 10% of U.S. households, you need a net worth of at least $1.94 million. This figure represents the 90th percentile of net worth for all American families.
Net worth by age group
Net worth requirements vary significantly 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
Sources of wealth
Most of the wealth of the top 10% comes from investments in shares, mutual funds and home equity in their primary residence.
Axios recently reported that the country’s richest 10% control about 93% of all household stock market wealth – an all-time high.
While high labor incomes are not the main driver, the top 10% nationally typically have incomes in at least the 90th percentile, thanks to advanced degrees and high-paying careers.
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Survey frequency and alternative perspectives
The Federal Reserve’s Survey of Consumer Finances is conducted every three years, with the next survey scheduled for 2025. This triennial survey provides a comprehensive snapshot of U.S. household finances, but it’s worth noting that other sources suggest the threshold for being in the top 10 is. % may be higher. Different methodologies and data sets can lead to different estimates of the wealth distribution.
The Road to Building Wealth
While joining the top 10% may seem out of reach for many, healthy financial habits such as saving more than you spend, reducing debt, and investing wisely can help you grow your wealth over time. Homeownership, maximizing retirement accounts and making compound interest work are the main strategies affluent households use.
If you’re not there yet, focus on saving and investing consistently. By consulting a financial advisor, you can create a personalized plan to grow your wealth. They can provide you with expert advice on asset allocation, tax strategies and long-term planning to help you achieve your financial goals.
Ultimately, assessing your financial progress by comparing your net worth to peers in the same age group can provide a more accurate benchmark than just looking at national wealth percentiles. With discipline and a long-term perspective, increasing your net worth and potentially becoming among the wealthiest in the country is an achievable goal for many Americans.
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*This information is not financial advice and personal guidance from a financial advisor is recommended to make informed decisions.
Jeannine Mancini has written about personal finance and investing for the past thirteen years in various publications, including Zacks, The Nest, and eHow. She is not a qualified financial advisor and the contents of this document are for informational purposes only and do not and do not constitute investment advice or any investment service. Although Mancini believes that the information contained herein is reliable and from reliable sources, no representation, warranty or undertaking, express 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 Needed to Be in the Top 10% of Your Age originally appeared on Benzinga.com
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