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How to Create a Personal Balance Sheet: A Guide for Seniors


As you journey through the golden years, understanding and managing your finances becomes increasingly more important. Before you can determine the date at which you can securely retire, you need to create your own personal balance sheet.

Crafting a personal balance sheet is a powerful tool that can provide clarity and help you make informed decisions about your financial well-being. In this guide, we'll provide instructions on how to create one.


What Is My Net Worth?

Your net worth is simply the difference between what you own and what you owe, or as many have come to call it, a personal balance sheet.

In accounting, assets encompass everything you own, from your home and savings accounts to investments and personal belongings. Liabilities, on the other hand, represent your debts and financial obligations. The difference is your net worth, and you will rely on this number throughout your retirement years.

Once you begin keeping your personal balance sheet up to date on a regular basis (we recommend once a year), you will be able to see trends that you hadn’t noticed before while making sure that you are on the right track toward meeting the retirement goal you set for yourself.


Understanding Assets

Let’s get acquainted with different types of assets:

  • Current Assets
  • Investments
  • Retirement Accounts
  • Real Estate
  • Business

Current Assets

Current assets are assets that are expected to be converted into cash or used up within a year. You should be able to liquidate these assets in about one year or less.

Current assets include:

  • Savings accounts
  • Checking accounts
  • Certificates of deposit (CDs)


Investments refer to assets acquired with the expectation of generating income or appreciation in value over time, such as stocks, bonds, real estate, or other financial instruments. Do not include investments within your individual retirement account (IRA) in this category.

Investments include:

  • Stocks
  • Bonds
  • Mutual Funds

Retirement Accounts

Retirement accounts are specialized investment accounts designed to help you save for retirement, offering tax advantages and specific regulations to encourage long-term savings. Retirement accounts come in many shapes and sizes, and they are each beholden to their own regulations. 

Retirement accounts include:

  • 401k
  • IRA
  • Roth IRA
  • Pension Plans
  • Employee Stock Ownership Plans (ESOPs)

Real Estate

Real estate, in terms of assets, refers to physical property, including land, buildings, and any improvements on the land, that holds intrinsic value and is considered part of your wealth portfolio.

You can use sites like to roughly value your home.


If you own a business, it’s best to speak to your accountant or seek outside advice on how you should value it.


Planning for the Future 

Creating a personal balance sheet is not just a financial exercise; it's an empowering step towards taking control of your financial destiny. By understanding your assets, liabilities, and net worth, you can navigate your financial landscape with confidence, ensuring a secure and fulfilling retirement. You can use it to assess your financial health and make informed decisions about budgeting and spending: such as whether or not you will make the move to a retirement community.


Financial planning for a retirement community involves careful consideration of your individual needs, lifestyle preferences, and future healthcare requirements to ensure a secure and fulfilling retirement experience.

If the process seems overwhelming or if you have complex financial arrangements, consider seeking the assistance of a financial advisor. A professional can provide personalized insights, helping you make informed decisions based on your unique financial situation and goals.

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