This Is the Average 50-Something's Net Worth. How Do You Compare?

You may have a lot of wealth accumulated by your 50s.

When you're in your 20s, calculating your net worth can be a bummer of an exercise. That's because many 20-somethings have debts to pay off and limited earnings. And so rather than build wealth, many people in that age group are simply trying to stay afloat.

But once you reach your 50s, there's a good chance you'll have accumulated a much higher net worth than your younger counterparts. And yes, it really has to do with your age.

See, a great way to grow your net worth is to invest in assets that have the potential to gain value over time. Both stocks and real estate fall into this category.

If you buy stocks in your 30s or 40s, by the time you reach your 50s, they may end up being worth a lot more money than when you purchased them. Similarly, if you buy a home in your 30s, that property could gain a lot of value over 20 years.

Now before we go any further, let's clarify just exactly what net worth is. Simply put, it's the value of your assets minus your debts. So if you have a $300,000 IRA, a home worth $600,000, and $100,000 left on your mortgage, that leaves you with an $800,000 net worth. Easy.

How are 50-somethings doing on net worth?

You may be wondering how your net worth compares to that of your peers. And Personal Capital has some answers. According to a recent report, the average person in their 50s has a net worth of $1,334,826. Wowza.

But don't get too hung up on that number just yet. That's because the median net worth among people in their 50s is a lot lower -- $360,803. Why the discrepancy? When you have a situation where the median is lower than the average, it means more people have less than the average, not more. Still following?

So in this case, what likely happened is that a few very high net worth individuals were counted in Personal Capital's tally, thereby driving up average net worth to well over $1 million. But you should really focus more on median net worth for a better point of comparison.

How to increase your net worth before retirement

If you're in your 50s, it means you may only have about another decade or so until retirement rolls around. And so if your goal is to increase your net worth in time for that milestone, you'll need to make the most of your remaining time in the workforce.

For one thing, it pays to keep funding and investing in your IRA or 401(k). Furthermore, once you turn 50, you're allowed to make catch-up contributions in your retirement savings plan. That's a great way to grow added wealth for those post-work years. (For clarity's sake, you don't have to be "behind" on savings to take advantage of catch-up contributions. The only requirement is to be 50 years of age or older.)

Additionally, aim to keep your money invested in stocks if retirement is still roughly a decade away or more. It's true that shifting toward safer investments as retirement nears is a smart move -- but it may be too soon to make that change now. And if you stay invested in stocks, you might enjoy a lot more growth in your portfolio than what a safer investment, like bonds, might give you.

All told, 50-somethings have a higher average and median net worth than their younger counterparts, but a lower average and median net worth than those in their 60s. But that's a good thing, because it means that if you keep up your good saving and investing habits, you might end up with even more wealth in a decade's time.