By Age 40, Your Income Is Probably as Good as It’s Going to Get


By age 40 you’re done. That’s the conclusion of a report from the New York Fed that looks at lifetime earnings from age 25 through retirement. The charts on the right tell the story.

The top chart shows average earnings by age. It’s a little hard to immediately see how dramatic the income peak is since the y-axis shows the log of earnings, but if you do the arithmetic it demonstrates that, on average, by age 40 you’re within about $1,000 of your peak earnings. You’ll get inflation adjustments after that, but for the bulk of us, that’s it. Real earnings pretty much plateau after age 40.

The bottom chart illustrates this in a different way. The yellow rectangle shows earnings growth for the bottom 80 percent. The blue line is for ages 25-35, and there’s a fair amount of earnings growth except at the very bottom. The red line is for ages 35-45, and it’s pretty close to zero. There’s virtually no earnings growth for anyone. And the green line is for ages 45-55. It’s actually negative. If you put the latter two age groups together, the report concludes that “average earnings growth from ages 35 to 55 is zero.”

Now, outside the yellow box we have the top 20 percent: the well off and the rich. Those folks show a lot of earnings growth when they’re young, but they also show fairly healthy growth between ages 35-45.

And the top 1 percent? That’s on the very far right, and as you can see, they show earnings growth at every age level.

None of this will come as much of a surprise to anyone, but I thought it was interesting to see it in black and white, so to speak. If you’re planning to make your fortune, you’d better do it by age 40. With only a few exceptions—and those exceptions are mostly for people already making a lot of money—you’re done by then. Your income just isn’t likely to ever go up much after that.

(Via Wonkblog’s Danielle Paquette.)

THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.