Salaries top out at age 40


Whatever you earn at age 40 is likely to be the top of your earning potential. This is one of a gazillion things I’ve learned from talking with Al Lee, the director of quantitative analysis at PayScale.

Al’s data, which is based on the careers of college graduates, is basically that the salary curve for most people in their 20s is very steep. Then it starts to flatten in the 30s, and then you get into the land of the 3% raise. In real dollars, those 3% raises are not actually raises, they are just keeping up with inflation.

The information is grim. But here are some things you can do with it:

1. Go where the men are. To be precise, pay tops out at age 38 for women ($61K) and age 45 for men ($95K). But the difference, according to PayScale data, is not due to unequal pay for equal work. Rather, the difference is that women choose lower paying careers, and women are more likely to take time out of the workforce for kids. So the first thing you can do to prevent your salary from flat-lining is choose a career that men dominate. But it’s not just about industry—it is also about influence. Stick to line-management positions rather than support roles. For example, skip human resources and go to supply chain management.

2. Rewrite your resume. If you’re at the beginning of your career, focus on accomplishments rather than responsibilities. This makes you look like you’re in a higher pay bracket so you will get larger salary increases. If you’ve been in the workforce for a while, cut anything that is more than 15 years old, including the date of your college graduation. Al says that there is no premium paid for two decades of experience because jobs change so quickly that long-gone experience is not particularly relevant. And because age discrimination creates a sort of penalty for more than 15 years of experience. So just leave it off. (Good resume editing tips here, at Quint Careers.)

3. Be a lawyer. Have I ever given this advice before? I don’t think so. Even the American Bar Association reports that law school is a ripoff. But I’m open to counter-arguments—Al says that the only profession where your pay increases after 20 years is in law. Because laws change very slowly, especially procedural law, and so much of being a good lawyer is your on-the-job training.

4. Specialize. By your mid 30s, if you don’t have a specialty, it’s hard to get your salary into the next bracket. You earn more money if your talents are more scarce. (Here’s some information about how to specialize.) Also, don’t give up hope if you have no idea what you’re doing in your mid-20s. As long as you figure things out by the time you’re 30, you will get a premium for 15 years of experience before your salary stops rising.

5. Buy a house assuming you won’t get a raise. Ever. When it comes to houses in the U.S., the average age of a first-time buyer is 33. So people go through their 20s gaining super-high raises, and then people buy a house in their mid-30s with the assumption that the raises will continue. In fact, though, you should buy a house preparing for your real income to remain unchanged until age 55, when it is likely to go down.

6. Recognize your limitations. People eventually start to realize that they are not going to get to the very top. They see that only one out of 100 web designers is the director, and only one out of 50 directors is a VP. Al calls this the funnel effect, and he says many people recognize this and start to trade time for money; people see that chasing the increasingly smaller raises is not as fulfilling as doing a wide range of other things with their time.

7. Focus on maintenance. Most people in their 40s have a lot going on. Taking care of aging parents, young kids, community organizations—all these jobs are falling on people in their 40s, which means it’s not a good time to be trying also to leverage one’s highest earning power. So instead of killing yourself trying to earn more and more, be realistic and go into maintenance mode.

One of the most common but least-talked about career moves is to get to a relatively high spot and then see how much you can cut back in terms of effort and still maintain that level of salary and/or prestige. This seems like a reasonable strategy for a wide range of people. So do small experiments with cutting back early in your career because creating enormous efficiencies takes practice. And a nose-to-the-grindstone work ethic is not the training you need for this type of change.

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115 replies
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  1. Learned Hand
    Learned Hand says:

    I challenge your suggestion that lawyer pay increases beyond 40. I am a lawyer, and 40. Lawyers can be divided in several rough groups: big law, small law, in-house corporate lackeys, and solos. In big firms, partnership decisions are made 7-10 years out, usually by 40. Small law and solos are entrepreneurs whether they want to admit it or not, but like big firms, earning potential is tied directly to hours worked in most cases–to make more you have to work more. That is an inherent constraint on upside. Corporate lackeys are salaried unless they share meaningfully in the ownership of a company. The general point here is that overall, a lawyer at 40 SHOULD be mature enough in her practice to bill at the same rates as a lawyer at 60. There are outliers but they are outliers.

    Of course, none of this takes into account the ever steepening entry costs. I think that the cost-benefit line was crossed for almost all law students over a decade ago. Before you send a law school application, download and read this:

  2. just me
    just me says:

    A couple of macro points:
    In economic booms since bush (including Clinton) the middle class has been left out. – as we are all aware I hope, that ‘the system’ is somewhat tweaked to help wall street at the expense of the rest of country – so a deal that opens factories in china and lets them pour in cheap goods means machinists in Ohio will make less.
    second, immigration and h1-b visa programs have meant wages have been declining, for example a meat packer in the 1990s used to make about 20.00 – it was one of the best blue collar jobs around – now somali refugees etc, make around 10.00 or less. This is not just for blue collar jobs -nursing , and most notoriously, IT are greatly effected by this – IT wages have actually been back peddling – when you have h1b visa workers – who essentially are indentured servants, it depresses the whole market.

