When you reach retirement age, it's natural to wonder if you can afford to retire. There are a lot of factors that go into answering this question, and no one knows for sure what the future holds. But there are some things we know about your current financial situation which will help answer the question: What is my net worth?
We all have assets and liabilities -- what we own minus what we owe. Your home, car, furniture and other possessions represent your assets while credit card debt or student loans represent your liabilities. Collectively these items make up your net worth. Now let’s see how these two compare!
Your assets should be greater than your liabilities by at least 25%. This means that if you have $100,000 in assets, your liabilities should be $75,000 or less. If you have more than $100,000 in debt, then your net worth is negative and you may not be able to retire unless you reduce expenses elsewhere.