Median Income By Age And Sex In America

Do Americans have an earnings problem or a savings problem? Unfortunately, I think we've got both. Take a look at the median income by age and sex from the latest Census Bureau data.

Median income by age and sex

The median income for 20-24-year-olds is $25,116 for women and $27,040 for men.

The median income for 25-34-year-olds is $35,620 for women and $40,560 for men.

By middle age, the median income for 35-44-year-olds is $40,768 for women and $49,972 for men.

The median income for 45-54-year-olds is $40,248 for women and $52,624 for men. In other words, the median income doesn't increase significantly after age 44.

In fact, the median income plateaus for both women and men ages 55-64 at $41,080 for women and $53,508 for men.

Analyzing The Income By Age And Sex Data

The obvious points are 1) people make more the older they get and 2) men make more than women at every single age group. Making more as you age is nothing insightful. What is insightful is how the difference between men and women's salaries really start to grow in their 30s. A 25% pay gap is huge!

So what's going on here? The answer must be biological (life). For example, I have a female friend who was the most gung-ho worker ever. She was an Electrical Engineer in college (one of the hardest majors) and told me that she planned to work “forever” after Harvard Business School.

Two years after HBS, she was pregnant, and when I asked her whether she still planned to go back to work she said, “No way! Raising my children is the most important thing in the world to me.”

It's been five years since she's been out of the work force. If she decides to return at age 37, it's logical to assume that she will have to start at a lower pay and title than colleagues who kept working while she was away.

Regarding finding a solution to the gender wage gap for equal pay for equal work, the fix I've come up with is to have equal paternity leave rights for men and women. With equal paternity leave rights, employers are more blind to discriminate.

What's interesting is that women have more money in their 401k on average up to the $150,000 income mark, according to a 2017 report by Fidelity Investments with 13 million tracked accounts. Women earning between $20,000 and $40,000, for example, have saved an average of $17,300 in their 401(k) compared to $15,200 for men in the same income range.

Median Income By Age And Sex In America Continued

401k Balance By Sex - Median Income By Age And Sex In America

I live in San Francisco where the median single family home costs $1-1.1 million dollars and the median income is roughly $76,000. But when I go to look at median priced homes, I see nothing I want.

Even the fixer I bought costs more than the median home price, and I'm probably going to end up spending at least another $130,000 to restore the home to good condition.

When I look at the median income levels by age in the chart above, I get a little depressed because it's hard to get ahead with that income figure unless both men and women work. But can both men and women who make median incomes work if they have a family? Hard to say given the cost of childcare is atrociously high.

We know that the median household net worth has gone nowhere in the past 40 years. Furthermore, the median household income has been going down since 2000, but finally showed a rise to $68,000 based on the latest data available by the Federal Reserve.

Meanwhile, housing prices, healthcare costs, and college tuition during the same time period have far outpaced income growth. Is there any wonder why Americans are having a tougher time getting ahead?

Strategies For Increasing Income And Net Worth

I hope every single reader on Financial Samurai increases their incomes and their net worths above the median levels over time. The median income by age and sex would income. I'd like to reiterate some moves one can do to make these two things happen.

1) Move to a more economically robust area of the country.

It took our settlers 3-6 months to cross the entire continent. Now we can make the same trip in four days by bus. Take some risks and go to where the action is. Yes, I understand it's frightening, but we live in America where rules and laws are pretty uniform.

I suggest geoarbitraging first in your city, then move to a different state, and then consider moving internationally to a place like Thailand or Malaysia. You don't have to go straight to a foreign country to save on costs.

In fact, it is largely due to geoarbitrage within the United States that I'm bullish on the Heartland of America. I'm taking advantage of this logical migration shift away from expensive coastal cities by aggressively buying midwest and southern real estate through real estate crowdfunding.

I put my money where my mouth is by selling a San Francisco rental home for 30X annual gross rent and reinvesting $550,000 of the proceeds into 18 different real estate projects around the country in 2018.

2) Work longer hours.

A 40 hour workweek is arbitrary given there are 168 hours in a week. If you want to make more money, the easiest thing you can do is work more hours. Hard work requires no skill.

Work 50 hours, and watch your income grow by 25% more than the 40 hour worker. Work 60 hours a week and watch your income grow by 50% or more due to over time.

There's no reason why you can't find another hourly wage job. It's absurd to complain why you don't feel like you're getting ahead if you are working less than 40 hours a week!

Go to France, Greece, Spain, or Portugal if you want to kick back. This is America, where getting your ass kicked every week is a rite of passage!

3) Leverage the internet.

I was talking to my Lyft driver the other day and he says he quit his job at Oracle to be more free, play in a band, and teach guitar one on one. He makes about $38 an hour teaching and asked if I had any other suggestions to how he could make more.

I told him to create guitar lessons online and sell the lessons for a competitive price. Invest the time upfront and leverage a massive demand curve online. The internet never occurred to him, and I wonder if the internet never occurs to many people. It's cheaper and easier than ever to start a business online.

You can set up a WordPress site like mine through my step by step guide for under $5 bucks a month. You never know what might happen if you just try.

4) Develop your X Factor. 

Do your normal job and then do something you love to do even more. Be careful following the advice of “doing what you love” when you've got no money, no experience, and no skills. You've got to pay your dues first. Before you go to work or after you come home, work on your X Factor for at least a couple hours a day.

Test things out, fail with a safety net, and scale up once you've found a viable solution. Leveraging the internet is ideal, but you can always go the old school route to try and make extra income first.

