How Much Does the Average American Earn in Their Lifetime?

Wolf of Wall Street with money

Just don’t compare yourself with Jordan Belfort, the real Wolf of Wall Street. | Paramount Pictures

It’s only natural to compare yourself to your friends, family members, and neighbors. As a kid, those comparisons might revolve around athletic ability or the size of a Lego collection. As an adult, though, the comparisons become more economic in nature. You might wonder, for example, how much the average American — your co-workers or friends, for example — have in their bank accounts. And, naturally, you’d note how your balance stacks up.

These types of questions can lead into further inquiries. You might wonder, for instance, how much you should be earning over the course of your entire working career. Should you retire as a millionaire? Or do most people simply scrape by? Again, it’s natural to want to compare yourself to others, but lifetime earnings is an entirely different animal. There are numerous variables that play into how much people earn (or don’t) over decades. And for that reason, it might not be the best way to gauge whether you’re keeping up with the Joneses.

That said, it’s still fair to wonder, and we’ll get into that. First, we’ll take a quick look at what the average American currently has in their bank account. Then, we’ll look at the numbers surrounding average earnings.

How much does the average American have?

Sad man looking at his wallet

Don’t worry if your savings account comes in waves. | iStock.com/SIphotography

We’ll use this as a jumping-off point. The average American has, according to data from bank consulting firm Moebs Services, a little more than $4,400 in their checking account. In 2007, however, that number was far lower at $788. As for savings, a 2015 survey from GOBanking Rates showed 62% of Americans had less than $1,000 in savings, and 21% had no savings account at all. This is important because it shows the economy ebbs and flow. Just because a person is having a good year doesn’t mean next year will be just as fruitful.

There are peaks and valleys, and it all can affect your lifetime earnings. You might get laid off and spend years looking for a new job. That, obviously, has a big impact on how much money you make and how much you’re able to save.

Next: We dig into what the average American earns in their lifetime.

Lifetime earnings

Businessman Hands Giving Cheque To Other Person In Office

Lifetime earnings have a lot to do with education. | iStock.com/AndreyPopov

For data, we’re using a report from the University of Indiana published in 2009. While a bit dated, this report represents the best available information we could find. And the report breaks up lifetime earnings averages by education (which we’ll dig further into on the next page).

Here are the numbers from the report:

  • High school graduates (88% of the population, per 2015 Census numbers): $900,000
  • Associate’s degree (42.3%): $1.1 million
  • Bachelor’s degree or higher (32.5% with bachelor’s, 12% with advanced degrees): $1.8 million

Next: On the following pages, we’ll look at the biggest factors that can influence how much money you make.

The following are four factors that influence how much you make.

1. Education

graduation

Even though more people than ever have a degree, it’ll still boost your earnings. | Imeh Akpanudosen/Getty Images for UCLA

Your education makes an incredible difference in how much you’ll make over the course of your life. The most striking difference is between those who hold only a high school diploma versus those with a four-year degree. A bachelor’s degree will, on average, double your lifetime earnings.

More Americans hold college degrees than ever before, with roughly a third of the population holding at least a bachelor’s degree. It’s hard to say what level of educational attainment the “average” American has, but you can say the overall average lifetime earnings, taking education into account, will land somewhere between $1 million and $1.8 million before taxes.

Next: The role gender and race play in the economic mosaic

2. Gender and race

Wooden hands with money

Average wages depend a lot on gender and race. | iStock.com/Studio_Serge_Aubert

The role race and gender play in a person’s economic opportunities and overall earnings has never been more front and center. We know, for example, that there are stark differences in both the opportunities afforded to people — and the ultimate amount people earn — when separated by race and gender. There are a lot of reasons for this, and it’s a topic we’re beginning to understand on a deeper level.

From a Pew Research survey, here are a few examples of these differences:

  • “In 2015, average hourly wages for black and Hispanic men were $15 and $14, respectively, compared with $21 for white men. Only the hourly earnings of Asian men ($24) outpaced those of white men.”
  • “Among women across all races and ethnicities, hourly earnings lag behind those of white men and men in their own racial or ethnic group. But the hourly earnings of Asian and white women ($18 and $17, respectively) are higher than those of black and Hispanic women ($13 and $12, respectively) — and also higher than those of black and Hispanic men.”
  • “Black men earned the same 73% share of white men’s hourly earnings in 1980 as they did in 2015, and Hispanic men earned 69% of white men’s earnings in 2015 compared with 71% in 1980.”

Next: Your chosen career path or skill set

3. Your chosen discipline

Picture of guests getting key card in hotel

A hotel manager will likely make less than a software technician. | iStock.com/macniak

Besides education, the field or career path you choose may have the biggest impact on your overall earnings. An engineer, regardless of race or gender, will probably out-earn a teacher, for example. You can find endless lists of jobs or careers that pay more than others. If you decide at age 16 that you’re going to be a software developer, you’re almost certainly going to earn more than your friend who waits until 23 to go to college and ends up managing a hotel.

Check out this cheat sheet to the highest-paying jobs, all of which will earn you more than $90,000 per year.

Next: The intangibles — or what you have little or no control over

4. Intangibles: The things you have no control over

Taylor Swift posing in a black dress

Some people are just born with more connections. | Adrian Sanchez/Getty Images

We’d be remiss if we didn’t mention the intangibles — you know, the things you have no control over. You have probably heard the phrase “born on third base” to describe some people’s circumstances. And as disheartening as it is, some people win the genetic lottery. It’s as simple as that. President Donald Trump is a prime example. Or Taylor Swift. Sure, these people worked to get where they are, but if they started from literally nothing and had to face some institutional barriers others encounter, they might not be where they are today.

Unfortunately, if you lose the genetic lottery, life will be a whole lot harder. That’s not to say you can’t overcome any challenges, but you’ll be at a disadvantage.

Next: What you can do to give your earnings a boost

How to increase your earnings in the short term

man being handed money for work

The easiest way to increase your income is to ask for a raise. | iStock.com

Reading these numbers and freaking out? Perhaps you’re stuck in a job that’s not paying you enough — certainly not enough to prepare for retirement or for having a family — and want to stake out a better opportunity. It’s not easy, but it can be done. You just need to start thinking strategically.

Obviously, the easiest and most efficient way to increase your earnings right away is to ask for a raise. Or, if you don’t have a job, find one. If you can’t get a raise or promotion, it’s time to revamp that resume and hit the trail. Even if you don’t want to leave your current job, you can leverage another offer into a raise. Or, if you want to work on the other end of the spectrum, look for ways to cut your spending and save more. Then, put that money to work through investments.

You can even try out some hobbies that can result in new income streams. Or pick up a side gig, such as driving for Uber or freelance writing. There are ways to earn more — you just need to look for them.

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