As Canadians, we often consider ourselves to be financially savvy. We save for retirement, we invest in homes and we keep a close eye on our bank statements. But how does our net worth compare to others in our age group and around the world? And more importantly, how does it change as we age? In this article, we’re taking a look at the average net worth by age in Canada. Keep reading to find out where you stand.
Table of contents
- What is net worth?
- Average Net Worth by Age in Canada
- How to calculate your net worth
- What is a good net worth by age in Canada?
- How does net worth by age in Canada compare to similar countries?
- How to increase your net worth
- Key Takeaways
What is net worth?
Net worth is a general measure of financial health. It’s calculated by subtracting your total liabilities from your total assets. The grand total is how much you’re worth financially.
For example, if someone has a house worth $200,000 and a mortgage of $100,000, their net worth would be $100,000. Assuming the individual has no other assets or liabilities to consider.
This number can fluctuate from day to day, depending on factors like current investment portfolio and property valuations. But as a snapshot, net worth is a good indicator of whether you’re moving in the right direction financially. Generally speaking, you want your net worth to be rising steadily as you age.
The average net worth by age in Canada varies widely depending on factors such as region and profession. Overall, the average net worth tends to increase with age in Canada. This is due to the accumulation of assets such as property and investments, as well as paid-off mortgages and other debts.
Average Net Worth by Age in Canada
According to Statistics Canada, the average net worth by age in Canada varies significantly.
Canadians under 35 years old had a net worth of $48,800 on average. This number jumps to $243,400 for those between 35 and 44 years old. For those between 45 and 54 years of age, it reaches $521,100. The median net worth for those aged 55 to 64 is slightly higher at $690,000.
It is important to note that Statistics Canada used median instead of the average net worth, according to their most recent study. Although, the median and average are often close numerically. This means there is a significant range within each age group. Some individuals have a much higher or lower net worth compared to the average. With that being said, there is definitely an upward trend in net worth as age rises.
Age is just one factor that determines an individual’s net worth. Other factors such as job status, location, lifestyle, and family situation also play a role. However, this data provides a general overview of the average net worth by age in Canada.
Related Reading: Gross Income vs Net Income in Canada: What’s the Difference?
What is the average net worth of Canadian seniors?
According to Statistics Canada, the median net worth of seniors in Canada is $543,200. You’ll notice the net worth drops between the 55 to 64 and 65 plus range. This is likely due to seniors spending their net worth during retirement, which naturally depletes the total value. These figures take into account all kinds of assets that seniors may have – including their homes, savings, properties, and pensions.
These figures give us a snapshot of the average financial situation for seniors in Canada. Plus, they show that many seniors are actually doing quite well when it comes to their net worth. Half a million isn’t too shabby!
How to calculate your net worth
To calculate your net worth in Canada, you will need to add up the value of your assets and subtract the value of your liabilities. Your assets can include anything from your savings account to owned properties to investment portfolios. On the other hand, your liabilities can include anything from your mortgage to credit cards to lines of credit. To get an accurate picture of your net worth, be sure to include all debts that you are obligated to pay. Once you have added up your assets and subtracted your liabilities, you will be left with your net worth.
A simplified way to calculate your net worth is to use a net worth calculator. These calculators can be found online and will take into account things like taxation and interest when calculating your net worth. Simply input information about your assets and liabilities. Once you have inputted all of this information, the calculator will determine your net worth.
This number can be positive or negative and will give you a good indication of your financial health. If you have a positive net worth, it means your assets are worth more than your liabilities. On the other hand, if you have a negative net worth, it means you owe more money than you have in assets.
What is a good net worth by age in Canada?
A good net worth by age in Canada can vary depending on a number of factors, including income, lifestyle, and debt levels. The most important being lifestyle because how you live directly contributes to your accumulated net worth. In addition, financial goals can influence what is considered “good”. If you want to purchase real estate or retire early, achieving a higher net worth is essential.