5) Believe that you deserve to be rich. 

IBM’s CEO got a $100,000 base pay raise to $1.6 million in 2015 along with a $3.6 million bonus in 2014, and a $13.3 million stock incentive reward payable in 2018. Meanwhile, IBM's stock went down ~25% over the past two years while the S&P 500 went up 35%, a 60% underperformance! You or I could do just as good of a job as the IBM CEO, for 1/10th the compensation.

Even a train janitor makes $271,000 a year here in the SF Bay Area. Abolish welfare mentality! There's more money out there for everyone.

6) Building passive income streams.

Instead of relying on just one income source, as most Americans do, it's important to build as many side engines of income as possible. If one engine goes down, another engine keeps your ship afloat. Goodness forbid you lose your job.

The wealthiest people in this country have at least five different passive income sources. Here are the best passive income investments to consider by rank.

Best passive income streams

Save As Much Money As Possible

During good times, never extrapolate your income out into the future. You will screw up your financials and end up buying things you have no business buying. The median income by age and sex in America are guides for you to dominate.

I was feeling so wealthy in 2007 that I bought a Lake Tahoe vacation property. Then the world ended, and the value collapsed by 30%. Holy crap! It was a bad decision. I'm up at my Tahoe place now writing you this post after a magical two foot powder dump, but working to live is besides the point.

I'd love for every single one of you to break above the median income and net worth amounts. Our unfair competitive advantage is that we have people who've created great wealth and are willing to share their stories, help each other out through the comments section, and contribute insightful posts.

We are not pontificators. We are doers!

Active Income Is Key

If you're happy with your current financial situation, then by all means, carry on. But if you're not, it's time to get motivated and make a change.

The median income by age and sex should continue to go up. The wage different should continue to narrow as well. At the end of the day, it's up to you to find the best job that suits you the best and pays you the most.

Your day job income and saving rate are the keys to great wealth in the first half of your career. Your investments will be your biggest wealth-driver during the second half of your career.

Active income is key to getting richer. But if you can build enough passive income to cover your living expenses, that is when you are financially free!

Boost Your Passive Income Through Real Estate

If you want to boost your income, then you need to invest in income-generating assets. There is no better income-generating asset that also tends to appreciate in value like real estate.

Thanks to real estate, my wife and I had the confidence to retire early. Today, real estate generates more than $150,000 a year in passive income so we can be stay at home parents.

Favorite Real Estate Investment Platforms

Fundrise: A way for all investors to diversify into real estate through private funds with just $10. Fundrise has been around since 2012 and manages over $3.3 billion for 400,000+ investors. 

The real estate platform invests primarily in residential and industrial properties in the Sunbelt, where valuations are cheaper and yields are higher. The spreading out of America is a long-term demographic trend. For most people, investing in a diversified fund is the way to go. 

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations and higher rental yields. These cities also have higher growth potential due to job growth and demographic trends. 

If you are a real estate enthusiast with more time, you can build your own diversified real estate portfolio with CrowdStreet. However, before investing in each deal, make sure to do extensive due diligence on each sponsor. Understanding each sponsor's track record and experience is vital.

Best Tool To Track Your Wealth

Get a handle on your finances by signing up with Empower. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money. Even at a high income, money escapes like water from a leaky bucket if you don't carefully track where it all goes.

Before Empower, I had to log into eight different systems to track 30+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log in to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.

The best feature is Empower's Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging!

Empower also has an incredible Retirement Planning Calculator. It uses your linked accounts to run a Monte Carlo simulation to figure out your financial future. You can input various income and expense variables to see the outcomes.

Retirement Planning Calculator
Sample retirement planning calculator results

The median income by age and sex has continued to go up as the economy recovers post pandemic.

68 thoughts on “Median Income By Age And Sex In America”

  1. I mean this proves to me the Christina Hoff Sommers’ PragerU video. The graphs prove that they’re relatively no differences in pay when you first start out. Thanks Equal Pay Act of 1963. As time goes on women have children and due to gender roles, they’re suppose to take care of the baby. I am all in favor of equal maternity and paternity leave because then you would see a decrease of the income gap. As gender roles continue to be broken down, you will see a closer resemblance of a 1:1 ratio between income of men and women.

  2. gender gap reports give a totally false sense to people. It gives the illusion that a man and a woman have the same job and are working side by side and this is not the case there are so many factors involved such as the types of jobs men are willing to accept over woman, things like danger and outdoor jobs that men are more inclined to be drawn towards that most woman are just not.

  3. It is my personal belief that the moment you are satisfied with how you are doing, is the moment you stop trying to improve. You should always look for something bigger and better to work towards. Even Jordan Belfort wasn’t satisfied with making $49 million in one year, because it was just $3 million shy of $1 million a week. Most people may know him as “The Wolf of Wallstreet”. He has reportedly made over an estimated $100 million in the year of 2014 alone since becoming a motivational speaker. Goes to show you can always reach higher.

