How to Figure Out Your Net Worth in 15 Minutes

Net worth is one number that answers a big question: if you sold everything you own and paid off everything you owe, how much money would you have left? It is the cleanest measure of financial health, and most financial advisors recommend checking it once a year. For seniors, knowing your net worth matters because it shapes decisions about Medicare supplements, long-term care insurance, gifts to family, and whether your retirement savings will last.

The math is straightforward: assets minus liabilities equals net worth. Assets are what you own — your home, car, checking and savings accounts, retirement accounts (IRA, 401k, 403b), pensions with cash value, brokerage accounts, certificates of deposit, savings bonds, and any rental property. Liabilities are what you owe — mortgage, car loan, credit card balances, medical bills you have not paid yet, home equity line of credit, and any personal loans.

Most people are surprised by their number, in both directions. Homeowners who bought their house 30 years ago for $80,000 often discover the home is worth $400,000 today, putting their net worth far higher than they thought. On the other side, people who carry $20,000 in credit card debt see how much that debt is dragging down everything else.

The number does not have to be perfect. A rough net worth — within a few thousand dollars — is more useful than a precise one you never finish calculating. Use today's market value for the house (check Zillow or Redfin for an estimate), the Kelley Blue Book value for the car, and the current balance on each account.

Do not include Social Security in net worth, even though it is income. Social Security is a monthly payment, not an asset you can sell. The same is true for a traditional pension — count only the cash-out value if your pension offers one.

Write the number on a sticky note and tuck it into your tax folder. Next year, calculate it again. The change from year to year tells you whether you are building wealth, holding steady, or slowly drawing down. All three are normal in retirement — the goal is to know which one is happening so you can plan ahead.