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Monday, March 27, 2023

What is the average net worth by state?

What is the average net worth by state?

state license plates

By
Todd Burnaford

06.15.2021

Tracking your net worth is a common way to gauge your financial health. You can determine your net worth by subtracting all of your liabilities (debts) from all of your assets (things you own).

By analyzing the data of our Empower financial dashboard users, we set out to find how different states’ residents rank in their net worth. This information can help you determine if you want to take additional financial steps, like saving or investing more.

Following are the average and median net worth values of Empower dashboard users, broken down by state.

Net worth breakdown by state

It turns out that residents of California have the highest average net worth of any state in the country.

The average net worth of California families is $884,003. Connecticut ($873,746), Washington ($865,309), New Jersey ($810,106) and Massachusetts ($787,154) round out the top five states in average net worth.

On the opposite end of the spectrum, residents of North Dakota have the lowest average net worth of any state in the country. The average net worth of North Dakota families is $339,955. West Virginia ($376,690), Mississippi ($407,691), Arkansas ($439,790) and Oklahoma ($448,494) round out the bottom five states in average net worth.

Here is a full list of the average net worth of residents in every state, from the highest to the lowest average net worth.1

Rank

State

Amount

1

California

$884,003

2

Connecticut

$873,746

3

Washington

$865,309

4

New Jersey

$810,106

5

Massachusetts

$787,154

6

New Hampshire

$735,968

7

Vermont

$730,730

8

Virginia

$716,643

9

Colorado

$711,968

10

Illinois

$690,464

11

New York

$690,037

12

Oregon

$666,247

13

North Carolina

$653,513

14

Alaska

$652,999

15

Maryland

$650,616

16

Minnesota

$648,178

17

Pennsylvania

$636,880

18

Nevada

$636,385

19

Texas

$634,048

20

Idaho

$626,599

21

Florida

$619,275

22

South Dakota

$614,059

23

Washington, D.C.

$611,898

24

Arizona

$605,953

25

Iowa

$600,063

26

South Carolina

$587,075

27

Georgia

$568,001

28

New Mexico

$553,107

29

Wisconsin

$553,086

30

Michigan

$550,298

31

Ohio

$545,090

32

Kentucky

$544,334

33

Delaware

$542,743

34

Tennessee

$530,092

35

Kansas

$523,916

36

Rhode Island

$523,710

37

Hawaii

$518,417

38

Wyoming

$516,292

39

Nebraska

$504,347

40

Missouri

$504,319

41

Indiana

$497,440

42

Maine

$494,845

43

Montana

$490,433

44

Alabama

$481,228

45

Utah

$474,093

46

Louisiana

$459,770

47

Oklahoma

$448,494

48

Arkansas

$439,790

49

Mississippi

$407,691

50

West Virginia

$376,690

51

North Dakota

$339,955

Trends and observations

A close look at the list reveals that there are more East Coast states in the top 10 than West Coast states. Six of the top 10 states are located on the East Coast while only two — California and Washington — are located on the West Coast. Also, at number 11, New York is just outside the top 10.

Not surprisingly, many of the states where families have the highest net worth also rank highly in average 401(k) balances.

Half of the states that rank in the top 10 for average net worth also rank in the top 10 for average 401(k) balances: Connecticut (#1), New Jersey (#2) Virginia (#4), Washington (#5) and Massachusetts (#9).

Also, seven of the states with the highest average total retirement savings rank in the top 10 for average net worth: Connecticut (#1), New Hampshire (#2), New Jersey (#3), Virginia (#5), Vermont (#6), Maine (#8) and Washington (#9). These statistics indicate the important role that 401(k) and overall retirement savings plays in building net worth.

Why some states rank high or low

Not surprisingly, some of the states with the largest numbers of millionaire households ranked high in net worth.2

For example, New Jersey has the highest ratios of millionaire households per capita (9.76%). Connecticut (9.44%), Massachusetts (9.38%), California (8.51%), New Hampshire (8.47%) and Virginia (8.31%) also rank in the top 10 in both average net worth and ratio of millionaire households per capita.

In addition, Alaska and New Hampshire recently made the top 10 in our list of the best states in which to retire in 2021.

Meanwhile, a high cost of living, including high taxes, could be a factor in some states not ranking highly in average net worth. For example, Delaware, Tennessee, Wyoming and Florida are among the top five states with the highest total tax burden, while Hawaii has the highest cost of living of any state in the nation.3

How to increase your net worth

Regardless of whether you live in a state with a high, low or somewhere in between average net worth, you can still improve your own financial standing.

Here are a few ideas to consider:

Pay off debt.

Go back and look again at the definition of net worth at the beginning of this article: all of the assets you own minus the liabilities and debts you owe. So, one of the best ways to increase your net worth is to decrease your debt.

Credit cards may be a good place to start since they usually carry the highest interest rates. Paying them off not only lowers the debt side of your personal financial ledger, but it also reduces the amount of interest you must pay. Money saved in interest can go toward building net worth.

Save more for retirement.

As noted above, residents of states with high average 401(k) account balances and total retirement savings also tend to have high average net worth. One reason is because money saved in a tax-advantaged retirement account like a 401(k) is able to grow on a tax-deferred basis, which can result in more potential growth over the long term.

Another reason is that many employers offer to match employees’ retirement account contributions. An employer match is the closest thing there is to a “free lunch.”

Reduce your liabilities and expenses.

Let’s face it: Expenses are a part of life. Everybody has to pay for a place to live, food to eat, clothes to wear and a car to drive.

The key is distinguishing between necessary and excessive expenses. Consider taking a close and critical look at where you spend your money; in fact, consider writing down everything you spend for a week or even a month. You might be surprised at what you see.

This isn’t suggesting that you live a bare-bones lifestyle with no comfort or entertainment expenses. However, you might discover that you’re spending more money than you realized on some things that just aren’t worth it. Cutting back on these expenses may free up money that could help boost your net worth.

Our take

In short, one way to help build your net worth is saving more and spending less.

That starts with knowing where you stand. You can help get clarity on your financial life and goals using Empower’s award-winning tools for money management. Millions of U.S. households rely on the tools to:

  • Keep track of their true net worth.
  • Review categorized transactions from all financial accounts.
  • Analyze investments and uncover hidden fees.
  • Evaluate retirement readiness with the Retirement Planner.

1 Data taken from average and median net worths of Empower financial dashboard users.

2 Kiplinger, “Millionaires in America 2020: All 50 States Ranked,” March 2020.

3 WalletHub, “Tax Burden by State,” March 2022.

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Todd Burnaford

Todd Burnaford

Contributor

Todd Burnaford is a Senior Financial Advisor of the Private Client Group at Empower. He has been with the company since 2017.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third party websites. Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. Advisory services are provided for a fee by either Personal Capital Advisors Corporation ("PCAC") or Empower Advisory Group, LLC (“EAG”) depending on your specific investment advisory services agreement. Both PCAC and EAG are registered investment advisers with the Securities and Exchange Commission (“SEC”) and subsidiaries of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training. © 2023 Empower Annuity Insurance Company of America. All rights reserved. “EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America.

“EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. ©2023 Empower Annuity Insurance Company of America. All rights reserved.