  4. I know that for some Americans things are hard but I wanted to share my story. I am a medically retired Army NCO of more than 11 yrs. I spent time in Iraq and Afghanistan. My wife is still active duty and we did what most would not. While we were in Iraq and Afghanistan we put so much money toward our house and we stached money away. While we were in Iraq we bought a rental property for just under $60k(a condo) that we rented out for just under $600 a month. After we came back from Afghanistan we had orders to Germany were we spent the next 3 years living in on base housing and rented our our 3 bedroom house for $850 and later $950. Today the condo rents for $695. I receive more than $3200 a month plus what my wife makes. We do pretty well despite how others around us with the same career paths struggle. I guess I am saying that its not what you make its what you do with it. For a lot of families in America $3200 alone would be amazing, but it is what you do with what you have that will make the difference tomorrow. When my wife and I got married our combined full time pay was less than $4200 back in 2005. Remember we were always gone, always away from each other and doing a dangerous job with extremely long hours that kept us away from our extended family. In our first 3 years of marriage we spent about 100-130 days under the same roof/same bed. Most of those days were on leave/vacation. My wife is now gone for 9 weeks and as soon as she get backs we move. After that she will be gone for another 6 weeks sometime between Hollowed and Christmas. Then she will start a rotation of 9 weeks on 2 weeks off, and when I say 2 weeks off she will be back home but will still have to work. Life is full of sacrifices and there are rewards for those that are willing to make them. I know that my family is well taken care of even if all these “retirement calculators” are not accurate to peoples situations.

    1. I agree and wish I would have realized that along time ago. Everyone has a different situation. Hope for the best, plan for the worst…. early!

  5. Joshua Feller

    I really appreciate websites that promoting saving rather then earnings, I’m no one special, but worked really hard after a life of 5 days a week of partying at Uconn. . . I started in the financial planning field in 2005 and started my own office in 2009, and now have 20 advisors and 8 staff as part of our operation. . . . I promise you my bad traits are really bad. . .. But the reason I share this is because my good traits, hard work, perseverance, goal driven, leadership ability, and an iron clad process has been the backbone of my success along with an exceptional office staff. . . .WIth these features and a savings driven priority anything is possible. . . (33, 900k annual income, net worth of 4.5 million)

  6. Yes!!! Come to Greece to kick back, work 12-15 hours a day, don’t get paid your overtime hours, get a monthly salary of 700 euros while having a bachelor and a master degree 2 languages and many others.. YOU MORON!!!

  7. Pingback: Tax Penalties For High Income Earners: Net Investment Income, AMT, Medicare | Financial Samurai

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  10. Credit Kangaroo

    Moving is harder than it sounds – while moving elsewhere in the country can almost undoubtedly raise a lot of people’s real incomes, there are so many other factors at play. Family or cultural reasons/obligations can easily outweigh the importance of wealth to many people. Of course, this is a very personal choice.

  11. I’m not sure it’s right to attribute the wage discrepancy to the childbearing conundrum that women face. There are older women, no kids (sometimes even unmarried), who find it hard to break the glass ceiling and get the highest paying jobs. Women are also paid less than men for the same job (sometimes). I have been offered lower salaries (even though before I even interviewed I specified my range) simply because the employer thought they could get me on the cheap because I’m female (obviously I turned them down and told them it wasn’t worth my time). There are employers who purposely look to female candidates as a cost-cutting measure (same work for less money). If every woman turned down those jobs, we wouldn’t have the wage gap issue as much. Alas, most people are not in the financial situation where they can pick and choose their jobs. For those who think it is because women don’t ask for raises as much, I point out that women get penalized more for asking for raises. The same set of gung-ho behavior is interpreted differently when performed by men vs women. The wage gap becomes glaring when the highly-compensated female has a stay-at-home spouse and is STILL getting paid less than her male peers. Personally, I plan to earn as much as possible, save/invest as much as possible, precisely so that I do not have to depend on the whims of an employer. Oh, and “retire” early. Incidentally, the whole Kleiner Perkins debacle is thoroughly puke-tastic.

  12. I’m a 36 year old female, no kids, and my salary is just shy of being equal to the male salary for my age bracket. I’m always shocked by how low the median salary is; I definitely feel like I should be earning more at my age (and am working on it!).

    I have mixed emotions on the salary gap. I think women leaving the workforce to have children definitely contributes to the gap. I think some of it is the choices women make in careers. But there are also still a lot of male dominated careers. I work in construction (as an accountant), and it’s definitely a hard industry for women to break into, especially if you’re considering an upper level position. Most of the men in our office have been hired in at higher paying jobs with zero experience, simply because they’re men, and happen to know someone. As a woman, they expect you to have a boat load of experience to even be considered. I was once told I wouldn’t be considered for a position because I didn’t play golf. Mind you, I met all the qualifications for the actual position, and other than planning an annual golf outing, golfing wasn’t one of them. And I used to be an Event Planner, who planned countless large corporate events. I could plan the hell out of a golf outing!

  13. The problem I see here with the data you provided is this looks like a solution looking for a problem. Your analysis (or the census bureau’s actually) does not break it down by experience, age or career choice. Heck yeah a computer programmer makes more than a elementary school teacher (should they is a different discussion) but look at those career fields, and they are almost 80-20 split (male dominated being the programmer, female dominated being the school teacher). So what are you trying to point out? The 401k savings chart that was more of an eye opener for me as I would have assumed the opposite (however marriage status was not zeroed out of the equation).
    I believe in equal rights and equal pay for all, but if you want to work on it, you must show numbers that are not distorted to fit a narrative. In my industry, IT consulting, you get paid by the job, and for your experience. The more experience, the more the money. My female counterparts, who are similarly educated, make about as much as I do. They have a few less engagements than I do typically, thus less exposure. However if they have the experience the customer is looking for, same pay, no questions.
    Some people have brought up paid time off for having children (single or both genders). That is fine, if you want a 10% pay cut. That is exactly what Europe has done. In America we get paid more than almost any other country on the planet, but get the fewest benefits. However when you start looking overseas, they get paid less but get more benefits. The point I am trying to make is that it is all a trade off. You want 3 months paid leave for child birth? Okay everyone at the company takes a 10% paycut (just like insurance, since your paycut is paying for those having kids).