    So how much is

  3. just me
    just me says:

    I meant to finish by saying ‘so how much of this is effected by that vs. a general rise in standards of living up until the 1970s?

    Secondly, I certainly regret not working harder when I was younger and making more solid career choices (i am 45 have been out of work for a year in IT, i was replaced by someone younger and cheaper) but I sure as hell would not want to be young today and graduating with 100K in debt – I think that is the next great debt crisis.

  4. Mike
    Mike says:

    It’s a classic example of the “Peter Principle.” you get promoted steadily over 20 – odd years until you reach your level of incompetence; then you get laid off, you are unemployed for a year, and after that you scratch and claw for whatever paid work you can get until you retire/die. Sad, but all too often true!

  5. just me
    just me says:

    Mike, if you mean me, no I held the same position for ten years and was hardly incompetent. But thanks for the gratuitous insult. Do you have anything intelligent or constructive to say? Didn’t think so.

  6. Doug
    Doug says:

    Reading the responses here I just have to point out that Penelope’s advice applies only “on average”. Many people will experience above and below average outcomes based on golden career opportunities that were embraced or setbacks such as being fired or becoming redundant. The outliers are at the very extremes and include those people who get nowhere because they don’t try or are the opposite and become make it through the probability funnel into upper management. This means the bulk of us sit in the 20th to 80th percentiles.

    My point is you may have to accept in the short-term less than average reward outcomes after setbacks – as I have experienced, but you can also get above average rewards in the long term building upon your successes which I am now hitting some 5 years after my setbacks. So don’t sit back and just accept the average – it depends on your goals and how happy you are doing what you do!

    I had to take on some risk to make this happen. I made a career change leveraging off my skills & experience in one industry into another industry that values and translates these same skills and experience). So where I worked hard was in learning about my new industry, not the actual work itself.

    I am also not a specialist, but a generalist in my field. Many specialists get sunk by job eliminating new technologies, law changes, competitiveness problems and so on. Having broader experience means you can embrace change and adapt in an ever changing world – which was my story where all three of the above drivers of change significantly affected my prospects.

    Interestingly, at 47 and despite my setbacks I am looking at well above average salary growth for the next 5 years or so.

    Because 50% of us will be rewarded above average anyway, you don’t have to accept the average! Many of us below the average have chosen other forms of happiness rather than financial reward.

  7. Jim C.
    Jim C. says:

    Point No. 1 — “Go where the men are” — can be restated as “Steer clear of the pink-collar ghetto.” For some reason, career women flock to certain fields. Pretty soon the salaries become lower in those fields.
    So both men and women would be wise to stay away from fields like biochemistry, personnel administration, and some (but not all) school-teaching fields.
    I am not saying that pay in the pink-collar fields should be lower; I am merely pointing out a fact of life. Go where the money is.

  8. Palm Springs Used Cars
    Palm Springs Used Cars says:

    I think part of the reason women don’t negotiate for raises is because they are socially conditioned to accept whatever is coming to them and from an early age conditioned to be “nice”. The majority of women find asking for more money very distasteful and I have heard a few openly refuse to do so and rather taking lower pay. Well, if that’s the case then it’s their own fault they are making less than the men.

  9. foursix
    foursix says:

    This post confirms what I’ve felt in my gut for a while now.

    I didn’t mind being a low-paid generalist when I was in my 20s because I thought I still had time. But now I’m in my 30s and am *still* a low-paid generalist (in part because I took a couple of years off to have babies, and in part because I really still don’t know what I’m good at, what I even could specialize in).

    And every day I feel this tightness in my chest knowing that time is passing and I don’t have it figured out yet. It turns into utter and complete panic if I let myself think about it too much. The other night I was just pacing in my kitchen for half an hour, trying to breathe properly. I made so many mistakes in choosing the education I did, taking the jobs I did, taking the time off that I did, negotiating the salaries I did. But I can’t un-do. I can’t get that time back. I can’t un-make all those decisions.


  10. Phil
    Phil says:

    So you meant to tell me I should be making 95k by the time I’m 45?!?! I’m 42 and not even making as much as women should be at 38 (I’m making $52k). Boy do I feel pathetic!

  11. Name not specified
    Name not specified says:

    This article is very depressing to me. I am 47 years old and I have never earned a high salary in my life, despite earning multiple college degrees. I have upgraded my training recently through project management training funded by a local government agency. Does this mean I am going to continue to live the rest of my life in poverty?

