Bad News For Men: If You Aren’t Rich By 45 You Won’t Be

up and down money graphs.jpgLife may begin at 40, but the question is can you afford it? The bad news is that if you aren’t rich by 45 you have almost no chance of making it.

In a new research report, Federal Reserve researchers from Minneapolis and New York discovered “the bulk of earnings growth happens during the first decade” of work. By that they mean between age 25 and 35. After that, well, “for the median LE (lifetime earnings) group, average earnings growth from ages 35 to 55 is zero.”

After age 45, only the top 2 percent generally experience any significant improvement in earnings.

The researchers used Social Security Administration data dating back to 1978 to analyze mens’ earning trajectory. Women were not studied because their decision to move in and out of the labor market makes a similar analysis more complex.

What they found was that the bulk of a man’s earnings growth comes by the time he is 35. After that, most men see only modest raises, and after 45, those in the bottom 90 percent of lifetime earners see an actual decrease in earnings. In fact, all but a small fraction of men see more than small pay increases once they hit middle age.

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Mean earnings by ageThe chart, from an earlier research paper by some of the same researchers shows the differences clearly. This one, however, includes women.

Keep this in mind as you ponder your earnings track: the study looks mostly at the earnings history of Baby Boomers and their fathers. Many of them were blue-collar workers whose raises were determined by union contracts or who saw only incremental increases. Today’s workers are both fewer in number and much more likely to be white-collar knowledge workers. How that will affect the analysis only the future can tell.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


4 Comments on “Bad News For Men: If You Aren’t Rich By 45 You Won’t Be

  1. Here’s even more bad news: you likely won’t be rich, period. So, instead of chasing a 2.5 or 3 bathroom house, and accepting numerous low paying jobs based on the Opportunity! the recruiter claims they represent, demand a reasonable salary now, settle for a 1.5 or 2 bath house, and spend more time with your family and friends.

    The alignment of skills, circumstance, and luck that are required to truly be rich is so rare that your chances of winning the lottery are better. But it is the inherently irrational thinking of most people that keeps them chasing that dream, and that the currently rich depend upon to keep fueling their ever growing riches while the wealth gap widens and the number of people who have simply given up looking for a job grows and grows. To paraphrase George Carlin, it’s called the American Dream because you have to be asleep to believe it.

  2. Forbes Magazine story 6/22/2014 Employees who stay in companies longer than two years get paid 50% less in just 10 years. Job hoppers can expect 10% to 20% raise in wages when they change jobs. Workers who don’t change jobs can expect an annual 3% raise on wages that fall far behind the job hoppers.

    1. I’ve long wondered whether the stigma against job hopping was motivated by companies wanting people to stay even when they know someone else is offering a better salary. This kind of confirms that view.

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