How Do You Measure Up Financially?

MSN Money has a nifty interactive chart that shows median income, net worth and a bunch of other things by age.  It is built from the Federal Reserve’s Survey of Consumer finances (which is updated every three years).

Here’s a summary of that chart by age group with the somewhat generic advice that Money gives and a summary of what we did at that age.

Keep in mind that data this is all based on was collected before the Great Recession (2007 data which was released in 2009).  All numbers are based on medians.

It’s fun to see how you measure up on a variety of financial related items. Check out your current group and your prior ones to see how you fare.

Twenties

Annual salary $30,851
Net worth $6400
Percent owning home 27.2%
Total amount of debt (believe it or not, you have less debt than the rest of the age groups) $19,600
Percent with kids at home 43%

What Money thinks you should be doing: Live as cheaply as you can; get health insurance; shovel money into your retirement plans – which they think should be 80% invested in stocks; pay off debt strategically (credit card first, student loans after, etc); work on getting good credit scores.

What we did: We started our family – two kids, with one income – and that was US Army pay of $2000 a year for 2 years of the decade. We didn’t buy a house, we used credit cards for gasoline, but paid off the balance each month. We didn’t put anything into retirement funds, we weren’t able to save more than we spent each year – so our networth was pretty much the clothes on our backs and whatever equity we had in our cars. We felt poor, but we didn’t have a negative net worth.

Thirties
Annual salary $54,503
Net worth $51,200
Percent owning home 63.7%
Total amount of debt $110,600
Percent with kids at home 71.7%

What Money thinks you should do: Keep your expenses in check; build an emergency fund;pay off credit card balances; don’t take on too much other debt – like mortgages and car loans; continue to save for retirement.

What we did: We bought a starter house in a somewhat declined neighborhood. We bought a new car and a new truck (on loans) at different points in the decade. I worked part time while hubby continued to work full time. We did keep expenses in check. We did continue to pay off credit card balances. Hubby contributed to his pension fund, and we did save to put the kids through college. At the end of the decade, I opened an in home day care facility to earn money to go back to school to get a programming degree.  And we still felt poor.

Forties
Annual salary $60,673
Net worth $133,100
Percent owning home 70.5%
Total amount of debt $99,800
Percent with kids at home 62.5%

What Money thinks you should do: Save for retirement; pay off credit card balances; don’t tip your boat paying for the kid’s college expenses.

What we did: I went back to school, earned a degree and got a programming job. We became a two income family. We moved to a more expensive home and bought two new vehicles (cash). We continued to save for the kid’s college, put money into hubby’s pension fund and we started to contribute to my employers 401K retirement fund. We continued to pay off debt and built our net worth. I changed jobs twice, getting a nice salary bump each time. We paid off our house with the money that we saved to send the kids to college, then used half of my salary to pay for college expenses and invested the other half. Our net worth continued to increase. We did our estate planning with a lawyer/accountant.  We didn’t feel as poor, but we didn’t feel rich either.

Fifties
Annual salary $63,768
Net worth $229,300
Percent owning home 79.7%
Total amount of debt (believe it or not, you have less debt than the rest of the age groups) $85,260
Percent with kids at home 44.7%

What Money thinks you should do: Reconsider your career – but don’t just jump ship and take on debt to go back to college to re-train; make retirement savings your top priority; get on track to pay off all debt (including mortgage) before retiring; kick your kids out of the nest – stop supporting them if they have left home; review all insurance to see what you still need or need now; get serious about health checkups and join AARP.

What we did: We sent two kids through college; continued to work and live on hubby’s (lessor) salary; invested 100% of my salary in strategically allocated investments; stayed in our house; kept our two older cars; continued to always pay off credit card balances; did not take on any new loans; worked hard and received bonus’s and promotions with salary increases at work. We bought a vacation rental (cash). Our kids graduated, moved out and became self-sufficient. We added an umbrella liability insurance policy as well as insurance on the condo. We discontinued a term life policy we each had, but hubby kept a whole life policy. Hubby retired at the end of his fifties decade and started drawing his pension. I kept working.  We had money coming in faster than we could shove it out.  We felt rather well off.

Sixties
Annual salary $47,305
Net worth $256,300
Percent owning home 84.3%
Total amount of debt $85,260
Percent with kids at home 17%

What Money thinks you should do: figure out retirement – what date will you retire, where will you live, draw up a plan – considering an immediate annuity, withdrawal rate from your funds, social security and pension amounts; think about long term care insurance; plan out your medical insurance and costs; get rid of all debt; review your estate plans.

What we are doing: I joined hubby in retirement after building up a large cash reserve – to carry us for several years since we would draw any social security for 3 years and wouldn’t touch retirement funds until required to do so at 70 ½. We did do a lot of reviews and what if’s prior to my retirement, and we continue to watch our expenses closely and make sure that we pay off credit card balances each month. We continue to gift our family annually and are reviewing our estate plans with our adult children and their spouses. We are debt free. Our net worth would continue to rise, if the darned stock market would behave! We are moving our investment allocation to contain more tax free mutual bonds and include more global or international holding. We are considering additional real estate investments.  We still feel fairly well off, but are guarding our nest egg very carefully.

So – how do you measure up?  Did you do well in your earlier decades?

Sources:
http://money.msn.com/saving-money/compare-finances-by-age.aspx
http://money.msn.com/retirement-plan/your-20s-planning-pays-off-richly-weston.aspx
http://money.msn.com/retirement-plan/money-in-your-40s-it-is-make-or-break-weston.aspx
http://money.msn.com/retirement-plan/money-in-your-50s-8-moves-to-make-weston.aspx
http://money.msn.com/retirement-plan/money-in-your-60s-12-steps-to-take-weston.aspx