    1. Good point about female or male dominated occupations and the differences in salaries.

      It’s literally like 80% male software engineers here in SF, and that is of course, one of the highest paying jobs. Finance jobs are also heavy towards makes too.

      1. It’s easy to forget this, but we live in a capitalist society. The #1 determinor of your income is not age or gender, it’s your education level and what your profession is. Men may make more on average, but men usually put in longer hours than women too. A lot of men often negotiate their salaries/hourly rate more too.

        Women are not victims of some grand chauvinist conspiracy, it’s just a fact of life that men are valued more in many companies. There’s also always a risk of a female employee getting pregnant and leaving.

        Is it sexist that men make more in many professions than women? No, because there are logically valid reasons for it. It’s not “because they are women” that they make less.

  14. I’ve heard similar things from female colleagues in my profession. During school they were very motivated to get the best grades and land the best job out of school, but once a child comes into the picture, working part time, or not at all, suddenly becomes a viable solution. I see nothing wrong with this and I feel finding a “solution” may not even be necessary let alone possible.

    1. As an ambitious 31 year old female considering having a child soon, I have to agree with this. Most women still want to have children, and somebody has to care for them when they are young. Sure fathers can help, but mothers are fairly irreplaceable from conception until age 1-2 for care and feeding. Priorities shift away from work and toward family for a reason. Because it matters and most jobs don’t. Call it biology or just being a rational/intuitive/responsible human being.

      I’m not saying all moms need to stay home, but if it isn’t the mother caring for the baby then it’s likely to be a female nanny or daycare worker – which just shifts the “problem” of income equality from higher paid women to lower paid women.

      I’ve worked hard for a decade and out-earned a lot of men in my male-dominated career, but I also specifically picked a more flexible job (banker) than I otherwise wanted (attorney) and saved and invested aggressively because I want and anticipate taking time off and/or working fewer hours each week than many of my 50+ hour workweek professional peers.

      Women pick lower paying and more flexible fields on purpose in order to accommodate motherhood (and also due to some gender differences in preference and talent). Nursing and teaching are prime examples. This may be one reason my 401k is bigger than my (older) husbands too – I consciously wanted to front load my retirement savings because I never expected or planned to work for 30-40 years straight.

  15. I agree gender pay equality is a big issue here in our society, but just like all the other inequalities nothing will get done. I agree you must bring more value to receive more compensation. I currently spend about 5 hours a week doing a side hustle, and I should probably increase it.

  16. I forgot who it was at the Oscars that spoke out about getting more wage equality for women. That top chart sure proves we have a long way to go!

  17. Above Average Black

    For now haven’t really been focused on increasing income. Been spending more focus on increasing rate of return. Spend hours a day on it. May one day flip the switch and may decide to focus on increasing income. For me increasing income is more risky then increasing rate of return, however.

  18. I’m a doctoral student currently receiving a stipend, so I answered in the $10-25k range. It wouldn’t be too far from the median if I were still in my early 20s, but 30 is coming up fast.

  19. divalicious

    What can one do if you are a high earning woman with no desire to stop working or scale back after children?
    I am in my late twenties, make good amount of money (well above the above-average net worth by age recommended here). I work in a male dominant industry where most co-workers have stay at home wives and take barely a weekend off when they have a newborn. I would hate to sacrifice my career and income growth potential just because of kids/being a woman. I find having a career fulfilling, giving me a purpose in life, building something, solving problems etc. Can’t ever imagine giving all that up to take care of kids. I would hate my life (and the kids I am afraid) if I had to do that. Also, I would never want to give up financial security that comes from having my own pay check, no matter how much my husband is making.
    Seems like I am in the minority and should feel guilty and ashamed of not having selfless, nurturing, sacrificing nature expected of mothers. Not having children is also frowned upon, most guys serious about marriage wouldn’t date you after finding that out.
    How can a woman then continue to reach highest level of income and career potential despite kids? Especially one who absolutely wants to.

    1. I would say to just keep on going and go for what you want. Don’t let anybody look down upon you for pursuing a fulfilling career.

      There are so many orphans in the world (100 million +) that maybe we should all save a child and adopt instead.

    2. I feel the same way….and I now have two kids. I work a little less now and have a very flexible schedule based on the kids and based on the fact that my work ethic has proven that I can handle it. IN addition, I have a career where my job can be flexible for the kids. The most important part of this though, is the support that I have from my husband. He and I take turns with sick kids, snow days, etc. He helps at home more than his peers. We have a cleaning lady and other help. Do not feel guilty for wanting to work. I love my kids and I enjoy working. I have not accepted other offers that would have me traveling more because I want to spend time with the kids, but I am still working and I do not feel bad about it.

    3. Not wanting to quit working and not wanting kids are two very different desires. Millions of women have full careers and become mothers as well. Don’t let fear of losing your financial independence or of resenting your children keep you from pursuing a family if you do want one. I was in your shoes and invested in rental property and saved aggressively to ensure my financial power regardless of whether I work full time forever or stay home with kids (no idea which way I’ll lean yet but I wanted options!).

      Babies only need full time care for a few years, and that is what nannies and daycares are for if you need or want them. Or you can take a few years off and then go back. I’m in finance and have seen many women do that. They often take a step back in pay, but they all still earn 6 figures (and when you’re in sales, production is all that matters – no one cares if you took a few years off once you’re getting the job done; then you can demand that raise).