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  13. Anonymous
    Anonymous says:

    I’m 25. I’m pretty good at my job, and I’m an office hardass (not that I’d use politics to step on people, but I’m definitely higher up on the pecking order than most). I can tell anyone that it wasn’t always like this, and I was a meek little man at my last job.

    One thing that pops up, though, that I really could use more experience on is salary negotiation. When I got this job, I had recently lost my last job and was happy to take any job, let alone one that paid a little more ($45K w/ $5K incentive v. $41.5K). A few weeks ago, I got a raving review and my structure went from $45/$5 to $60/$10. Even in expensive New England, this is pretty damn good for a 25 year old.

    However, these rounds of pay negotiation have been far too easy. I could definitely use the scenario where I value my own labor at $X K, and an employer at $(X-2) K, and we haggle around and get to $(X-1) K. I’m more than willing to tell the people signing my paycheck that their ideas suck, but I’m still a bit squeamish about asking for more $.

  14. Iris
    Iris says:

    I received my BA in business management in 2006 while working full-time (I was 26 yrs old). I was lucky enough to be in a position that promoted me several times and my employer paid for my MBA (I graduated in 2011). I’m in my early 30s with a salary of $85K (would like to earn more). I hope to bump it up to over $100K in the next 2 years by moving to another position with another agency. Currently, I work with engineers and my job consist of analyzing their energy reduction program. They hired me because I was very analytical and can do wonders in excel VBA, access and web design. Plus, it also helps that I have 4 years of financial management background since the job requires analyzing/monitoring expenses in utilities.

    My advice is go beyond your major. I’m constantly learning and going to training to improve my skills. Always strive to better yourselves. I’ve just recently attended lean six sigma course and will be asking my boss to pay for a project management course since they’ve just assigned me to do project management on our advanced metering infrastructure installation.

    Also, even if I’m a woman, I’m not afraid to ask for my employer to pay for training or telework or pay raise. I give more than 100% at work and I do an excellent job so I deserve every penny earned. This is the reason why I’m not afraid to ask. Women should learn and have the courage to negotiate.

  15. former reader
    former reader says:

    I saw this in my bookmarks and it looked like a good read, then I remember what you did to your cat and decided to just leave this comment instead. you suck.

  16. Mary
    Mary says:

    Very interesting and useful information. It suck though and I would of though that age brings wisdom and should bring more pay.

  17. Amperro
    Amperro says:

    Unfortunately, not all occupations follow this model. Some careers have a lot of volatility. Scientists in R&D positions are frequently laid off (Major drug companies are slashing entire departments). Physicians often don’t start making money (after overhead, loans, insurance, other costs) until their mid 30s.

  18. DT
    DT says:

    I am touching 40 and can relate to most of the points here. I am an IT specialist and I get paid at the top end of what the industry would pay for this role. The corporate world will not pay more irrespective how hard I work or how innovative I am. I could rise up the ladder for (what I consider) a few pennies more but the ROI is not worth the pain. So I am in maintenance mode  (I mean literally!)

  19. five mistakes
    five mistakes says:

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  20. Sandy
    Sandy says:

    Well thought out article. I agree with most of what you are saying. It is sad to hear that I will top out at 40 but it does make sense. I am in my 20s right now and am seeing the great raises during this recession, but I know it will end.. the big raises.. at some point. So I save as much as possible.

  21. Peter
    Peter says:

    This is funny. If you have a goal to make over $1,000,000.00 in net annual income why the heck would you listen to this terrible advice? This advice is for fearful, no-brain employees, who are scared of getting fired, worried their retirement is drying up, and are running around in the rat race going nowhere.

    Rich Dad Poor Dad is much more helpful in my opinion.

  22. jj
    jj says:

    Well, I’m already in the top 97th percentile for my gender and age at 32. So much for being delusional about being a rock star. People put themselves in a box too much. I do well because I have a passion for what I do. I probably won’t be taking what an employer will pay in my 40s. Rather, the market will compensate me. It’s not about salary. It’s about value. Wake up people.

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    Technology News says:

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  24. Chris
    Chris says:

    In line with Monica and Natalie’s comments above, I’d be really interested to hear how you think this affects career changers. I’ve switched last year from a dead-end job to an entry-level one in another field, one that actually has career prospects. However, I’m already 34 and the last 15 years is an absolute dead loss in career and salary terms. As someone who is starting again, am I still looking at a promotion plateau (at best) when I turn 40?

