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Westend61 \/ Getty Images<\/p>\n
There’s so much to plan for when you’re between the ages of 45 and 54\u2014retirement isn’t exactly around the corner, but you’re getting closer. <\/p>\n
The median net worth of Americans 45\u201354 is $246,700, according to the Federal Reserve’s latest data.<\/p>\n
Wealth gaps in this age group reflect salaries, inheritances, home equity, spending habits, and investment size.<\/p>\n
To grow wealth before retirement, focus on maximizing earnings, managing spending, and investing through tax-advantaged accounts.<\/p>\n<\/p>\n
Americans between 45 and 54 have a median net worth<\/a> of $246,700, according to the Federal Reserve\u2019s Survey of Consumer Finances. “Median” is a middle-of-the-road number that means that half of people in this age group have more than this number, and half of people have less.<\/p>\n The median provides a more accurate picture of a “typical” value than the average, which tends to be skewed by outliers with extremely high and low net worths.<\/p>\n “Net worth,” simply put, is your assets (such as your home value and stocks) minus your debts (such as mortgages<\/a> and student loans<\/a>). According to the Federal Reserve (the Fed), net worth typically climbs until your mid-70s.<\/p>\n The Fed also found that Americans between the ages of 45 and 54 have a median net worth that\u2019s 82% higher than 35- to 44-year-olds. What\u2019s driving that increase? According to the Fed, it’s the growing value of assets<\/a>, since Americans between the ages of 45 and 54 carry similar debt to Americans who are a decade younger, the Fed found.<\/p>\n The differentiator is the value of things they own, with investment portfolios and equity<\/a> in real estate<\/a> making the biggest contributions to their net worth. At this point in life, earnings tend to peak, more mortgage payments have been made, and retirement<\/a> is approaching, making investing for it a serious priority.<\/p>\n Comparing your net worth to others in your age group is a useful way to assess your financial health. Understanding how you measure up can help you identify gaps, set meaningful goals, and track your progress over time.<\/p>\n The wealthiest people on paper who in this group are often benefiting from one, some, or all of the following:<\/p>\n On the other side of the scale, some people may have received less financial support from family, experienced a string of bad luck, or perhaps aren’t careful money managers. Factors that could be dragging down their net worth might include:<\/p>\n Heavy debt burdens, including mortgages, student loans, credit cards<\/a>, and supporting children or aging parents<\/p>\n Under-saving for retirement<\/a><\/p>\n Renting or having a mortgage in an area where property prices are stagnating<\/p>\n High medical bills<\/a><\/p>\n Working in industries prone to layoffs or low wages<\/p>\n If you\u2019re between 45 and 54, retirement suddenly isn\u2019t so far away, and adequately saving for it by investing in the stock market through tax-advantaged<\/a> workplace plans should become a bigger priority. (If you’re a freelancer<\/a> or are self-employed<\/a>, you have options to save for retirement, too.)<\/p>\n Check your net worth once a year\u2014or every three or six months\u2014to see how your finances evolve. Keeping tabs on how your net worth figure changes can help you stay focused and motivated.<\/p>\n How do you go about strengthening your finances? Mainly by earning as much as you can and reining in spending so you have the funds to:<\/p>\n Pay down debt<\/a>, prioritizing higher-interest debts (like credit cards) first<\/p>\n Build a solid emergency fund<\/a>, if you haven\u2019t already<\/p>\n Funnel excess income into money-growing opportunities, starting with maximizing your contributions to 401(k)s<\/a> or IRAs<\/a> and investing in well-diversified funds that prioritize growth, balance risk, and charge low fees<\/p>\n All of this, of course, can be easier said than done. For many families, it\u2019s hard to focus beyond the present. Boosting net worth and increasing your chances of being able to comfortably retire at a reasonable age can require a great deal of discipline and motivation.<\/p>\n \u201cSaving without motivation leads to boredom,\u201d says Derrick Kinney, a financial advisor. “The key is to write down what you want to retire to, not just what you\u2019re retiring from. That\u2019s like setting your GPS for money success. If there\u2019s one thing to do now, it\u2019s this: stop defining yourself by the title on your business card and start seeing yourself as a paid problem-solver. The more valuable the problems you solve, the more your income and net worth can grow.\u201d<\/p>\n <\/p>\n