      Our lives are long – we have literally decades to work if we want to. You can spend a few years in the middle focusing on family and still earn millions over the course of your life. My mom stayed home with us, and she got a Masters and started her career in her mid 40s when we were in high school. She’s been working for 13 years now and probably will work another 5-10 at least.

    4. I feel the same way but I have never really wanted kids partially because of these issues.

      1) choose the right partner that is truly willing to be 50/50 if you decide you really want kids
      2) nannies and day care (my mom always worked and I always had preschool since 2 yrs old and after school programs or baby sitters ect – and my parents weren’t high earning back then at all and made it work – plus it gave me a great example of 2 hardworking parents)
      3) find a job with a flexible work schedule (for example, I can come in the office anywhere between 6am-10am and work my 8-9 hours) – or if you are in healthcare for example work the opposite shift as your partner so someone always stays home with the kids
      4) as you get older (I just hit 30, you’ll start to date men who already have kids so you wont feel so pressured to have your own/have his kids cause he will already have one)
      5) simply decide you don’t want kids and what other people think/want isn’t their business

      number 4 & 5 worked for me :)

  20. Let me get this straight. You clearly explain why there is a supposed “gender pay gap” with a rational explanation. And then you imply it somehow “needs to be fixed”? The you are available and the more experience you have and the more work you do, the more pay you get. It’s as simple as that. Whatever reason you have gaps in your work history, less experience than others, or less availability… is not relevant. If you spent years out of practice, raising children at home, how does that give the employer any value? Why would I pay for someone with less experience the same as someone with more?

    And no, paternity leave wont’ change anything. Why? Because men like to work. It is in our nature. I will take years off of work when I am dead. Until then, I will work – whether for someone else or myself.

    Further, if it’s okay to take lots of time off because you squirted one or two out and the world and employer must accommodate you, then why not for people who decide to spend years traveling? Why should they get short shrift, just because the reason they were out of the game is different?

    1. Why would you assume a woman who stayed home has less value? I think some people don’t realize that a man or woman who has stayed home could acquire some serious skill sets that would be advantageous to the Work place. MANAGING their families finances, schedules, technology and outside networking seem to be relevant work experience to me. This is not to mention that they’ve been at a job that is twenty four seven and that their “employees” actual lives depend on their performance. They also can demonstrate the ability to learn just about anything amidst a chaotic storm of BS constantly surrounding them. Employer’s simply need to be reminded of this during an interview. If they have respect for women with a backbone, they’ll listen. If they think strong women are just B@&$’s then they will not and I see this as a huge issue. We remind them of their wives and they don’t want to be outshined at worm too.

  21. I am not surprised about the wage gap, and I am not bothered by it. When I was younger, I was a career woman, never thought I would want to be home with my kids, and was outraged about differences in pay between men and women. Now I am in my mid-thirties and have two kids— I don’t care at all about my former career or whether I can rekindle it in a few years. I know I should care, but I just care about my kids more – plain and simple. I can see how my life long earnings will be impacted and I will probably never be able to make as much money as my husband. I am guessing that a lot of women feel this way, and that is reflected in the charts you posted. That being said, I will definitely be heading back to work in a year or two, mainly because I want to remain self sufficient and I don’t really like being completely dependent on my husband.

  22. Gen Y Finance Guy

    The internet is the ultimate gift to human kind. It has infinite scale-ability. I really like the advice you give to people to start something on the side while they are fully employed until they know they have a winner on their hands.

    There is a quote from the podcast Side Hustle Nation that brings this home:

    “Your 9 to 5 will make you an income, but your 5 to 9 will make you alive”

    It think it is sage advice to master the work/passion blend until you can afford to make the break.

    I always feel so out of touch with reality when I see these kinds of stats. It just reminds me how fortunate I am.


  23. BE Pennypacker

    I like the idea moving to an area of the country with a low cost of living and telecommuting to a job that pays San Francisco wages. Either that or live somewhere cheap and start your own internet business.

    1. Most big companies don’t fall for that. Moving out of the bay area to telecommute from the midwest? Great! Enjoy your salary adjustment to be inline with regional pay grades!

  24. I’m not surprised to see the salary gap but it would be interesting if they take out stay-home moms and part-time workers’ salaries. I think the gap would narrow.

    While saving as much money is important, you will eventually reach a point where you can’t cut back on expenses. This is why it’s just as important to earn more money.

  25. I think one of the big reasons women make less on average is that they don’t ask for raises as often as men.

    How many times have men come home from work and their wife is in one of those moods? Sometimes it take days before they finally tell you what’s wrong. When they finally tell you what’s wrong you ask, Why didn’t you just tell me this from the beginning? If I’d had known what is wrong I could have fixed it. Their reply, You should have known what’s wrong.

    When my wife was working she applied this same logic to work. She expected her boss to notice all the extra work she did and reward her accordingly. She resented having to ask for a raise, even though she would always receive one when she asked.

    As a male business owner I can tell all of you ladies that most men are not as perceptive or enlightened as you think we should be. Ask for a raise! you’ll probably get one.

    1. I agree with Bill and think the single biggest deterrent for me in earning more money is not having the guts to ask for a raise.

      Also, I don’t think that paternity time is a solution. Most big law firms in NYC and in their satellite offices now offer equal paternity time, but if a guy actually takes more than a few days they are committing career suicide. I think at least in the legal field, pay is pretty lock-step and fair.

