The average net worth of a 70 year old American is around $1 million. However, there is significant variation in net worth among this age group. Here is a closer look at the net worth distribution of Americans aged 70 and over.
Key Statistics
- The median net worth of a 70+ year old American is $266,400 (Federal Reserve, 2019)
- The average net worth is $1,066,000 (Federal Reserve, 2019)
- The top 10% of 70+ year olds have an average net worth of $3.9 million (Federal Reserve, 2019)
- The bottom 25% of 70+ year olds have an average net worth of $59,800 or less (Federal Reserve, 2019)
As the numbers show, there is a huge range in net worth at age 70+. While the average is over $1 million, most seniors do not reach that high. The median, a better measure of the “typical” net worth, is only $266,400. At the same time, the top 10% skew the average upwards with multimillion dollar net worths.
Net Worth Distribution of 70+ Year Old Americans
| Net Worth Percentile | Average Net Worth |
|---|---|
| Top 10% | $3,899,300 |
| 50th-90th percentile | $1,059,800 |
| 25th-49th percentile | $266,400 |
| Bottom 25% | $59,800 |
This table breaks down average net worth by percentiles. It shows how skewed the distribution is, with the top 10% averaging close to $4 million while the bottom 25% average less than $60,000.
Net Worth Composition
What makes up the net worth of seniors? Here is the composition of average net worth for 70+ year olds:
- Primary residence: 27%
- Other real estate: 13%
- Retirement accounts: 33%
- Financial securities: 12%
- Business equity: 7%
- Other assets: 8%
Retirement accounts like 401(k)s and IRAs make up the largest share at 33%. Primary residence equity accounts for another 27%. The remainder is made up of other real estate, securities, business ownership, and other assets.
How Seniors Build Net Worth
Seniors accumulate net worth over decades through:
- Savings – Consistent savings through retirement accounts and other investments.
- Home equity – Appreciation in primary home value.
- Inheritances – Receiving money/assets from parents or spouses.
- Business ownership – Equity built in a business.
The keys are starting early, investing regularly, buying real estate, and building up assets. Business owners also accumulate net worth from their enterprise value.
The Impact of Retirement
Retirement has a major impact on net worth trends. Before retirement, net worth steadily increases through accumulation of assets. After retiring, net worth typically declines as seniors spend down assets to fund retirement.
Research shows the average retirement nest egg is enough to last less than 10 years. So most seniors eventually draw down much of their net worth in retirement.
Geographic Differences
There are also major geographic differences in senior net worth. Here are average net worth figures by region for 70+ households:
| Region | Average Net Worth |
|---|---|
| Northeast | $1,198,200 |
| Midwest | $1,024,200 |
| South | $919,300 |
| West | $1,009,100 |
Seniors in the Northeast have the highest average net worth at nearly $1.2 million. The South lags at just over $900,000 on average. Real estate values and cost of living play a role in these regional divides.
The Millionaire Next Door
While the average 70 year old has over $1 million in net worth, the distribution varies widely. Most seniors are not actually millionaires. The keys to building wealth are:
- Starting to save early and consistently
- Investing in assets with growth potential
- Owning real estate, especially in desirable areas
- Living below your means
Millionaire seniors tend to share these traits. While luck plays a role, diligent saving and investing over decades is the most reliable path to accumulating a seven-figure net worth by retirement.
Conclusion
The average 70 year old American has a net worth around $1 million. However, there is significant inequality, with the median closer to $260,000 and the top 10% averaging nearly $4 million. Retirement accounts, home equity, and business ownership are major components. Achieving millionaire status typically requires diligently saving and investing over decades, as well as owning real estate. While luck and circumstances play a role, building substantial net worth by age 70 is within reach for many Americans who start early and develop wise financial habits.