Skip to Navigation Skip to Main Content

Scott Burns: Latest scoreboard shows little change in two years

OK, alpha dogs, want to know where you stand in the wealth heap?

Welcome to the Wealth Scoreboard, my effort to provide some notion of where we stand relative to everyone else.

Since I started this more than 10 years ago, readers have asked every year for an update. Unfortunately, this kind of information isn’t like the national debt. We’re never more than a click away from up-to-the-minute data on how much money the world has lent to our debt-ridden government. Data for the Wealth Scoreboard is a little harder to come by.

It is gathered with a survey, the Survey of Consumer Finances, which is done every three years by the Federal Reserve. The first time we get to see any of the survey results is at least a year after the survey is completed. This can be awkward. Few of us felt, in early 2009, that the pre-crash survey from 2007 was very relevant. The world had changed. Home prices had crashed. Stock market prices were way down. Basically, we were more worried about the end-of-life-as-we-know-it than whether we had a posh stateroom on the good ship Lollipop.

But this time is different. Data from 2010 is a pretty good reflection of how things are in 2012. According to another source, the Federal Reserve flow of funds data, the collective net worth of all American households was little changed in early 2012 from 2010. Some individuals may have become vastly wealthier (think Mark Zuckerberg, however briefly). Others may have become much poorer (think about the thousands who have gone through foreclosure). But in the big, big picture, we’re collectively a tad better off than we were two years ago.

The Wealth Scoreboard is a bit different from other measures of wealth. Rather than just identify the kind of wealth one needs to be in the top 1 percent or some other level, this measure divides us into wealth groups by age. You can thank the research department at the Dallas Federal Reserve Bank for doing the heavy lifting.

When it comes to net worth, a little age discrimination is only fair. Young people haven’t had time to accumulate wealth. Older people have had decades. To be in the top 10 percent of your age group in your 20s, for instance, you need only to have a net worth of $83,000. You’ll need more than 20 times as much, a handsome $1,955,000, to be in the top 10 percent if you are in your 60s.

Another thing to notice is that whatever your wealth level, it peaks in the same decade of life — our 60s. The top 1 percent enjoy a peak wealth of nearly $11.7 million in their 60s, while those in the top 1 percent in their 80s have a net worth of about $5.9 million. Ditto, those in the top 25 percent: Their wealth peaks at $712,000 in their 60s and falls to $514,000 in their 80s.

It’s not the same for lesser wealth levels. At the 50th percentile, net worth remains pretty much unchanged over the three decades from the 60s through the 70s and 80s. The likely explanation is that the truly wealthy, having achieved financial security, are more inclined to transfer their wealth to children and grandchildren — or give it to charity — as they age. Why? Because they aren’t worried about things like long-term-care expenses. Running out of money isn’t a big preoccupation.

Another thing to notice: Each step up the net worth ladder requires a lot more wealth. In your 40s, $70,000 can put you at the 50th percentile for wealth — that would be some home equity, cars, and a few years’ participation in a well-matched 401(k) program. Get married, stay healthy, keep working at a good job, and being in the top half is pretty much a slam-dunk.

But to move into the top 25 percent at the same age, you’ll need to have about $260,000, nearly four times as much. And it will take almost $500,000 more to advance another 15 percentile to the top 10 percent. Want to move from the top 10 percent to the top 5 percent? You’ll need to double your wealth to $1.4 million.

And how about getting into the much-reviled top 1 percent? Fuggetaboutit. That will take $5.8 million if you are in your 40s, nearly $10 million in your 50s and $11.6 million in your 60s. Those are big numbers. While many people can get into the top 10 percent through high wages as employees, diligent savings and fortunate real estate choices, the odds are that you will need to be a business owner — or an employee blessed with good stock options — to make it into the top 1 percent.

Next Sunday: Who really lost during the “Lost Decade.”

SCOTT BURNS is a principal of the Plano-based investment firm AssetBuilder Inc. His website is www.scottburns.

— Universal Press Syndicate



* Scott Burns, “The Lower 90,” 6/15/2012:

* Scott Burns, “Score Yourself for Wealth, The Sequel,” 9/9/2003:

* Federal Reserve Consumer Balance Sheet, Q1, 2012:

* Treasury Debt to the Penny and Who Holds It:

* “Changes in U.S. Family Finances From 2007 to 2010: Evidence From the Survey of Consumer Finances,” Federal Reserve Bulletin, June 2012: