Your net worth is the dollar value of everything you own (assets) minus everything you owe (liabilities). It is the single best summary measure of household financial position, more meaningful than income because it reflects accumulated savings and debt reduction. In Canada, the median household net worth was approximately $519,700 in 2023 (Statistics Canada), with home equity the largest asset for most households.
Quick answer: Net worth = total assets − total liabilities. For most Canadian households, the biggest asset is home equity and the biggest liability is the mortgage. Updating the calculation every 6-12 months is the right cadence.
What this means: Tracking net worth over time tells you whether your financial trajectory is positive. A growing net worth means assets are outpacing debt reduction — that’s the goal regardless of income level.
What to do next: List your assets and liabilities to see your current net worth. Calculate your net worth →
The formula
Net Worth = Assets − Liabilities
That’s it. The work is in listing the right items at the right values.
Assets to include
| Category | Items | How to value |
|---|---|---|
| Cash & equivalents | Chequing, HISA, GICs, money market funds | Current balance |
| Investments — registered | RRSP, RRIF, TFSA, FHSA, RESP, LIRA, LIF | Current market value |
| Investments — non-registered | Brokerage accounts, mutual funds, dividend stocks | Current market value (not original cost) |
| Real estate | Primary home, rental property, cottage | Current market value (recent comparable sales) |
| Pension | Defined-contribution plan balance, defined-benefit commuted value | Plan statement; commuted value from administrator |
| Vehicles | Cars, boats, RVs | Current trade-in / resale value (not purchase price) |
| Business interest | Equity in a private company or sole proprietorship | Conservative book value or recent valuation |
| Personal property | Jewelry, collectibles, art | Only if individually $5,000+ and verifiable; usually exclude |
Liabilities to include
| Category | Items | How to value |
|---|---|---|
| Mortgage | Primary home, rental property | Remaining principal balance |
| HELOC | Outstanding draw on home equity line | Current balance |
| Vehicle loans | Auto loan, lease residual | Remaining balance (lease residual is a liability for buy-out) |
| Student loans | Federal and provincial student loans | Current balance |
| Credit cards | All balances | Statement balance (not just minimums) |
| Lines of credit | Unsecured LOC, personal loan | Current balance |
| Tax owing | Outstanding CRA balance, deferred capital gains on rental, business tax | Estimated tax owing on liquidation |
Canadian-specific items to value carefully
- RRSP & RRIF. Show at gross value. Some people prefer to discount by their expected withdrawal tax rate (often 25-40%); both approaches are valid, just be consistent. A $200,000 RRSP at 30% future tax is worth roughly $140,000 in spending power.
- Defined-benefit pension. Use the commuted value from your latest pension statement, or the present value of expected pension payments. This can be the largest asset for long-tenured public-sector employees.
- Home equity (HBP balance). If you withdrew from your RRSP under the Home Buyers’ Plan, the outstanding repayment balance is technically a liability, but most people net it off the home equity calculation.
- FHSA. First Home Savings Account balances count as an asset like a TFSA. Tax-free both contribution and withdrawal (for qualifying home purchase).
- RESP family balance. Counts as an asset, but earmarked for children’s education. Worth tracking separately.
Net worth benchmarks by age (Canadian medians)
| Age | Median household net worth | Notes |
|---|---|---|
| Under 35 | ~$73,000 | Often dominated by student debt and starter savings |
| 35 to 44 | ~$310,000 | Home purchase, first mortgage paydown, RRSP buildup |
| 45 to 54 | ~$705,000 | Peak earnings, mortgage further reduced |
| 55 to 64 | ~$1,100,000 | Pre-retirement; pension commuted value adds substantially |
| 65+ | ~$960,000 | Drawdown begins; supplemented by pensions and CPP/OAS |
These are 2023 Statistics Canada household medians. Singles will be roughly 40-50% of these numbers; high-cost-of-living urban centres skew higher because of home equity.
Worked example
Kevin and Lisa are 45, married with two kids. Combined household financial picture:
| Assets | |
|---|---|
| Chequing + HISA | $22,000 |
| RRSPs (combined) | $210,000 |
| TFSAs (combined) | $88,000 |
| RESP for two kids | $42,000 |
| Lisa’s DC pension | $135,000 |
| Home (market value) | $720,000 |
| Two cars (resale) | $28,000 |
| Total assets | $1,245,000 |
| Mortgage | $378,000 |
| HELOC | $22,000 |
| Car loan | $11,000 |
| Credit cards | $3,500 |
| Total liabilities | $414,500 |
| Net worth | $830,500 |
Kevin and Lisa are well above the median for their age band. The biggest contributor is home equity ($342,000) and the combined RRSP / TFSA / pension ($433,000).
How often to update
Every 6-12 months is the right cadence. More often than that and you focus on market noise; less often and you miss trajectory changes. Year-end (December 31) is the natural anchor because investment statements all align.
Why net worth matters more than income
A high earner with no savings and high debt has a low or negative net worth. A modest earner who has paid down a mortgage and contributed to RRSP for 25 years can have a high net worth. Net worth measures financial position; income measures cash flow.
Lenders look at net worth (especially for mortgage approvals, business loans, and HELOCs). Estate planning is driven by net worth. Retirement planning is driven by net worth, not by current income.
Frequently asked questions
- What is the formula for net worth?
- Total assets minus total liabilities. Assets are everything you own with cash value; liabilities are every dollar you owe.
- What is the median household net worth in Canada?
- Approximately $519,700 in 2023 (Statistics Canada), heavily influenced by home equity for owners. Median for renters is much lower.
- Should I include my home in net worth?
- Yes. Use the current market value (recent comparable sales) and subtract the remaining mortgage balance. Home equity is the largest asset for most Canadian households.
- Do I count RRSPs at full value or after-tax?
- Most people use the gross balance for simplicity. A more conservative view discounts the RRSP by your expected future tax rate, usually 25-40%.
- How often should I calculate my net worth?
- Every 6 to 12 months. Year-end is the natural anchor because all investment statements align to December 31.
- Is a defined-benefit pension included in net worth?
- Yes. Use the commuted value from your latest pension statement. This can be the largest asset for long-tenured public-sector employees.
- Should I include a vehicle in net worth?
- Yes, at current trade-in or resale value — not the original purchase price. Vehicles depreciate, so use a realistic Canadian Black Book or comparable estimate.