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How Much Does the Average American Make in a Lifetime?

Published March 28, 2024

The question of how much the average American earns over a lifetime is not just a matter of curiosity but an essential task required in various legal cases, including wrongful death lawsuits, accident settlements, medical malpractice claims, and more. An individual’s lifetime earnings depend on multiple factors, each having a unique effect on the final total, which a forensic expert must consider carefully when calculating fair and reasonable settlement figures.

At The Knowles Group, we apply these lifetime earning formulas and adjust them to the realities of each individual’s life and career, ensuring that settlements accurately reflect what the individual has lost or will lose. Whether we’re representing plaintiffs who have suffered losses or defendants facing claims, our analysis helps to ensure that any settlement reached is grounded in a realistic appraisal of what was, or will be, lost.

How much does the average American make in their lifetime?

According to research published by the National Library of Medicine and the Social Security Administration, the lifetime earnings of the average U.S. citizen (over 50 years from age 20 to 69) vary substantially, depending on the various factors we will cover in this article, with an overall average median lifetime earnings of $1,850,000 for men and $1,100,200 for women. The study analyzed Detailed Earning Records collected by the Social Security Administration between 1982 and 2008 to determine the gross median lifetime earnings (without controls) and net median lifetime earnings (considering key controlling socio-demographic variables that influence the average American income and the likelihood of college graduation) for both men and women, at five different education levels. These levels of educational attainment include less than high school, high school graduate, some college, bachelor’s degree, and graduate degree.

Despite controls, the study found that higher levels of educational attainment produced significantly higher lifetime earnings at every level of educational attainment. Below is a chart of estimated lifetime earnings (in millions of dollars) by the level of educational attainment for both men and women:
U.S. Social Security Administration, Estimated lifetime earnings by educational attainment (in millions of dollars)

Understanding Lifetime Earnings

Lifetime earnings represent the total income an individual can expect to earn throughout their career, from entering the workforce until retirement. The concept of lifetime earnings is crucial, especially in legal contexts, as it forms the foundation for calculating economic damages in cases of wrongful termination, personal injury, and wrongful death, where the potential future earnings of an individual are a crucial component of the settlement.

Calculating lifetime earnings involves a basic formula that considers the individual’s annual income, the number of years remaining in their career, and any potential for growth or decline in their field. However, this calculation becomes more complex when legal professionals need to account for variables such as inflation, promotions, career changes, and unexpected interruptions in employment. The accuracy of these calculations can significantly impact the outcomes of legal cases, making the expertise of forensic economists like those at The Knowles Group invaluable.

Average Lifetime Earnings by Demographics

The calculation of average lifetime earnings is not uniform across all population segments. It significantly varies by demographics, such as occupation, age, gender, education, and ethnicity. These variations are crucial for legal professionals to understand, as they directly impact the estimation of economic damages in compensation-related cases.

The Impact of Occupation on Lifetime Earnings

An individual’s occupation significantly determines their lifetime earning potential, with substantial variations observed across different sectors and professions.

  • Healthcare professionals, such as doctors and surgeons, are among the highest earners, with lifetime earnings that can exceed $10 million, according to data from the Bureau of Labor Statistics.
  • Jobs in the service sectors, including food service and retail positions, often have significantly lower lifetime earnings, sometimes totaling less than $1 million throughout a career.
  • Technological fields, especially those in software engineering and data science, have seen a surge in earning potential, with lifetime earnings averaging between $3 million and $5 million.

These statistics underscore the evolving job market landscape, where higher education and specialized skills increasingly correlate with greater earning capacity.

The College Payoff, Anthony P. Carnevale, Stephen J. Rose and Ban Cheah, THE GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE

Hamilton Project, Career Earnings by College Major

Site Selection Magazine, Top Location by Educational Field

The Impact of Education Level Impact on Lifetime Earnings

When it comes to lifetime earnings, education levels are a critical determinant of an individual’s lifetime earning potential, creating a clear earnings gradient that favors higher levels of educational achievement, beginning with bachelor’s degrees.

  • According to the U.S. Bureau of Labor Statistics, individuals with a high school diploma earn an average of approximately $1.3 million over their lifetime.
  • Those with a bachelor’s degree earn a significant increase, with average lifetime earnings of about $2.3 million.
  • The difference grows even wider for those with advanced degrees; for example, individuals holding a professional degree or doctoral degree can expect lifetime earnings of $3.6 million or more.

These statistics illustrate the premium placed on higher education in the job market and highlight the economic value of investing in one’s education.

U.S. Social Security Administration, Estimated lifetime earnings by educational


The College Payoff, Anthony P. Carnevale, Stephen J. Rose and Ban Cheah, THE GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE

Selig Center for Economic Growth, University of Georgia, based on U.S. Census Bureau, American Community Survey, 2014-2018 Five-Year Public Use Microdata Sample; IPUMS USA, University of Minnesota

The Impact of Gender on Lifetime Earnings

Gender remains a significant factor influencing lifetime earning potential, with persistent earnings gaps between men and women across various sectors and professions.