      Two solutions – first, if you are a high earner, hire a nanny. Second, I think the state has an interest in providing high quality preschool. Preschool can change a child’s entire life trajectory, especially for children who are growing up in difficult circumstances. We will benefit from having a more successful workforce when we are retired. This one change could make a huge difference in the actual lives of low-income parents, especially single mothers.

      1. Thank you! For God’s sake, so many moms are torn between going out and working to pay for childcare or stay home and resent their husbands and (God help me) but their kids too. Most women I know would prefer to keep a good eye on their family when their home but we also want to work bc many of us cannot really completely depend on our husbands to take care of them and the children’s financial future. I don’t say this with disrespect but I really do believe, as one commenter said, men just aren’t programmed to think about the kids as much as the females.
        I also know one thing is being left out of this equation. Children these days are being born with disabilities we actually know about and yes, for various reasons it is more often. Mother’s like myself have a very difficult time finding a job in which they can have the freedom to attend to the care (even if it’s just to oversee those caring for these sometimes volitale or fragile) kids. This is a must bc if WE don’t do it, who will? The next generation is going to look and act VERY differently than the past generations. Have any of you visited an elementary school lately?
        I have a twice “exceptional” kid. Super intelligent, ridiculous IQ, but not so great with the social skills. My daughter is very socially intelligent but is a bit of a later bloomer, still really smart, just in different ways.
        Another thing not spoken about is the expectations of parents in society and schools. It’s really ridiculous. So at this point where does one turn? I’m a hard worker so I have two side gigs and the management of my son’s Medical Care and Schoalistic future, all of which take daily attention, I’ve also got a daughter who I have to care for and a stupid house to “manage.”
        I’ve already got two side gigs. When the heck am I supposed to work more?
        I would rather have a full time gig, with benefits that allows me to work when I’m at my best, sometimes that’s at five am sometimes it’s at noon. I realize there are more out there but they aren’t your average for sure.
        Our country AMERICA- get out there and make some $-
        needs to put more into taking care of its kids so mom’s are on a level playing field. It’s absurd we don’t have paid for preschool. It’s leaving our kids behind and our mom’s too.
        We also need to have a better special education system and a better screening system to identify children’s needs, along with after school care that is appropriate and not so damned expensive.
        If any of this were to happen we would see waaaay more moms with bad hair cuts and better jeans go back to work and make some mad cash.

  26. mysticaltyger

    I disagree with your assertion that we should have male paternity leave. It just creates more perverse incentives such as:

    –Employers won’t want to higher younger people. Europe has super high youth unemployment. There are a number of reasons for this, but generous parental leave is likely at least one factor. Young people can’t get jobs, so they don’t have kids….which leads to Europe’s super low birth rate…..which hurts their economy even more….vicious cycle of unintended consequences feeding on each other

    –You actually hit on something when you mentioned biology. Men are biologically wired to not worry about the kids as much as women do. It’s evolutionary biology. So when men get paternity leave, they’re off doing side jobs instead of watching the kids. So you haven’t solved the pay gap at all.

  27. According to Jessica Valenti, author of Full Frontal Feminism, “For every year a woman in her twenties waits to have children, her lifetime earnings increase by 10 percent.” And last year Forbes reported, “Women in their 20s without children out-earn men by as much as $1.08 to every dollar.”

    I can certainly attest to this, as a 25-year-old, having advanced much further in pay and overall career path than my peers who started families early in life. There are many, many reasons why I choose to live a childfree life, but the hit to my income and career growth potential is one of the biggest.

    However, most women are not interested in the childfree life, and I don’t believe that they should be penalized for it. America needs to provide paid maternity leave, because it is damn embarrassing that we are the only developed nation not to offer it. We also need to encourage more women in STEM, so that the occupational gender pay gap narrows.

    This is not a female problem, and certainly not a “biological problem.” It is a societal problem, and we all need to do something about it.

  28. Brian @ Debtless in Texas

    This is an awesome overview and I completely agree that we all need to do more – especially with the bs gender wage gap. Thankfully, my wife is not held down by it and makes more than I do.

    Thankfully, we are fortunate to be well above the mean in household income and salaries for our age. I would think that they would be higher, but then again I learn something new every day. Working in tech kind of skews one’s perception of what the rest of the country’s financial situation looks like.

    I think that everyone reading has the ability to cut spending and increase income to a level that pushes their net worth higher. Consume less, invest more. All it takes is motivation.

  29. Wall Street Playboys

    “where getting your ass kicked every week is a right of passage”

    Absolutely fucking love it!!!!

    Since when did america become an “accepting” place of mediocrity !!

    No, no, no.

    You should be american. Be the best *you* possible.

    None of this “accept my laziness as a good thing”, no way! If you’re american, you grab your belt buckle and go for the jugular.

    The money is out there. It has your name on it.

    TAKE ACTION and claim what is rightfully *yours*.

    Add value, change lives = boom $$&

  30. Is there data for women with no kid? I imagine the pay gap would narrow somewhat. Having a kid is a big change. Life is much better if one parent can stay at home to take care of the family.
    I agree about the 401k. Women really need to put more in their 401k because they live longer.

  31. It does not surprise me that women put more into their 401K. Women live longer than men, and are more often the one staying home raising kids and will not contribute as much to social security funds during those years.

    1. Interesting point. However, how do you think this would fit in with the fact that women out-contribute men at lower income levels yet at higher income levels this reverses?

