 Tax season leaves many of us feeling a bit poorer. All the more welcome then was a little-noticed report issued in March showing that the combined net worth of U.S. households grew by 7% in 2006 to a record $55.6 trillion. (1)
To put this number in perspective, U.S. gross domestic product (GDP), the total amount of goods and services produced in the United States, was just over $13 trillion in 2006. (2) World GDP was an estimated $44.7 trillion (in U.S. dollars) in 2006. (3) Perhaps even more amazing is the fact that household net worth has doubled during the past 10 years. This means that we've added as much wealth since 1996 as we did during the nation's entire history up to that point. (4) To look at it another way, the average U.S. household has a net worth of $487,000, almost triple the 1985 average of $165,000 per household. (5) If your household net worth is somewhere around the national average, where does that put you in relation to your financial and retirement goals?
A survey released in March found that there are roughly three million individuals in the United States and Canada who have a net worth of more than $1 million, not including the value of their primary residences. (6) Another survey released in 2006 reported that 8.3 million U.S. households had more than $1 million in assets, in addition to the value of their residence. (7) Why all the rosy statistics about wealth? Two reasons: First, during the next two decades, more people will attempt to leave work and enter retirement than at any other time in history. With pensions becoming scarce and the future of Social Security in question, tomorrow's retirees will carry a much greater responsibility for their own financial independence than those who retired before them. In short, what must occur over the next 22 years has never been done before. Second, the growth of wealth in the world's industrial economies during the 20th century was also unprecedented. And the U.S. economy stands head and shoulders above any other industrial economy — past or present — in terms of accessibility to wealth and the opportunity to set and accomplish goals that citizens of other nations could only dream about. The bad news is that unless you are already retired or are among the handful of millionaires in this country, you are facing probably the largest financial challenge of your life. Even if you are already worth a million dollars or more, you may still have some distance to go before you can leave the workforce with enough assets to a fund a retirement that could last 20 to 30 years. The good news is that there has never been a better time or place to prepare for this challenge. 1, 4) Haver Analytics, 2007
Our Nation's Record Net Worth
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