This article was updated on May 30, 2017, and was originally published on May 17, 2015.

It may not be the best way to evaluate your accomplishments, but knowing how your financial situation stacks up against your peers can offer up valuable insight that allows you to make changes to shore up your financial security. In 2011, the U.S. Census Department took its most recent look at wealth by age group, and the findings provide a benchmark that the average American can use to help judge whether or not he or she is on the right track.

What is net worth?

An individual's net worth is a financial snapshot that offers insight into how much money a person would have leftover if they sold everything they own of value and paid off every debt owed.

For the plus side of the column, the Census Department totals up all assets, including equity in a home, savings, investments, and retirement accounts. They even include what equity, if any, people have in their car or truck -- but they don't include things like jewelry or pension plans.

Next, they add up all the secured debt, such as home and auto loans, and unsecured debt, including credit cards, that are owed.

Once total assets and total debt are calculated, total debt is subtracted from total assets to come up with net worth. That information is broken out across various age groups ranging from people less than 35 years old to people 75 and older. Finally, because averages can be significantly influenced by both those with no assets and those with a lot of assets, the median, which separates the top half from the bottom half, is used instead.

What are the numbers?

It's probably not surprising to discover that older people entering retirement have more money than those who are just starting out. It may be surprising, however, to learn that the average American's median net worth peaks in the year just following retirement, and then declines from there.

It may also be surprising to learn how much of a person's net worth is tied up in his or her home. If you exclude home equity from the net worth calculation, then the median net worth drops significantly across all age groups. For example, the median net worth for a person age 70 to 74 years drops to $31,823 from $181,078 when home equity is excluded.

Are Americans unprepared?

The typical American entering retirement may be in for an unwelcome surprise, because these numbers suggest they haven't put enough money aside to reduce their reliance on Social Security, which is supposed to act as a retirement income safety net.

Generally, the rule of thumb is that retirees should plan on tapping retirement saving to the tune of 4% annually. However, following that advice means that if you're retiring with a $100,000 retirement nest egg, you'll only be taking out $4,000 per year. If you combine that income with Social Security income -- the average retiree will receive $1,360 per month in 2017 -- then you're talking about roughly $20,000 per year in income. That's unlikely to be enough income for most retirees to live on.

Getting back on track

If your net worth isn't on pace to provide the income you'll need in retirement, the best solution is to begin making changes to your financial situation today. Small adjustments in spending now can free up hundreds of dollars per month, which can then be put to work in retirement plans, or set aside in savings. Thanks to compounding, those additional dollars can really add up.

For example, the median value of stocks, mutual funds, and retirement accounts for a person age 35 to 44 is $61,500. If a 40 year old with that amount invested, invests an additional $200 per month, and earns a hypothetical 6% annualized return, then his or her account could grow to be worth $395,624 at age 65. Increase that monthly investment amount from $200 to $500 per month, and that nest egg soars to $593,137! That could go a long way toward maintaining your net worth as you're living out your golden years.