      Personally I think it would be interesting to see average 401(k) balances of men/women broken out by age brackets. I suspect that we would see something similar – women out-contributing men at younger ages and the reverse as people get older!

  32. Working more hours than 40, being paid for 40 hours, is a fool’s errand. Not only do you dilute your hourly pay by each additional hour worked as a salaried employee, but you’re very unlikely to get anything more than a pat on the back, more work, more stress and therefore less time and energy to work on your “x-factor” as you call it.

    I’m much more impressed with someone’s ability to mange their time by working efficiently than “hours worked.” Someone who has a balanced life is likely to stick around longer and not be sleeping in their cubicle for the first 2 hours of the day to log more “hours worked.”

    I know you’ll ask Sam since I’m a regular reader: I’ve been a programmer for 8 years, make over 100k.

    1. Ah, but I’m talking about the MOST BASIC thing one can do if you are making an hourly wage. Just work longer. And a lot of contractors/freelancers/hourly wage folks get extra pay for “overtime.”

      Of course it’s based to work less and make more. But at the very basic level, people can just work more. And even if you don’t get directly compensated, doing more elevates you for more raises and promotions down the road.

      1. ah yes, in the case of working hourly makes total sense. I would disagree that working more, even if you do get a better promotion…its still better to spend the time on a side hustle, could end up panning out way better than 5-10% bonus, but might not…leaving you still with a new skill set.

        1. Working more hours includes working on a side hustle. I’m not just talking your primary job.

          Although, there is a huge correlation with those who get paid more and promoted faster working more. Are you going to pay someone who punches in at 8am and leave at 5pm? Or are you going to pay and promote someone who punches in at 7am and leaves at 8pm if you had to choose between the two?

          We had to choose all the time, and 8 times out of 10, the harder worker always got the nod. I’m talking from an investment banking perspective.

          1. OH, I see. I didn’t realize you included a side hustle in the daily hours worked. Yeah, most people work WAY too little in that context :D

            I personally wouldn’t look at hours worked and would try to find a performance metric to compare the two, as I’ve known people who would literally sleep in their office to log more hours worked. But, if time in/out is your only metrics then it makes the choice easy.

          2. IMO, any manager that says “oh this person works 11 hours/day so let’s give them the promotion, raise, etc. over the 9 hours/day” is BLIND. I’ve lost count of the number of people around my office who come in early, leave late, work long hours etc. and yet get no more work done than people who work closer to the standard 9-5.

            If you need to work 11 hours to cover the work that others do in 9 because you are less efficient, not as smart, less experienced, etc. and are willing to do so, then great for you! However, that does not mean you should get extra brownie points.

            Usually this is not the case though – most of the time the long hours folks are not even producing the same output. I often find that these people always find an excuse of why they are busy or why they can’t do that or why they really need you to take something off their plate. It’s almost like they spend that extra two hours convincing the world that they have SOOO much to do today.

            1. May I ask whether you own your own company or manager others?

              I’ve found that often times those who say working longer is a waste are the very one who aren’t willing to work longer and see others who do get ahead!

              Please correct me if I’m wrong!

      2. I agree. I make a decent salary for my age (30 yrs). I continually get raises for added on job duties to my salaried position in addition to working in real estate as both an agent and investor (landlord). My salaried job still covers all my bills including my mortgages on the rental properties and I can save 2000-2600 a month to reinvest. So its not just working “more” hours at a salaried job but thinking of other ways to “make more” but extra “work”. I don’t invest in 401k or retirement programs though. Why when I can make an extra 6k in profit annually on just one small investment property and have continuous cashflow into retirement.

        I also agree that a big portion of the gender gap is because many women, including highly intelligent and once career tracked woman, on average focus more on the household and kids once they get married. I am a female and see this happening to a majority of my friends, coworkers, college buddies (and all my friends went to prestigious universities). Either they get stagnant in their careers and are too burnt out by the “double shift” to pursue their “xfactor”, put in extra effort, act. Plus, so many change their priorities once they have kids or they are the ones that are always calling off when the kid is sick or has something for school (I see it every day).

        The other major factor I believe is that women still tend to be more “pleasers” and tend to ask for raises less than men, men ask for higher starting salaries, and women ask for lesser raises than men ask for.

        I think people focus on the wrong issues when they discuss gender gap. It’s hard to control for biology. Yes, some people stereotype still but the only way to truly overcome that is by proving people wrong and leading by example.

    2. In the case of non-freelancers and non-hourly paid employees, I agree with Gary’s comment and wanted to add, you can actually be labelled as ‘inefficient’ if you work harder / more hours than other people.

      In some industries, which are very competitive and I would even argue cut-throat (possibly as even cutthroat as finance or maybe even more so), people will try to take you down for anything you do out of the ordinary.

      But numbers are hard to argue with. If you can factually measure and quantitate the level of efficiency you have over the regular 9-5 peer, the better you are off.

  33. Done by Forty

    The more I tinker with personal finance, the less enamored I am with frugality and the more I think income is the solution. The ability to invest a good portion of your income is, of course, needed. But if you have to choose where to direct your efforts, direct them to earning a higher income.

    You can become frugal and make cuts overnight. It is low hanging fruit.

    1. I totally agree with you. The more I learn about income and finance, the more I realize it is not enough to save. You can only “save” so much before there comes a point when you need to think of ways to make more.

    2. I’ve started leaning heavily towards this way of thinking too DB40. There’s definitely some benefits in employing a little frugality, including helping you be grateful for what you have, but generating more income has much more positive connotations for me. It means you need to add more value to others one way or another, and it usually requires you to grow as a person. And everyone has the potential to do this, especially with the power of the internet as Sam mentioned.

