Here's the Average Net Worth of Baby Boomers

When you're young, it's easy to imagine that your net worth will increase with age -- and sometimes, it does. However, that's not always the case. Job loss, serious health issues, and recessions can all play a role in how much you end up with in retirement.

Baby Boomers, long accused of having it too easy, have never been immune to tough times or financial losses. And as the youngest Boomers turn 62 this year, not all of them feel ready for retirement.

Image source: Getty Images.

Here, we take a look at how Boomers are faring after many decades of work.

Data source: Empower.

Difference between average net worth and median net worth

As you'll notice, the difference between average net worth and median net worth can be miles apart. That's because average net worth includes outliers, like the net worth of millionaires and billionaires. Median net worth tends to provide a better sense of what the typical individual's net worth looks like. If you're looking for "typical," median net worth is the number you want.

Why does net worth matter?

Simply put, net worth is an indicator of your financial health, which can help you get a better handle on how you manage your money. Your net worth need not match that of other people your age. Instead, it comes down to how many financial obligations you carry and how you hope to spend your golden years. If you're relatively debt-free, it's easier to live comfortably on a smaller net worth.

Whether you're still planning for retirement or you've been retired for years, net worth gives you an idea of how much you can safely spend without outliving your money.

How net worth is calculated

To calculate your net worth, add your assets.

Assets include:

• Cash, including bank accounts like checking, savings, money market accounts, holiday accounts, etc.
• Government bonds.
• CDs and savings bonds.
• Prepaid debit cards.
• Retirement accounts, including 401(k)s and IRAs.
• Health savings accounts (HSA)s.
• Investment accounts, including stocks and bonds, and mutual funds.
• Life insurance with cash value.
• Annuities with equity.
• Value of property, including cars, motorcycles, boats, and RVs.
• Value of real estate, including your primary residence, second home (if it applies), and rental property.
• Business ownership (equity in your business).

Next, add together any outstanding liabilities, including

Liabilities include:

• Mortgages
• Home equity loans
• Credit card balances
• Medical bills
• Installment loans, including auto loans, student loans, and personal loans

Once you've subtracted your liabilities from your assets, you have your financial net worth. However, it's not the only indicator. Everything -- from your health to where you live and how much debt you carry -- can also provide insight into how long your money will last. If you don't have enough time to build your net worth as much as you'd like before retirement, focus on ridding yourself of unnecessary debt.

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