A good benchmark is to compare your net worth to the average in your age group. If you’re close to the average, you’re probably doing well. If you’re lower, then you may need to reposition your finances with a budget to get back on track. Check out the table below for guidance.
|Age group||Median net worth (as of 2016)||Median net worth (as of 2019)|
|35 to 44||$232,600||$234,400|
|45 to 54||$457,700||$521,100|
|55 to 64||$709,200||$690,000|
|65 and older||$547,700||$543,200|
With all that said, anyone with a net worth of over $1 million should be considered rich in Canada. Per Statistics Canada, 764,033 people, or 2% of the population, have a net worth between $1 million and $5 million. While there is no definitive answer to what is considered high net worth in Canada, it is safe to say that anyone with a net worth in excess of $1 million can be considered wealthy.
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How does net worth by age in Canada compare to similar countries?
When it comes to net worth, Canada compares favorably to similar countries. For example, the median net worth for Canadians aged 35 to 44 is $234,400, while the corresponding figure for Americans is just $91,110. Canadians aged 55 to 64 have a median net worth of $690,000, compared to $213,150 for Americans in the same age group. Also, Canadians aged 65 and older have a median net worth of $543,200, compared to $266,070 for Americans in the same age group. In other words, Canadians enjoy a higher standard of living than Americans across all age groups, statistically speaking.
Numerous factors contribute to this difference. One is that Canada has a robust social safety net, which protects Canadians from financial insecurity in old age. In addition, Canadians do not have to worry about healthcare costs as much which can significantly set back net worth. Another is that Canada has low levels of income inequality, which means that Canadian families have more disposable income to save and invest. Canada is a great place to live if you want to build wealth over time.
To learn more about how you compare within your province, check out the below table. Unfortunately, Statistics Canada did not provide a breakdown of average net worths by territory.
|Province||Median net worth (as of 2019)|
|Newfoundland and Labrador||$247,300|
|Prince Edward Island||$211,400|
Related Reading: How much tax is deducted from my pay?
How to increase your net worth
Increasing your net worth can be a difficult task, but it’s definitely worth it in the long run. Challenges may arise when you attempt to spend less, earn more and rethink how you manage your money. There are a few key things you can do to help increase your net worth, as listed below.
Review your expenses and make changes where necessary
Track where you are spending your money (you can do this now with budgeting apps) and see if there are any areas where you can cut back. The less money you’re spending, the more you can save. By saving more, your net worth will increase.
Invest in yourself
One of the best ways to increase your net worth is to invest in yourself. This could mean taking courses or training to improve your skills, or simply making a commitment to learn something new every day. Not only will this make you more valuable to potential employers, but it will also give you a sense of satisfaction and accomplishment.
Invest in assets
Another excellent way to boost your net worth is to invest in assets such as property or stocks and shares. Over time, these assets typically increase in value, giving you a nice return on investment. Additionally, investing in assets can provide you with a passive income stream, which can further contribute to your overall financial health.
Make informed financial decisions
This means being mindful of both your short and long term goals and making choices that will help you achieve them. It also means being aware of the potential risks and rewards of each decision, and weighing them carefully before making a final choice. Of course, no one is perfect, and there is always some element of risk involved in any decision. However, by taking the time to consider all the potential outcomes, you can increase your chances of making decisions that will help you build wealth over time.
Live below your means
It’s important to remember that increasing your net worth is not about spending lavishly or buying things you don’t need. Living below your means is one of the smartest things you can do for your financial well-being. By restricting your spending and saving as much money as possible, you’ll be well on your way to boosting your net worth over time.
Reduce your debts
High-interest debt can eat away at your net worth, so it’s important to focus on paying down debt as quickly as possible. If you can, try to negotiate lower interest rates with your creditors, as well as favourable lending conditions.
Although there are some exceptions, the trend is clear. The older you get, the more wealth you accumulate. This might be due to several factors, including experience in the workforce and increased earning potential as you age. Whatever the reason, this information can help you plan your finances better. There are many ways to increase your net worth, including saving money, investing in assets, and increasing your income. Use this data as inspiration to work towards financial security for yourself and your loved ones.