How to Use This Calculator
To use this calculator, follow the steps below:
Select Your Age Group
The first step towards using the calculator is to select your age group from the top. This is because there are age considerations that should be taken into account; for example, a person in his 60s will have had much more time to become wealthy than a person in his 20s. You can better understand how you relate to others in your age group and thus more accurately determine your financial standing.
Enter Your Net Worth
Now, you have to put in your net worth in the box. To do this, simply add up the value of everything you own; Your bank accounts, retirement accounts, the value of your home, the value of your car, investments and anything else. Next, list all debts (including your mortgage, student loans, credit card debt, car loans, and any other debt) and their balances. The end result is your net worth.
What if you have a negative net worth?
You should also note that, if you owe more than you own your net worth could be a negative. For instance, having $250,000 of student loans and $30,000 in assets would result in a negative $220,000 net worth. Don't fear, the calculator can work with negative numbers — simply enter the minus sign and hit the enter key!
Understanding Your Results
After inputting your net worth, click on the calculate button to get your percentile. This number indicates the percentage of homes in the country that have less net worth than yours. Thus, a family in the 65th percentile will have a net worth that is greater than that of 65% of all families in the 65th percentile. Of the remaining 35%, 30% are worse off financially.
The results will display a large percentile at the top, followed by a sentence that provides an explanation of the percentile in English words. There will also be a progress bar that will indicate where you fit in along the broke/loaded continuum, and a graph with your spot highlighted. This graph may be slightly skewed because wealth inequality is a thing — that is, the distribution of net worth in America is not a perfect bell curve.
There will also be 3 reference cards that display your net worth, the median (50th percentile), and the 75th percentile mark. These are simple indicators to check that you are below average, average or above average without needing to do lots of mental arithmetic.
Why People Check Their Net Worth Percentile
So what is the purpose of looking at the net worth percentile all in the first place? Typically, it's curiosity, you want to know how you're doing in comparison to the rest of the world. Perhaps you have just paid off your student loans and are thinking, "now that I am free of student debt, am I 'ahead'?" Or perhaps you've received some inheritance and you are wondering what to do with your finances. In any case, it is only natural to want to find out just how you fare.
Retirement Planning Reality Check
Financial advisors talk about saving up to be 10 times your salary by 30, 3 times by 40, 6 times by 50 and so on. However, these are only guidelines — seeing how you actually rank can provide you with some context. You don't need to hit the numbers in the textbooks—if you're around the 70th percentile for your age, you're OK. With that said, simply being at a higher percentile doesn't mean you are ready for retirement — if the median individual in your age group is woefully underprepared, then you may fall short.
Understanding Wealth Gaps
Another option to really "see" wealth inequality are net worth percentile calculators. The difference from the 50th percentile to 90th percentile is enormous, and from 90th to 99th percentile is even more enormous. The median household (about $190,000 in net worth) has 10 times as much net worth as the 90th percentile household (about $1.9 million in net worth). That's nothing compared to the really rich.
Motivation or Depression
This information is understood differently by different people; some take this as "I'm in the 30th percentile, so I should start saving more," while others take it as "I'm in the 30th percentile, so I can't catch up, I need to save more. They're not wrong reactions, they're just different. The important thing is to use this information to make positive changes in your life.
What Net Worth Percentiles Really Tell You
Also keep in mind: net worth percentiles compare you to other households, not to determine whether you are financially healthy or can afford retirement. They don't even inform you whether you are making sound investments or not, just where you are in the distribution.
Why age brackets are so important
That's why age brackets are important; it really doesn't make sense to compare net worth across all ages to use for personal comparison. A 25-year-old college graduate with a net worth of $15,000 may be in the middle of the pack, but at the top of the pack in his or her age group. It's because older people have decades to repay their debts, build up their home equity, and increase their investments.
The Distribution Is Wild
American net worth distribution is quite bizarre — it's a long way from a normal bell curve. It is skewed right, that is, there is a tail of extremely rich people at the high end that are dragging up the average. The median net worth is much lower than the mean net worth because it is pulled up by a few very wealthy families. That's why percentiles are more useful than averages for wealth — $750,000 is an average, but it's not very meaningful for most people since it's swamped by billionaires.
What constitutes net worth?
To determine your net worth, remember that everything matters: your checking account, savings, retirement accounts, investment accounts, real estate equity, cars, valuable collections, business ownership stakes and everything else. Next, deduct all your debts, starting with your mortgage, student loans, credit card debt, car loans and any other loans.
Data Sources & References
- Board of Governors of the Federal Reserve System. (2023). Survey of Consumer Finances (SCF). https://www.federalreserve.gov/econres/scfindex.htm
- Bhutta, N., et al. (2020). Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances. Federal Reserve Bulletin, 106(5). https://www.federalreserve.gov/publications/files/scf20.pdf
- Kuhn, M., Schularick, M., & Steins, U. I. (2020). Income and Wealth Inequality in America, 1949–2016. Journal of Political Economy, 128(9). https://doi.org/10.1086/708815
- Pfeffer, F. T., & Waitkus, N. (2021). The Wealth Inequality Reader. Economic Policy Institute. https://www.epi.org/publication/wealth-inequality-reader/
- Saez, E., & Zucman, G. (2016). Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data. The Quarterly Journal of Economics, 131(2), 519-578. https://doi.org/10.1093/qje/qjw004