When we’re younger, we probably think that we’ll make more money when we’re older. Job seniority comes with promotions—and raises—right?
As it turns out, your money arc is shorter than you think. According to an analysis from PayScale.com, women’s pay peaks at age 39, and, according to their median data, at about $60,000. After that, there may be small bumps in salary, but they rarely outpace inflation—so in real terms, you’ll make that $60,000 for the rest of your career.
Maybe that doesn’t sound so bad, except that, based on the same data, men’s salaries continue to grow until age 48, and top out at a median of $95,000.
And, regardless of your gender: “We’re trained to believe that our income is going to go up in a straight line, in a constantly growing trajectory,” says Lauren Lyons Cole, a Certified Financial Planner™ in Manhattan. “Unfortunately, that’s not the way it happens.”
What a Salary Arc Looks Like
So what’s actually happening? In your 20s, fresh out of school, everything is looking up—you’re probably doing some job hopping, getting promoted, climbing the corporate ladder with gusto, and your paycheck looks better and better. According to the same PayScale study, both men and women see salary growth of about 60% by age 30.
After that, however, the rate of growth slows for women. By age 39, the typical woman’s income has grown by less than 20 percent, compared to her 30-year-old self. And after that? Stagnationville. Sure, you’ll probably get cost-of-living raises along the way, but the days of the double-digit raise are over.
The picture is rosier for men, whose salary growth continues to be healthy after age 30. But by age 48 in this study, the typical man’s income has grown by about 45%, compared to age 30. That’s not too shabby, but it’s not on the cusp of retirement, either.
Of course, much of this depends on your career choices. Pharmacists, for instance, usually make top-dollar salaries straight out of school, but the potential to significantly boost their paychecks later is nearly nil. Lawyers, on the other hand, are typically well into their 50s before their salaries peak. “Any job where you get the majority of your training in school and the first few years of your career is not going to see much pay growth after that,” says Katie Bardaro, lead economist at PayScale. “If you’re a lawyer, you’re constantly learning on the job.”
But that’s not to say that you will necessarily peak at 39 (or 48). Here, some strategies for salary success:
When You’re in Your 20s
Have a plan. Out of college, it’s tempting to take the first job that comes your way. But one of the keys to work achievement is finding a career that makes you want to show up on Mondays. “From the first job you take, have a career strategy,” says Kathy Caprino, president of Ellia Communications, a career and leadership coaching company. “That can morph, that can be very malleable, but understand what your passions and talents are, and try to craft a career that’s aligned with that.”
Consider your industry carefully. The differences in men’s and women’s numbers in PayScale’s analyses was largely driven by job choice. According to PayScale’s results at least, “Men tend to go into engineering, computer science, management roles and director roles more so than women, and those jobs see fairly consistent pay increases year in and year out,” Bardaro says. Maybe there isn’t a higher-paying career choice that lights your soul on fire, but if there is, you’d be foolish not to pursue it over another option.