Salary 90000 which percentile

How much money should you have saved by when?

How much money should you actually have saved by the age of 30, 40 or 50? The answer to this is different for everyone. A new study by the Cologne Institute for Economic Research shows the age-specific distribution of net household wealth in Germany. So we have at least one point of reference for each age group that can serve as an intermediate goal when saving and investing.

Investing with a goal in mind

A clearly defined goal, which can be structured by smaller interim goals, is central to any wealth accumulation. This makes it possible to formulate savings rates and, if necessary, readjust them using various adjusting screws: Can even more savings be made? Are the intended savings and wealth targets perhaps set too high? When in my life will I have accumulated how much wealth?

Without a calculable and quantifiable goal, it is difficult to measure whether you are already on the right track. Of course, many would like to be wealthy at some point in their lives. In this context, the question arises for many younger (and also older) investors what it actually means to be rich or wealthy.

Wealth is relative

“I wouldn't consider myself rich”, or: “I would count myself among the upper middle class in Germany”. These statements show that the feeling of wealth is shaped by the subjective perspective. The subjunctive used both times alone suggests that there can be no objective measure of wealth. Incidentally, the quotes come from Federal Finance Minister Olaf Scholz and CDU politician Friedrich Merz.

Most Germans would probably categorize both as rich or at least very wealthy - Scholz as a civil servant of the highest salary and Merz as a member of the supervisory board of several companies and a millionaire. The currently richest person in the world and Amazon boss Jeff Bezos, on the other hand, would probably only shrug his shoulders tiredly if he were confronted with such sums. So you are always rich in relation to someone else - wealth is relative.

Age and Distribution of Wealth

Accordingly, a common method of determining wealth is by comparing it to others. This can happen, for example, on the basis of the comparison of net assets. However, an important factor in the distribution of wealth is age - wealth is extremely unevenly distributed in terms of age structure. In comparison, young people have significantly less wealth than older people. This is due to the fact that they simply haven't had that much lifetime to amass one. Salaries also usually increase with experience and thus with age.

For this reason, especially as a young person, it makes perfect sense not to compare one's net worth with the average of the population as a whole, but with the net worth of the age group to which one belongs. A household of an under-30-year-old with net wealth over € 71,300 already belongs to the highest percentile of household net wealth in Germany. In the wealthiest group - the 55-59 year olds - the average value of this upper percentile is a proud € 625,400.

Interactive graph with wealth percentiles by age group

Study by the Cologne Institute for Economic Research

The Institute of the German Economy in Cologne published a new short report in October 2020 with the name “Asset Limits: Large Group-Specific Differences”. This study relates exclusively to household net assets and the figures are from 2018. Household net assets are the sum of all assets (real estate and other financial assets, such as day and time accounts, savings books, securities and insurance) minus all liabilities (mortgages , Consumer and education loans). It should be noted that households, rather than individuals, serve as units.

On the x-axis you will find the different age groups, from under 30 to over 75 years. The household net worth was divided into percentiles. A percentile indicates the proportion of the values ​​in the distribution that are less than or equal to the specified value; If a household net wealth is in the 90th percentile, this means that 10% of the household net wealth in this age group is greater and 90% smaller.

Take statistics as a guide

Younger people in particular can often feel a little lost in planning their own assets and investments. How much is a normal fortune? How much should or could I own at a certain age? What are appropriate target values? These are the questions you ask yourself when dealing with your own wealth.

The IW Cologne statistics can be used as a first point of reference in order to develop a feeling for the average wealth situation in Germany. In any case, when it comes to wealth planning, it is important to set tangible and realistic goals. However, these are individually very different - after all, it is not the highest priority for everyone to belong to the top percentile at every point in life. For young people in particular, it is an important step to first become debt-free and consistently start building up their wealth.

And as already mentioned at the beginning of the article: Above all, wealth is also a subjective feeling that often differs greatly from reality. According to surveys conducted by the Bundesbank in 2019, not even 3% of households feel they belong to the wealthiest 20%. So in Germany you usually feel poorer than you are.