What People in Their 40's Own, Owe, and Are Saving (And Where I Stand in Comparison)

Yes, I'm in my 40's -- now in my mid-40's versus early 40's -- which makes me one of the old men in blogging circles. Wow, how'd I end up here?

Anyway, this article on finances of people in their 40's really interested me, particularly some of the statistics she shared. I thought I'd list some of them here, comment on them, and see where I stack up versus the averages.

We'll start with net worth and debt numbers:

• Median net worth -- $117,800
• Median total debt -- $92,000

If you've read this blog for any amount of time, it will be no surprise to you that I'm well above the net worth number and well below the debt number. Why is this? Because I follow the principles I talk about here every day and I've done so for years. As a result, my net worth has grown at a fairly good clip and, since I'm an old guy, has done so for quite a while. Add those two together and you do fairly well. ;-)

Now for some scary stats:

• Negative net worth -- 7.5%
• Owe $10,000 or more on credit cards -- 10.7%
• No health insurance -- 18.7%
• Median value of retirement accounts -- $40,000

All I can say here is "yikes!"

Fortunately, these people still have 20 years or so to turn things around so they don't end up living a miserable existence during retirement. That said, 20 years isn't enough to save what they need for retirement unless they start saving a boatload or they can live off a small portion of their current income once they retire.

She gives three suggestions for these people:

• Make retirement savings your priority.
• Pay off those credit cards.
• Smart college strategies.

I'd have to agree. Sock all you can in retirement funds and get rid of debt -- especially consumer debt. If you can, save some for college. But if you can't, there are lots of other ways to deal with college costs -- many more options that how to handle retirement -- so don't sweat it. Do the first two and the third one will take care of itself.

Now, of course, that's only for those who are behind at the current time. The rest of us can do it all as long as we follow solid financial principles.