The average American is said to be a millionaire with a six-figure income, but these numbers can be misleading.
The Federal Reserve’s Survey of Consumer Finances (SCF) is conducted every three years to gather detailed information about the financial conditions of American households. The report examines how income, asset ownership, debt burden, and net worth vary among different groups of people.
The latest SCF took place in 2022 and was released in October 2023. The report discovered that the typical income for U.S. families was $141,390, and their average net worth was $1.06 million. Continue reading to find out how different age groups are affected, and discover the benefits of investing in an S&P 500 index fund for growing your wealth.
Average Income Among American Households
The chart below shows the average income (before taxes) of American households based on the age of the reference person. The reference person is defined as the male in mixed-sex couples and the older individual in same-sex couples.
| AGE GROUP | AVERAGE INCOME |
|---|---|
| 18-34 |
$82,660 |
| 35-44 |
$168,720 |
| 45-54 |
$170,840 |
| 55-64 |
$175,440 |
| 65-74 |
$141,700 |
| 75+ |
$107,820 |
| All Households | $141,390 |
Also Read: Disclosing All About Purchase CEMA Guide for 2024
Average Net Worth Among American Households
The chart below shows the average net worth (assets minus debts) of American households based on the age of the main person. Just to clarify, assets can be divided into two categories: financial assets (like bank accounts, retirement accounts, and investment accounts) and nonfinancial assets (such as vehicles and real estate). Similarly, liabilities include all types of debt.
| AGE GROUP | AVERAGE NET WORTH |
|---|---|
| 18-34 |
$183,380 |
| 35-44 |
$548,070 |
| 45-54 |
$971,270 |
| 55-64 |
$1.56 million |
| 65-74 |
$1.78 million |
| 75+ |
$1.62 million |
| All Households | $1.06 million |
Median Income and Net Worth Among American Households
It may surprise some readers to learn that the average American has a net worth of one million dollars and earns a six-figure income. However, there is an important limitation to consider when looking at those large numbers. Averages can be misleading when dealing with asymmetrical data, which means data sets that have values that are not evenly distributed.
Income and net worth are examples of asymmetrical data. According to the Federal Reserve Bank of St. Louis, the richest 10% of American households own 66.9% of all household wealth. The average values mentioned earlier are higher because of a small portion of the population.
The median, which is the middle value, is often more helpful when working with data that is not symmetrical. The chart below displays the average income and total worth of American households, categorized by the age of the main person in each household.
| AGE GROUP | MEDIAN INCOME | MEDIAN NET WORTH |
|---|---|---|
| 18-34 |
$60,530 |
$39,040 |
| 35-44 |
$86,470 |
$135,300 |
| 45-54 |
$91,880 |
$246,700 |
| 55-64 |
$82,150 |
$364,270 |
| 65-74 |
$60,530 |
$410,000 |
| 75+ |
$49,070 |
$334,700 |
| All Households | $70,260 | $192,700 |
The chart displays the 2022 SCF’s median income, which is $70,260. This means that half of the households reported an income lower than this amount, while the other half reported an income higher than this amount. Similarly, the 2022 SCF found that the middle value of net worth was $192,700. This means that half of the households had less wealth and half had more wealth.
Leave a Reply