As the golden years approach, many seniors find themselves reviewing their financial standings and wondering if they’ve saved enough to retire comfortably. One important factor when evaluating personal finances is understanding your personal net worth.

For folks who are making retirement plans, it’s an important time to take stock of your personal net worth to help you gain a clearer picture of your financial health. In this guide, we’ll dive into how to calculate net worth and why it matters to know your personal net worth. Let’s get started!

What Is Your Personal Net Worth?

First, it’s important to address this pressing question: what is a personal net worth statement? A personal net worth statement shows the difference between what you own (your assets) and what you owe (your liabilities). It’s commonly used as a financial metric to provide a snapshot of your overall financial health.

Formula for Personal Net Worth Calculation

You may be wondering, “What is my personal net worth?” Here’s a very simple formula to help you calculate your net worth:

Net Worth = Total Assets – Total Liabilities

While there are no hard and fast rules to determine whether you have the “right” net worth, having an estimate can help you make informed decisions about your retirement planning, investment strategies, and debt management.

Why Is Knowing Your Net Worth Important?

Knowing your net worth is like having a financial compass that guides you on your journey to a comfortable, enjoyable retirement. Here are a few key reasons why understanding what your net worth is can help you in your 50s, 60s, and beyond.

Retirement Planning

One of the most important reasons you should know your net worth — especially as a senior — is for retirement planning purposes. Your net worth is a critical component of the retirement planning process. It helps you estimate whether you have enough savings and assets to retire comfortably. If your net worth falls short of your retirement goals, you may need to adjust your financial savings methods.

Investment Strategy

Another critical reason to know your personal net worth is for an investment strategy. Your net worth can influence your investment choices. A solid net worth might allow you to take more calculated risks or explore additional investment opportunities. On the other hand, a lower net worth may warrant a more conservative approach to protect your retirement nest egg.

Debt Management

Part of knowing your personal net worth is understanding how much you owe on assets. Getting ahold of how much debt you have can motivate you to prioritize debt reduction before retiring.

Estate Planning

Understanding your net worth can help you evaluate potential estate tax liabilities and determine how your assets will be distributed to your heirs and beneficiaries.

Financial Goals

Keeping track of your net worth can help you set and monitor financial goals. From paying off your mortgage to building an emergency fund, your net worth serves as a benchmark for measuring your progress.

What Should Be Included in Your Personal Net Worth?

As you gear up to calculate your net worth, it’s important to gather the value of your assets and liabilities. Taking stock of everything you own and owe can take some time. To save you some trouble, here’s a list of what you should include in your personal net worth:

Liquid Assets

Liquid assets are a type of financial asset that you can readily convert into a case or use for expenses. These typically include:

  • Cash: This includes the money you have in checking and savings accounts.
  • Certificates of Deposit (CDs): Include the current value of any CDs you hold.
  • Money Market Accounts: The balance in your money market accounts is considered a financial asset.
  • Other “Cash Equivalents”: Investment accounts that are easily converted to cash within three months or less, such as Treasury bills.


In addition to liquid assets, you should gather the value of your investments. Investments have the potential to grow in value over time and should be considered assets. Here are some examples of investments that fit in this category:

  • Stocks: The current market value of your stock investments.
  • Bonds: Include the current market value of any bonds you hold, such as government bonds or corporate bonds.
  • Mutual Funds: The value of your mutual fund investments.
  • Retirement Accounts: Include the balances in your retirement accounts like 401(k)s, IRAs, or pension plans.
  • Real Estate Investment Trusts (REITs): If you have investments in REITs, include their current value.
  • Life Insurance Policy: Include the cash surrender value or life settlement value of your life insurance policy.
  • Annuities: If you’ve invested in an annuity, include its value as an asset.

Physical Property

Calculate how much physical property you own to gain a full picture of your net worth. Here’s a list of physical property assets to include in your net worth calculation:

  • Real Estate: Include the current market value of your primary residence, vacation homes, rental properties, or any other real estate you own.
  • Vehicles: Include the estimated value of your cars, motorcycles, boats, or recreational vehicles that you own.
  • Jewelry and Valuables: Items like jewelry, artwork, antiques, and collectibles should be included, but it’s essential to get them appraised for accurate values.
  • Home Furnishings and Appliances: While not typically as valuable as real estate or vehicles, the collective value of your home furnishings and appliances can add up and should be included.

Loans and Debts

Finally, you’ll want to evaluate how much debt you have as you calculate your personal net worth. Here is a list of loans and debts you should include:

  • Personal Debt: Include any personal credit card debt or loans that you owe.
  • Student Loans: If you have any outstanding student loans from college, you should include that amount in your liabilities.
  • Mortgages: If you have a mortgage on any properties, include that in your list of liabilities.
  • Vehicle Loans: Include any outstanding loans you owe on your vehicles (cars, trucks, boats, scooters, etc.).

As you’re gathering the value of your assets and debts, it’s important to be as accurate as possible. You may need a professional appraisal for real estate, jewelry, and/or vehicles. Consider consulting an expert for valuation.

How Do You Calculate Your Personal Net Worth?

Now that you have an understanding of what to include in your personal net worth, here’s the best way to calculate your personal net worth.

1. Determine what assets you have

First, you’ll want to gather the financial values of every asset you own. Consult the list above for a comprehensive checklist of what to count as assets, or take a look at this cheat sheet:

  • Financial Assets: List all your financial assets, such as cash, savings accounts, certificates of deposit, money market accounts, stocks, bonds, mutual funds, retirement accounts, and cash equivalents. For each item, note its current market value.
  • Physical Property: Document the current market value of your physical property, including your primary residence, vacation homes, rental properties, vehicles, jewelry, artwork, antiques, collectibles, home furnishings, and appliances. For real estate, consider obtaining a professional appraisal, and for valuable items like jewelry or collectibles, seek expert valuation if needed.

2. Identify any liabilities

Next, compile a list of outstanding debts and financial obligations (also known as your liabilities). This should include any mortgage loans, auto loans, credit card debt, personal loans, student loans, outstanding medical bills, etc.

3. Subtract liabilities from assets

Finally, subtract your total liabilities from your total assets to get the value of your personal net worth. If you need help calculating your personal net worth, you may want to use an online personal net worth calculator that can guide you every step of the way.

Your net worth will either be positive, indicating that your assets exceed your liabilities , or negative, suggesting that your debts surpass your assets. By understanding your net worth, you can make informed decisions about retirement planning, investment strategies, and debt management, ensuring that you are on the right financial path as you prepare for retirement. Now, the next time you find yourself asking, “What is my net worth?” you’ll have a better understanding of how to calculate it.

As you set out on your journey toward the golden years, understanding your net worth can help you gain financial clarity and allow you to pivot before retirement. When calculating your personal net worth, remember that Retirement Genius is here to help. Whether you have questions about calculating your assets or want to learn more about selling your life insurance policy to gain a financial windfall, Retirement Genius has the resources to point you in the right direction. Give us a call today, and we can chat about your future: 866-602-5000.