What Should My Net Worth Be At Each Stage of Life?

By on October 26, 2021

Giving yourself net worth goals throughout your life is a helpful way to ensure your finances are on track for your retirement and life goals. Here are some average net worth targets by age, as well as tips on how to create a financial plan that’s based on turning your goals into reality.

What should my net worth be?

Creating a personal finance goal for your net worth is a helpful way to analyze whether you’re on track for retirement. As you build your wealth, you should look at all of your assets to help you make financial decisions, like whether or not to buy a second home or how to pay for your kids’ college tuition. Working with a financial advisor is the best way to create a personalized estimate based on your actual needs and desires.

There are also a couple of basic formulas that you can use to get a general idea of how to set a target net worth for different stages of life. Plug your own numbers into these equations to see if your current net worth is on track. Doing so can provide a general sense of how prepared you may or may not be for retirement, along with your other financial goals in life.

Salary multiples

One method for targeting net worth by age is using salary multiples to create an average net worth goal for each decade. This process is primarily geared towards retirement planning rather than holistic life goals. Additionally, you can choose whether to only include your retirement accounts, or add in other assets as well, like your home equity.

With those caveats in mind, here’s how the salary multiple equation works for your personal finance goals. For each decade, your target net worth should be a specific multiple of your salary for that year or time frame. The younger you are, the lower the multiple will be. As you age and earn more, that multiple grows. This is possible if you continue to save the same percentage of your income as your salary increases, plus you should benefit from compound earnings on your investments over the decades.

What should your personal net worth be at each stage using this method?

By the end of your 20s, your net worth goal would be just 0.5X to 1X your salary. So if you averaged a $60,000 salary, your personal net worth goal by age 30 would be between $30,000 and $60,000.

Throughout your 30s, your total net worth goal should be around 2X your salary. That’s not your starting salary from your 20s, but your average salary over that decade.

By the time you hit 40, your net worth target using this method would be 2X to 3X your current annual salary. In your mid-40s, that number should grow to 3X to 3.5X your salary. This allows you to have a positive net worth that supports a growing savings account for retirement. You’ll notice that these numbers start to get more aggressive as you get older and earn more.

At age 50, your target net worth should be 4X to 5X your average salary. If you earn $400,000 a year at this point, then your future net worth according to this formula should be $1.6 million to $2 million.

By age 60, bump your target net worth to 6X to 8X your salary. And by your target retirement age, your net worth goal with this method would be 10X your ending salary. If you end your career earning $750,000 a year, then your net worth goal for retirement would be $7.5 million.

Annual spending multiples

Another method for estimating what your net worth should be at different ages is using spending multiples instead of income multiples. As you get older and earn more, you’ll spend more as well. This can be a good guide for making sure your net worth is keeping up with “lifestyle inflation.”

Let’s start by fast forwarding to the end target. By retirement age, the goal is to have a net worth of 16X to 20X your annual spending. With that in mind, you can set spending multiplier goals for each decade, such as:

  • 1X spending by age 30
  • 2X spending by age 35
  • 4X spending by age 40
  • 8X spending by age 50
  • 12X spending by age 60
  • 28X spending by age 67

Remember, you’re not necessarily actively saving that amount each year. This is about how much your total net worth should reach in order to keep up with the same level of spending in retirement. There are a lot of variables this method does not account for, like paying off your mortgage by the time you retire or spending less because your children are grown and out of the house.

What to include in your net worth calculation

Calculating your net worth is really quite simple. It’s also important to note that a lot of net worth estimates focus heavily on retirement accounts. However, you’re likely to have a diverse range of assets (and rightly so) that add to your net worth.


All of your investments count towards your net worth, not just your retirement accounts. Be sure to add every account and fund you own, even if they’re not tax-advantaged. Also include any restricted stock or stock options that are part of your executive compensation package.

Tangible assets

Tangible assets, including real estate and personal property also add to your net worth. Real estate includes your primary residence as well as any vacation or rental homes. Land and commercial property holdings also count. Just remember to include mortgages as a liability before calculating your final net worth.

Personal property includes vehicles, boats, artwork, jewelry, and any other items that hold value. They may not be liquid, but still count towards your net worth.

Intangible assets

Intangible assets include things like intellectual property, patents, or trademarks. A professional appraisal or valuation can be helpful in getting an accurate sense of the value of these assets.

Business value

As a business owner, you may include the value of your business as part of your net worth, especially if a sale or acquisition is part of your exit strategy. Like intangible assets, a professional valuation is the best way to find out the market value of your company. This may also be a good investment of your time and money because the valuation process often reveals opportunities to make your business more attractive to prospective buyers. By doing this well in advance of your target retirement, you have time to implement any professional recommendations.

Factors impacting your net worth goals

At Dowling and Yahnke Wealth Advisors, we take a holistic approach to managing your wealth. While using pre-set formulas to create net worth targets is a starting point, it’s not at all personalized and doesn’t take into account the nuances and stress testing of a comprehensive financial plan. That’s why we recommend working with your wealth advisor to consider all of the variables that go into preparing for retirement. We also emphasize creating a vision for your life goals. Growing your net worth just for the sake of seeing a specific number on a balance sheet is not the same as financially preparing yourself to achieve the big things you want in life.

That being said, here are some of the variables we take into account when helping clients create their long-term wealth goals.

Retirement age

Some people are happy to plan on working until they’re in their mid to late 60s, while others hope for an early retirement. Whatever your goal may be, it will influence your target net worth and the cash you have in your savings account. The longer you wait, the more time your investments have to grow. Plus, a higher net worth may give you more financial freedom.

Your D&Y wealth advisor can help you estimate a target retirement age. Then as you get closer to making that actual decision, your team will run multiple scenarios to see what your financial situation looks like at different retirement ages.

Retirement lifestyle

Not all retirements look the same. What do you imagine your retirement to look like? Do you plan on maintaining a large home so all of your extended family can visit? Or do you anticipate reducing some of your living expenses by downsizing? Will you also travel? Your wealth advisor should lead you through a series of questions to help you create a retirement plan that starts with your vision, then a wealth strategy for making it come true.

Bottom line

The ideal net worth for your age depends on a wide variety of factors.  Not one single formula works for every person. That’s why it’s so important to have a strong financial planning team on your side to help you make the best financial decisions.

Your Dowling & Yahnke team collaborates with you to create a financial plan to help you towards your long-term goals. We’re here to help you bring your vision to life, whatever it may be.

Get started with Dowling & Yahnke Wealth Advisors today.


Erik H. Nelson, CFP®, CPWA®, Promoted to Director of Financial...

Read Now


Read Now
Suburban townhomes California

California Senate Bill 9 (SB 9): Converting Single Family Lots...

Read Now


Discover the people who make Dowling & Yahnke one of San Diego’s top wealth management firm.



Our team is available now to discuss all of your financial goals.