Lifetime Income Trajectories by Education Level

Your education level can have a profound effect on how much money you can expect to earn throughout your life.

That’s one of the major takeaways from the U.S. Census Bureau’s data for the average total money income by age for different levels of educational attainment in 2022. This data shows several different patterns:

• The more education you have, the higher the amount of income you can expect to earn at every age.
• The amount of income you earn will most likely peak between the Ages of 45 and 64.
• The more income you earn while you’re younger, the earlier you are likely to retire.

Here’s the chart illustrating each of these patterns.

Let’s go through each of the takeaways:

The more education you have, the higher the amount of income you can expect to earn at every age. The chart shows those with more education have higher average total money incomes than those with less education for every age group.

The amount of income you earn will most likely peak between the Ages of 45 and 64. You can see this by where the annual income earned peaks for each level of education. Those with a less than high school level of education peaks at Age 45-49, while those with high school diplomas peaks at Age 60-64. Americans who earn associate degrees see their incomes peak on average at Age 55-59 and those with bachelor’s degrees peak at Age 50-54.

The more income you earn while you’re younger, the earlier you are likely to retire. This takeaway is all about why the incomes for the different education levels peak at the ages they do. Those with higher incomes can typically afford to retire earlier. After they do retire, the average total money income earned within each education level drops, with the size of that drop increasing with age.

The size of that dropoff for retirement is bigger for those who have earned higher incomes during their lifetimes, which is why it shows up as it does when the income trajectories by age is organized by education level.

Reference

U.S. Census Bureau. PINC-04. Educational Attainment–People 18 Years Old and Over, by Total Money Earnings, Work Experience, Age, Race, Hispanic Origin, and Sex. Person Income in 2022, Both Sexes, All Races. [Excel spreadsheet]. Accessed 17 December 2023.

Image credit: Image by tuku from Pixabay.