  25. Keith Gregory
    Keith Gregory says:

    I truly think the problem with graduate students and those with double majors when evaluating their own personal growth,income levels and placement in the food chain is the fact that they focus on their peers and rivals to base their thesis on and not the rest of the population that may not have more than an associates degree from a community college or tech school. I know many people who have outstanding academic accolades who chose a field of work far from their studies and earn far less than the top out of 95k per year as a male and 65k as a female as your article suggests is standard top out revenue earned for the make more for doing less University minded individuals of today. Not that these underachievers are not just as bright and driven, artistic and able to enjoy their interests at a high level of intelligence but rather they quit caring about the competitiveness of it all. Compete, COMPETE, COMPETE… GO FIGHT WIN !!
    O.k that is just fine when you are constructively creating a young human being to be at the top of their own personal abilities or a soldier who’s very survival depends on no fear domination intelligence. But once that person is no longer placed in a survivalist environment or placed upon a shelf for their parents, peers and younger siblings to admire then what? self destruction, anger, stress murder, drugs and eventual death over not being taught that the need to conquer every person and make a profit off every endeavor you come in contact with the rest of your life may eventually lead to inner turmoil and death of personal satisfaction because other walks of life do not play their hands that way and for some damn reason seem to live a carefree stress free life with friends and family; enjoy vigor and a healthy apatite for life in it’s dullest form. That you seldom see these people fly off the handle over spilled milk and poopy boots, that’s why they made boots, so you wouldn’t get shit on your dress shoes. Props to the Universities, over paid sports hero’s, and multi billion dollar media outlets for over exaggerating the NEED to be the highest paid person in the office the need to be the swankiest secretary , the need to be the women who can control a man with a tight ass and large breasts or a man to have the most beautiful wife even though she is in it for the money and has sex with your neighbor when your out of town. Or the man who only has the best of all things known to man and To be sure to make enough money to live in the most prestigious of neighborhoods so your smart ass kids can sell pot and supply meth to the other kids and you so over absorbed with your primpy damn smug attitude didn’t realize until their was a theft problem or your kid ends up in jail or dead so you can play it off as “it must be the influence of the poor kids in the school” that turned my kid to this. That your well dressed punk of a kid would never be that stupid. I think you all should wake the fuck up, To all those that believe that your education and stature create a better fabric for the rest of the nation to admire, that your thesis on male female burn out syndrome should be placed some where in the Journal Of Medicine as scientific fact. But the truth of the matter is that your education may have created it’s own mind altering superiority syndrome. But again, those people will probably pass it off as “What the hell does he know…he’s just a contractor that drives a pick up truck and doesn’t even own a Landrover his kids wear muddy boots and his wife drinks wine from a box. OMG it must be that family that is destroying everything we paid so much to the Universities to overcome. Think again. It’s not about the money now is it.

  26. says:

    I assume you have revisited your conclusion about becoming a lawyer? The huge surplus of lawyers, falling salaries, outsourcing, etc. have combined to create the worst legal market in 40 years. and pay (after 20 years) is only one side of the equation. The average starting salaries just get lower and lower and the student debt that would be lawyers are taking on just keeps getting higher and higher. I was a lawyer myself. My income finally FINALLY topped out at age 43 but by then I was financially ruined by the student loans I took out to get my law degree because my salary was so very low for years, I couldn’t keep up. And there are thousands and thousands like me. Your argument is like the old argument always made for getting a higher education, i.e, going to college ‘BECAUSE college graduates on average earn $1M more than non-college graduates.’ However, keep in mind that often sited stat hasn’t changed in 30 years while tuition and the supply of questionably credentialed college graduates has skyrocketed. Telling anyone to be a lawyer these days is almost always bad advice. The pay after 20 years MAY be there for some, but you’re putting the car before the horse: The JOBS aren’t there. Geeze. Pick up the Wall Street Journal for crying out loud!

  27. Bill
    Bill says:

    Respectfully, another perspective suggesting that the “peak at 40” theory may be outdated and argues that the current age range, especially for those who are more educated in higher-paying professions, is between 45 and 55: Note, however, the very important qualification that the author I’m linking to here is in the UK. Although I would need to do more “homework” to come to a firm point of view on this issue, I am tending to agree in principle with those above who are suggesting that the PayScale study may be prone to statistical overgeneralization.

  28. john
    john says:

    Wow, this article is for a resignated average person. I liked the stats you posted, but your main message is for losers. Really. Your way of thinking is obsolete.

  29. Cinthia Milner
    Cinthia Milner says:

    Do you have any advice for the women who put careers on hold to stay home with kids, and then got dumped by the husband at 54? The divorce is already a done deal, so settlement is over. Now, its about earning money. I will work till I drop… 30 years? But, would like to have some sort of career that builds and isn’t just maintaining the bills. I’m a horticulturist, which has never been a high paying industry (though I adore my present job), I am open to switching careers if needed. Since I seem to be part of a pretty, big club of women (who should have had a pre-nup but did not, and I live in NC, which isn’t great for divorce), we’d all love some advice. This is a non-stop subject between us and we all seem to be working a lot but getting nowhere.

    Thanks, Cinthia

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