Additional Coverage:
- Here’s the Average Net Worth of American Boomers (How Do You Compare?) (financebuzz.com)
How Do Your Retirement Savings Stack Up? A Look at Baby Boomer Net Worth
For those born between 1946 and 1964, the “baby boomer” generation, retirement is likely a significant topic of discussion and planning. Whether you’re eyeing an early exit from the workforce or anticipate working into your 70s, regularly assessing your retirement readiness is crucial. Understanding the financial landscape of your peers can provide a valuable benchmark as you plan for your golden years.
This article delves into the average and median net worth of baby boomers, offering insights into how you compare and actionable steps to boost your financial standing before retirement.
What’s the Average Baby Boomer Net Worth?
As of 2026, the youngest baby boomers are in their early 60s, while the oldest are approaching their late 70s. The Federal Reserve, a key source for data on American net worth, categorizes financial information by decade rather than by generation. Following this approach, here’s a breakdown of the mean (average) net worth for baby boomers:
- Ages 55 to 64: $1,564,070
- Ages 65 to 74: $1,780,720
- Age 75 and older: $1,620,100
Median Net Worth: A More Representative View
It’s important to remember that averages can be skewed by a few exceptionally high earners. The median, representing the middle number in a data set, often provides a more accurate picture of the typical financial situation. Here’s the median net worth for the same age groups:
- Ages 55 to 64: $364,270
- Ages 65 to 74: $410,000
- Age 75 and older: $334,700
Understanding Net Worth
Your net worth is a straightforward calculation: total assets minus total liabilities (debts).
Assets encompass a wide range of holdings, including:
- Real estate
- Life insurance policies
- Checking and savings accounts
- Investment accounts
- Vehicles
- Business equity
- Other financial assets
Liabilities include various forms of debt, such as:
- Credit card debt
- Mortgage payments
- Car loans
- Student loan debt
- Home equity loans
- Any other outstanding debt
How Do You Measure Up?
If your net worth falls below the averages for your age group, don’t panic. Remember that these are just numbers, and individual circumstances vary greatly. Whether you’re an older boomer already enjoying retirement or a younger boomer with more than a decade left in your career, there’s still time to enhance your financial worth.
Key Strategies to Boost Your Net Worth Before Retirement:
1. Maximize Your Employer’s 401(k) Match: Many employers offer to match a percentage of employee contributions to investment accounts.
Review your company’s policies or speak with HR to determine if this benefit is available to you. Employer contributions are a fantastic way to boost your savings and don’t count toward your annual contribution limit.
2. Align Your Investment Portfolio with Your Age: As you age, your investment strategy should generally become more conservative to protect your retirement savings from market volatility. Regularly review your portfolio and consider reallocating assets that carry higher risk than appropriate for your stage of life.
3. Consider Downsizing Sooner Rather Than Later: You don’t need to wait until retirement to downsize.
Selling unneeded possessions or moving to a smaller, more affordable living space now can reduce expenses and free up more money for savings. For remote workers, relocating to a lower-cost area could significantly impact your overall expenses, from housing to groceries.
4. Plan for Medicare Enrollment: You become eligible for Medicare at age 65.
Be aware that lifelong penalties can apply for signing up late. If you still have employer-sponsored health insurance, you can submit a waiver with proof of coverage.
Otherwise, enroll early to take advantage of government-sponsored healthcare.
5. Strategize Your Social Security Benefits: While you can begin collecting Social Security benefits as early as age 62, waiting can be a more advantageous financial move.
Taking benefits before your full retirement age will result in a permanently reduced benefit check. Conversely, delaying collection past your full retirement age can lead to a slightly higher check due to delayed retirement credits.
6. Prioritize Catch-Up Contributions: The IRS allows individuals aged 50 and older to contribute an additional amount to their investment savings accounts annually.
For 2026, this “catch-up contribution” is an extra $8,000, bringing the yearly maximum to $31,500. Take full advantage of this opportunity to supercharge your savings.
7. Explore a Side Gig: While budgeting and downsizing are effective, an additional income stream can rapidly increase your net worth. Even a small side hustle, like selling crafts online, can accumulate significant funds over time, especially if you direct those earnings into a high-yield savings account or IRA.
8. Consult a Financial Planner: For personalized guidance on building your net worth, consider scheduling an appointment with a qualified financial planner. They can help you assess your current financial standing, analyze your finances, and recommend tailored strategies to help you reach your retirement goals.
The Bottom Line
A fulfilling and stress-free retirement involves more than just finances. Factors like living near family, pursuing personal interests, and prioritizing health are equally important.
However, having sufficient funds to maintain your desired lifestyle can significantly enhance your retirement experience. By proactively building your net worth, you’re investing in huge lifestyle dividends for the long run.
Read More About This Story:
- Here’s the Average Net Worth of American Boomers (How Do You Compare?) (financebuzz.com)