What is the average Australian net worth by age? This is difficult to succinctly answer, but there are a few numbers that can give some guidance.

Everybody has the unfortunate habit of wanting to compare themselves to a ‘baseline’ in order to define themselves.

This manifests itself in many ways, but in an age where we’re met with headlines prophesying doom and gloom, perhaps all we want is a bit of reassurance that we’re on the ‘right track’ (whatever that means to you).

One of the more pressing things that keeps us up at night is simply whether or not we have enough money. Whether we have enough assets in the bank to stay clothed and fed should everything go wrong at once.

But trying to figure out where the baseline is when it comes to something like net wealth is difficult to say the least.

First up, what does ‘net wealth’ even mean?


The baseline

Net wealth
At its surface, wealth is simply current assets minus current debts.

Current assets may be things like average holdings in superannuation, property, shares, cash, and even the furniture you have.

Current debt may be a student loan, a mortgage, or a personal loan you need to repay.

‘The median Australian’ and what they own

The Australian Bureau of Statistics estimated last month that the average Australian household had $441,649 in wealth per person. In total, Australia’s household wealth is $11.35 trillion – a figure which is actually higher than the $11.25 trillion recorded 12 months ago despite the COVID-19 pandemic.

If we take that as a baseline, we then need to know how old the ‘median Australian’ is.

Thanks to the most recent Australian census, we know that it is 38 years.

So it could be reasonably concluded that the average Australian – a 38 year old – has a net wealth of $441,649.

It’s a starting point at least, but what it is made up of?


Breaking down a 38 year old’s assets

Part of what makes Australians so wealthy (comparatively) is that we have a compulsory superannuation system.

According to research put out by Canstar, the average male at age 40 can expect a super fund balance of $56,792 while women in the same age bracket can expect a super balance of $46,075.

Let’s split the difference and cut it by 5 per cent to account for two years’ less super accumulation and say a 38-year-old’s average super balance is $48,862.

Take that away from the ABS’ estimate of $441,649 and you’re left with $392,787 to account for.

It’s hard to get an exact read on the average value of a 38-year-old’s household items and things like cars and fancy appliances, so let’s say for the sake of argument that all accounts to $50,000.

So we’re then left with $342,787 to account for.

Muddying the waters is the fact that Australians, by and large, are highly leveraged — with the average debt to income ratio about 190 per cent.

But, a large chunk of that debt is likely spent on mortgage payments — which are going towards generating net wealth rather than throwing away cash.

According to data from price comparison website Money.co.uk, the average Australian home buyer is 36 — although this is likely to be skewed to a higher age bracket in capital cities.

So it’s reasonable to assume our average 38-year-old has chewed into the loan somewhat but not substantially.

Nevertheless it would also be reasonable to assume that the 38-year-old has put some of their own money into the property, in the form of a deposit and that in those two years the property’s value has grown while the mortgage has not?

What’s more, does the 38-year-old have any other investments which may count towards net wealth?

Again, there are too many variables in play to make a reasonable and accurate assessment.

But we now have ‘some’ idea of what the average Australian net worth is and a starting point to make some projections.


The end point

Assuming the ABS is correct and average net wealth in Australia is $441,649, and the median Australian is 38 years old – that still doesn’t answer our original question: what should be your net worth right now?

If you’re 38 years old, this has already been answered for you. But what if you’re 20, 50, or 70 years old?

To find that out, we need to find the point where a person’s net wealth would be the highest it’s going to be — and it turns out that’s between 65 and 69 years old.


Why use the 65-69 age bracket?

While people can start drawing down on their superannuation between 55-60 (depending on when you were born) and the official start to the aged pension age is 67 — those ASFA stats indicate the highest level of superannuation people have is between 65-69 years old.

For 65-69 year old males it’s $384,539 and for women it’s $313,050. Average those, and you’re left with $348,795.

Note that this won’t be enough for a ‘comfortable’ retirement in the future — it’s just the figure right now.

We can also safely assume that if somebody is going to own a property and pay off the mortgage they have done so by the time they’re over 65 years old — so we can add the value of real estate into their net wealth.

The average price of a house in Australia in 2020 was $574,872 according to CoreLogic data.

Again, this is highly variable depending on where the property actually is (and when you read this).

If we then assume the value of somebody’s possessions at that age to be $50,000, we’re left with a grand total of $973,667.

Again, this doesn’t go into whether somebody has other assets such as shares — because statistics around an average person’s are difficult to find and almost impossible to compare because of the different asset classes people will hold.


The other end of the spectrum

Now we know the absolute average maximum net wealth and the average net wealth and what ages those are accrued — we need to figure out when we have the least net wealth.

Well, it’s technically when people are still living under their parents’ roofs, but for the sake of this scenario we’ll say it’s when somebody is 20 years old.

They may be out in the workforce, they still may be studying, or they may have completed their studies and have accrued student debt.

In either case, they haven’t had a lot of time to build wealth.

In fact, their wealth in most cases can simply be how much their belongings are worth.

We’re going to be generous here and assume the average 20-year-old has net wealth of $15,000.

So now we have a rough estimate on net wealth at 20 ($15,000), 40 ($441,649) and 70 ($973,666.5).

Then, it’s just a matter of filling in the blanks.

Remember: the figure at 70 years isn’t necessarily what you’ll need to be on track for a comfortable retirement, but a rough guess at the median net wealth of Australians by age.

So, what is the average Australian net worth by age? In short it’s virtually impossible to tell anyone’s but your own with certainty — but there are various ways to estimate.