Net Worth in Your 60s: What to Expect & How to Plan for Retirement

Your net worth might peak in your 60s, and that's a good thing.

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Key points

• By the time you reach your 60s, you may have a substantial net worth.
• It's good to get a handle on that number before you enter retirement.

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When you're in your 20s or 30s, your net worth may not be something you're so fixated on. And let's face it -- that number may also not be much to write home about.

But once you reach your 60s, your financial picture will, ideally, look very different. In fact, your 60s are a great time to assess your net worth and figure out what options it gives you within the context of retirement. 

Now the good news is that people in their 60s tend to have a higher net worth than people in any other decade, according to recent data from Personal Capital. And if you're curious as to how your net worth stacks up, here's what you need to know.

How to calculate net worth

Your net worth is calculated by taking your total assets and subtracting your total debts. Now by the time you reach your 60s, you may not have any debts. Your mortgage might be paid off, and your credit card balance may be $0. 

So, let's say you have no debt and have the following assets:

• A home worth $500,000 you own outright
• An IRA with a $600,000 balance
• A savings account with a $100,000 balance

All told, that gives you a net worth of $1.2 million.

What does net worth look like for people in their 60s?

The average net worth among 60-somethings is a rather impressive $1,726,840. But the median net worth for that age group is a much lower, albeit respectable, sum -- $549,872.

Now the reason for this discrepancy likely boils down to a few very wealthy individuals whose net worth was taken into account when running these numbers. If even a handful of people surveyed by Personal Capital had a net worth upward of $5 million, it may have skewed the average upward. So in this case, what that median $549,872 tells us is that way more 60-somethings have a lower net worth than the average, as opposed to a higher one. 

Why is net worth important for 60-somethings?

The net worth you have in your 60s could be indicative of the retirement lifestyle you'll be able to lead. Simply put, the higher your net worth, the more financial security you can look forward to. And if you're not happy with your net worth by the time you reach your 60s, you may want to consider delaying retirement until you've managed to build more savings or accumulate more assets. 

How to preserve your net worth

If you're in your 60s, you may be on the cusp of retirement. And once you enter retirement, your goal should really be to preserve your wealth so your money lasts as long as possible. 

A good way to do that is to stick to a carefully thought-out budget once your paychecks from a job stop rolling in. At the same time, make sure to invest appropriately for your age. You don't have to dump all of your stocks once you retire, but it's smart to keep a large chunk of your portfolio out of stocks.

The reason? Once you're retired, you might routinely cash out investments to cover your living costs. Stocks can be very volatile, and cashing out when they're down could mean locking in expensive losses. Bonds, which are safer, tend to see their value fluctuate less frequently, so it's wise to move a chunk of your assets over to bonds once you stop working.

It's also important to have a solid emergency fund to tap during retirement. But whereas workers are often advised to sock away enough money to cover three to six months of living expenses, retirees should keep one to two years' worth of expenses in their savings accounts. 

Will your net worth shrink in time?

It might, and that's actually normal. Prior to retirement, your goal should be to accumulate wealth. Once you're no longer working, you're in wealth preservation mode -- but your assets might get spent down eventually. That's not a bad thing as long as you do so slowly and steadily. 

Personal Capital reports that the average net worth among 70-somethings is $1,654,164. For those in their 80s, it's $1,555,550. And for people in their 90s, it's $1,397,572. This tells us that net worth actually tends to peak for people in their 60s. But the reality is that if you manage to reach your 90s with over $1 million to your name, you're probably in great financial shape.