Age plays a major role in how much money people make. This is simply because as we get older, we gain career experience and bring more value to companies. But when are a worker’s “peak earning years,” and what happens after they’re past?
Keep reading for insight into the average income by age in the United States.
Average Salary by Age in the US
Your education, industry, work experience, negotiation skills, and plain luck can all influence how much money you make. To get an idea of whether you’re earning a competitive salary, it can be helpful to know how much other people in the same age group are making.
Let’s take a closer look at the average income by age in the U.S., according to the Bureau of Labor Statistics.
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Average Salary for Ages 16-19
The early days of your working life usually aren’t the most lucrative: 16 to 19 year olds who work full-time make $32,396 a year on average.
Average Salary for Ages 20-24
Salaries start to rise as workers gain experience. Those in the 20 to 24 age group make an average annual salary of $38,324.
This is when many financially savvy professionals start building their 401(k) balance. That’s because the earlier you invest for retirement, the less money you’ll typically have to invest over time. Or, as the saying goes, your time in the market is more important than marketing timing.
Recommended: Average Savings by Age
Average Salary for Ages 25-34
We start to see a big increase in salary once workers reach the 25 to 34 age group, with the average annual income hitting $52,832.
Ideally, employees will put much of their raises and bonuses toward savings rather than impulse spending.
Average Salary for Ages 35-44
For 35 to 44 year olds, their annual salary is still growing: $62,608 on average. This is the beginning of what’s commonly referred to as “peak earning years.”
Average Salary for Ages 45-54
While many employees enjoy higher wages into their 50s, others find their salary stagnating. Overall, workers in the 45 to 54 age group actually see salaries drop a little, though only by $208. The average annual income in middle age is $62,400.
Recommended: Financial Tips for People in Their 40s
Average Salary for Ages 55-64
Salaries really drop for workers between 55 and 64, whose average annual salary is $61,204. What happened to paying for experience? Some companies may believe they can pay younger employees less for the same work, and see older workers as overpaid. As a result, 55+ workers are no longer offered the same retention incentives — such as pay raises — regardless of performance.
On the other hand, professionals who are satisfied with their retirement savings may choose to work less or retire early instead of waiting until the average retirement age.
Average Salary for Ages 65 and Older
Once workers reach 65, they are likely shifting to part-time work to stay active during retirement and to earn a little extra retirement income. Some people need more retirement income than others, and Social Security benefits and savings aren’t always enough. Which may be why we see salaries drop to an average of $54,444 per year for those 65 or older.
Tips for Maximizing Your Salary
Now that we’ve shed some light on the average income by age in the U.S., let’s address some ways workers can maximize their salary. That can mean finding ways to hold on to what you’re earning or to make it grow.
Create a Budget
If you’ve ever created a spending budget, you know how shocking it can be to see all the ways we fritter away our hard-earned salary on unnecessary purchases. By cutting back on items you don’t really need — from bottled water to forgotten subscriptions — you’ll free up more cash for things like saving and investing.
Pay Down Debt
What’s even more shocking than the amount you spend on little things like daily snacks and late-night Ubers? The interest charges and fees that come with debt. The faster you pay off high-interest credit cards, the more you can put toward longer term goals: an emergency fund, travel, or buying a home.
Make Saving Automatic
One easy way to make saving and investing a priority is to automate it: Set up regular, recurring transfers from your paycheck or checking account. That way, big goals like a dream wedding and retirement are prioritized before there’s even a chance to spend that money.
Take Advantage of Tax Deductions and Credits
Taxes may be an unavoidable part of life, but there are ways to pay less to Uncle Sam. Whether you hire a tax accountant or use software to file your return, look for opportunities to snag a larger tax refund.
Invest Your Savings
One way to make savings grow is to open a brokerage account and invest money in the stock market. Start small while you learn the ropes. While investing comes with risk (and more taxes), it’s a means of making your money work for you.
Recommended: Investing 101 Guide
Make Retirement Contributions
Contributing to a retirement savings account is a convenient way to save and invest in one fell swoop. As an added benefit, some employers match a portion of employee contributions. That means if someone isn’t contributing to their employer sponsored 401(k) plan, they’re leaving free money on the table. that helps expand an employee’s net worth.
Open a High-Yield Savings Account
A low-risk way to earn money on savings is by opening a high-yield savings account. This type of savings account tends to offer a higher interest rate than normal savings accounts.
The Takeaway
The average income by age in the U.S. tends to rise as workers gain more experience. Eventually salaries plateau and then drop off. Your peak earning years coincide with middle age, meaning you make the most you ever will in your 40s and 50s. The average salary in the U.S. tops out at $62,608 for ages 35-44.
Employees work hard for the money they earn, and they deserve for their money to work hard for them. This is where SoFi can help. With SoFi, users can track all of their money in one place, set savings goals, review spending breakdowns, and keep an eye on their credit score — free of cost.
FAQ
What does the average 30 year old make?
On a weekly basis the average 30 to 34 year old makes $1,016, or $52,832 per year. Workers in their mid to late thirties can expect to earn more: $1,204 per week, or $62,608 a year.
What percentage of Americans earns over $100,000 a year?
Most Americans earn less than $100,000 per year. Just 9% of Americans earn a six-figure salary, so workers shouldn’t feel bad if they earn less than $100,000.
What salary is middle class?
The salary that places you in the middle class varies depending on where you live and the cost of living there. According to one Pew Research study, the median middle-class household (not individual) makes $90,131. However, if you can afford to pay your bills and have money left over for savings and modest indulgences, you’re likely middle class.
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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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