Net Worth: How do you stack up?

[LivingAlmostLarge]

Snave, gotta agree. At 25 things were dismal as well for us. We probably had a $10k net worth. But things got better fast.

I don't think many here post their actual net worth, just commenting on the statistics.

By the way, as a single parent why are you paying for college? The kid should be getting tons of free rides and grants! Anyone under $60k family income at Harvard gets a free ride.

[stressedmama]

Just a thought... another thing bringing the 25 - 34 category down in the net worth column would be that a lot of people buy their first house during this time of their life. So, many people probably are in the first 5 years or so of their mortgage and their equity is very small compared to what they still owe.

[Snave]

I was shocked too!! How do people ever expect to retire? My net worth is 6 1/2 times the average for my age. ( I used my husband's age and then my age but there was very little difference) The average person my age only has a net worth of $244,000!!

Ima, $150,000 of that $244,000 is probably tied up in their homes also. That means most have even less in liquid assets for retirement.

[LivingAlmostLarge]

But that's why I asked how many older people are using pensions to live on like my mom with very little liquid cash saved? She basically has nothing saved liquid, but gets a very generous pension, will get a very generous SS and has a paid for home.

[Snave]

That will work for those that are older and are already drawing from a pension, etc... But that doesn't explain the lack of savings on everyone elses part. Take a look at the numbers for those in their thirties, fourties and fifties. A lot of these folks have little savings and will NOT get a pension.

[DebbieL]

My parents are what livingalmostlarge describes. Actually, my dad makes more now in retirement than he did working. Their house has been paid off completely for 30 years. My dad retired about 17 years ago (and my mom about 7 years ago). Actually they both have good pensions (especially my dad’s). Here in Canada you also get old age pension (everyone gets this whether they worked or not – it’s usually around $500 a month, but they give you extra if you’re poor) and Canada Pension Plan (our version of social security – although our payments are capped at around $800 a month and that’s only if you made enough money and contributed the maximum into it). Between all their pensions and the fact that they haven’t had a mortgage (and have never been in debt for anything else) for 30 years, they do very well. They don’t need a huge bank account. They probably have between 40-50K in the bank at any time (just because they don’t spend a lot of money day to day). I’m guessing they net between $5-6K monthly. Actually, my dad said putting money in an RRSP (our version of 401K type thing) was a really bad move for him. When he had to start withdrawing it (they make you do so by a certain age here) he was at a higher tax rate than when he put it in. Retirement savings vehicles like that often aren’t a good idea for people who have good pensions from their work (which is obviously not as many people nowadays).

[disneysteve]

My mom is 77 and lives just fine on SS and investment income - no pension. In fact, since selling her house last year and moving to an apartment, her savings are actually growing. By selling the house, she dropped her monthly expenses by about $700 (taxes, utilties, maintenance, etc.) and her rent and electric at the apartment is less than that. Plus, the proceeds from selling the house are invested (conservatively - CDs and MMA) and generating income. So she has a positive cash flow and an increasing net worth. Not bad for a 77 year old.

[Snave]

My mom is 77 and lives just fine on SS and investment income - no pension. In fact, since selling her house last year and moving to an apartment, her savings are actually growing. By selling the house, she dropped her monthly expenses by about $700 (taxes, utilties, maintenance, etc.) and her rent and electric at the apartment is less than that. Plus, the proceeds from selling the house are invested (conservatively - CDs and MMA) and generating income. So she has a positive cash flow. Not bad for a 77 year old.

So in this case, the house was an asset. I know a lot of other posts lately have been discussing homes being assets or liabilities.

[gamecock43]

Maybe in the beginning houses are liabilities and then they become an asset the longer you own.
In the beginning you are stretching yourself to make payments, and make repairs, but as the years go on you come to anticipate repairs that will be needed, and save for those. Later on you can refinance, and your house would have increased in value as well.

[LivingAlmostLarge]

Exactly my parents draw more retired than working. They had little 401k or IRA savings but mostly pensions. Very, very generous pensions.

[Snave]

Maybe in the beginning houses are liabilities and then they become an asset the longer you own.
In the beginning you are stretching yourself to make payments, and make repairs, but as the years go on you come to anticipate repairs that will be needed, and save for those. Later on you can refinance, and your house would have increased in value as well.

I do agree with this some. Obvioulsy if you just bought a house and don't have much equity, it probably looks more like a liability. However, if you build up equity over time (such as the case of disneysteve's mom) or put a lot down on the house originally it probably falls more towards asset.