Decades ago, you might never have thought to assess your net worth. But once you reach your sixties, that number can tell you a lot about your retirement readiness.
If you’re considering retirement, you might also feel curious about how your own net worth measures against others in their sixties. Thanks to new data from Personal Capital, we actually have some idea about the average net worth.
The good news is that people in their sixties have, on average, higher net worth than people in any other decade of their lives. So the time that you’re considering retirement is likely to be the most affluent of your lifetime.
How is net worth calculated? Net worth is essentially the sum of your total assets, minus your debts. The resulting number represents your accumulated monetary worth from sources like investments, real estate, and cash on hand.
What is the average net worth of someone in their sixties? According to the data compiled by Personal Capital, the average net worth of a person in their sixties is 1,726,840. However, because that number could be skewed upward by the inclusion of just a few very wealthy people within the study group, it might be more helpful to look at the median net worth instead. That number is a still-healthy 549,872.
Why is net worth important? Boiled down to the simplest of terms, your net worth determines the lifestyle you can expect to live. If you feel that yours is too low, waiting a bit longer to retire can often be a wise choice.
How can you preserve your net worth? Once you do retire, you will draw income from sources such as Social Security, savings, any investments, and your retirement fund. Now your focus will switch from accumulating wealth to preserving it as long as possible.
We can help you accomplish this goal by combining a smart budget with a wise, diversified investment strategy. Some retirees switch from a focus on stocks to investing in bonds, which can be more stable over the long run. And of course, you need a solid emergency fund so that you never feel forced to take on expensive debts in retirement.
Consult with us regularly before you retire and then after, so that we can help you first accumulate your net worth and then manage it wisely in retirement.