    3. I tend to agree with this. Of course, it’s important to make sure that spending doesn’t escalate much with an increase in income. That’s a trap that does in so many people. But in terms of effort, I’d say income is where the biggest long-term impact is. That is, both growing income and protecting it.

  34. We have the same problem over here in Germany. I just wanna add 2 more points:

    1. In 40s men do have to earn more than women, because they usually have to cover the whole family. When the wife is not working and stays at home to take care of the kids, he needs to earn at least twice to cover the income loss. If you see that their average salaray is only 25% more, I see a huge overall drop in family income.

    2. Working more hours does not always mean more income. For me, i do not get paid overtime. So I would add here that it is also important to choose for what work you should spend your time.

  35. Taylor Lee @ Engineer Cents

    The gender wage gap issue doesn’t surprise me much. I do think part of it is female participation in the workforce during childbearing years esp. considering the cost of daycare: if Mom makes less than Dad (because she is in a less lucrative industry or if she’s getting paid less due to discrimination or whatever the reason), guess who is going to be compelled to stay home?

    I feel like saying it’s just “biology” is a liiittle bit blaming the victim. Studies have shown that for the same resume, hiring managers will offer less to the female namestamped resume than the male namestamped resume for the same position. And in other countries with much more generous paid maternity laws than the US, and thus able to leave the workforce for longer, women are much more on parity in terms of gender pay.

    I also think a big part of bigger gaps in later years is partially due to cumulative gaps in pay raises. I remember taking a look at the BLS median wage data for women v men last year and one thing that struck me was that the gender pay imbalance in more senior positions is greater than the gender pay imbalance in less senior positions. My hypothesis is that this comes from men getting larger pay raises than women, and those pay raises snowballing over time.

    In general I don’t think the solution to wanting to increase your income is necessarily to work more hours. I know for me at least more hours for the sake of more hours is not more productive and leads to burnout. The best strategies I’ve found have been to: 1. call bullshit on unproductive work, 2. streamline tasks to make work take less time, 3. share those streamlining techniques with others so everyone can spend more time on useful tasks, and 4. use that saved time to do more interesting work. All within normal business hours. Of course, 3 is the big one because if you get the reputation of solving problems that’s the best thing going forward with your career.

    1. I think the gender wage gap is a non-issue (don’t shoot!). Or rather, is no longer as big an issue as it was. Take a look at the left hand side of that chart. The difference is minimal and reading from right (holdovers from older generations when there was a problem) to left (present day, where there isn’t a problem), it is trending toward equal pay. In fact, I wouldn’t be surprised if in 10 or 20 years, the situation flips where 20-something women are earning more than men. Why? Many women work harder than men…from what I see. Yes, Sam is right, the increase in gap over the decades is partially due to some women exiting the workforce to take care of children. That, however, is more and more rare; I’m even seeing more and more stay at home dads…

      Anyway, just my observations. I don’t think we have a problem here. Not sure why the president keeps bringing it up; he (potentially she in 2017?) has bigger fish to fry.

    2. “Studies have shown that for the same resume, hiring managers will offer less to the female namestamped resume”

      Excuse me, but can you cite these “studies”? Such results are impossible UNLESS there is even one company in America who actually offers a salary before meeting a person.

      1. Susan Sample

        Moss-Racusin, et al, “Science faculty’s subtle gender biases favor male students.” PNAS, vol 109, no 41, 2012.

    3. He expanded biology with (life) and stated it is more than likely to be the woman who takes time off from work to care for and raise young kids. this could also include caring for aging parents. Before you get upset actually read the article.

    4. So you say it’s victim blaming?

      Here’s a fun fact, 50% of men have no children, and dedicate their lives to working. Only 15% of women are willing to dedicate their lives to work without children.

      In a way you’re the one blaming men for being nerds receding into the workplace because they’re not eligible as suitable couples by women’s standards.

      Well, what about men accounting for 95% of job related deaths? Men take the worst jobs that no one wants to take. So men’s biology make them fit to take riskier jobs. How’s that for victim blaming, lady?

      So what’s the deal? One gender is supposed to make amends to the other gender for what they do in average?

      Bottom line it’s 100% false to say a man will get paid more than a woman for doing the exact same job, for the simple reason no reasonable business will choose to lose money just so they can hire men instead of women, if that was the case, that hypothetical business would be defeated by competition who hire an all women crew boosting profits.

      All these statistics and playing with numbers always leave aside to provide deceitful info. Never seen a study that includes how seniority affect salary. If men in a company average 10-15 years of experience, and women average 5-10 years of experience, you left quite an important factor. And it’s usually the case that age is casually ignored in these wage gap measurements.

      1. I owned a small consulting company in Montana. I had worked with other people prior to starting my own company and knew what reasonable rates were for the consulting services being offered. The male business owners I met with typically tried to negotiate my rates by half. So I did an experiment. I drafted up two versions of the exact same consulting proposal. Only a few words were changed but nothing of significance. I hired a man with less experience than me to submit the second proposal. His proposal was accepted without any challenge and the written response to my proposal came back with a request at 50% of the proposed amount. This happened more than once so I hired the man to submit all of my proposals at a higher rate than I would have typically asked for and we got every job at that higher rate with no negotiations. I was able to pay him to be the communication touchpoint and I did the work in the background. Even with paying him I was able to take home more.

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