According to a U.S. Bureau of Labor Statistics report, women earn approximately 82 cents for every dollar men earn, translating into significant differences in lifetime earnings. Over a career span of 40 years, this gap can result in women earning roughly $400,000 less than men.

Various factors, including occupational segregation, differences in work experience, and work-life balance choices influence the gender pay gap.

U.S. Department of Labor, Median Annual Earnings of White Men vs. White Women  (1967-2022)

U.S. Department of Labor, Median Annual Earnings of White Men vs. White Women  (1967-2022)

U.S. Department of Labor, Median Annual Earnings of Black Men vs. Black Women (1967-2022)

U.S. Department of Labor, Median Annual Earnings of Hispanic Men vs. Hispanic Women (1974-2022)

U.S. Department of Labor, Median Annual Earnings of White, Non-Hispanic Men vs. White, Non-Hispanic Women  (1987-2022)

The Impact of Race and Ethnicity on Lifetime Earnings

As a forensic economist tasked with calculating lifetime earnings to determine damages in a lawsuit, it is critical to incorporate race into our earnings models. The empirical data, like the Department of Labor charts provided below, consistently shows variation in median annual earnings across different racial groups regardless of gender.

Data from the U.S. Census Bureau and various economic studies presented below reveal that Asian Americans typically have the highest median household incomes, followed by White Americans, with Hispanic and Black Americans experiencing lower median incomes. Specifically, over a lifetime, Black and Hispanic workers earn significantly less than their White and Asian counterparts.

These variations are not just annual anomalies. They persist over time and can significantly influence an individual’s potential lifetime earnings estimation. Accurate accounting for such differences is essential to ensure equitable damage calculations in the context of a lawsuit. It is our responsibility to use this data to project earnings as they would have reasonably occurred, considering historical earnings patterns among different racial groups to provide a fair and precise assessment of economic loss.

U.S. Department of Labor, Median Annual Earnings of Men (1967-2022), Categorized by Race

U.S. Department of Labor, Median Annual Earnings of Women (1967-2022), Categorized by Race

The Impact of Age on Lifetime Earnings

Age plays a pivotal role in shaping an individual’s lifetime earning potential. Earnings typically escalate with age, reaching a peak in mid-life before gradually diminishing as one nears retirement.

Insights from the U.S. Bureau of Labor Statistics reveal that earnings experience the most rapid growth from 25 to 34, ascend at a moderated pace through the 40s and 50s, and hit a plateau around the age of 55. To illustrate, median weekly earnings for individuals aged 45 to 54 stand approximately 20% higher than those for the cohort aged 25 to 34, a testament to the accrual of experience, skills, and career progression over the years. However, this upward trend reverses post-peak, with earnings tapering off for those aged 65 and above. This is attributed to decreased working hours, a shift towards lesser-paid positions, or the transition into retirement.

In this context, work-life expectancy becomes integral to understanding lifetime earnings. Work-life expectancy measures how many years an individual is expected to remain in the workforce, factoring in age, health, occupation, and other demographic variables. Forensic economists frequently reference work-life expectancy in calculating lifetime earnings to estimate the total income an individual could generate over their career.

Historically, the 1979-80 work-life expectancy tables compiled by the U.S. Bureau of Labor Statistics (USBL) were a standard reference for these calculations. However, the field has seen advancements in methodology and data collection, prompting a shift towards more contemporary and updated sources that reflect current labor market conditions and demographic trends. While the foundational concept of these tables remains relevant for understanding work-life dynamics, today, forensic economists often rely on updated USBLS work-life tables and other sophisticated models to provide more accurate and relevant estimations of lifetime earnings in today’s rapidly evolving job market.

U.S. Bureau of Labor Statistics, Table 3. Median usual weekly earnings of full-time wage and salary workers by age, race, Hispanic or Latino ethnicity, and sex, fourth quarter 2023 averages

DQYDJ, Salary Benchmark by Age in 2023

U.S. Bureau of Labor Statistics, Worklife Estimates (1986)

The Role of Economic and Job Market Trends

In an ever-evolving economy, several key trends significantly influence lifetime earnings. Understanding these trends is crucial for legal professionals, as they can impact the calculation of damages in compensation-related cases. Here are some of the most prominent trends affecting lifetime earnings:

Shift Towards Remote Work

The COVID-19 pandemic accelerated the shift towards remote work, a trend that is likely to continue. This shift can lead to a broader range of job opportunities for some, potentially increasing lifetime earnings by offering access to higher-paying roles without needing relocation. However, it also introduces new challenges, such as the potential for wage stagnation due to a larger pool of applicants.

The Gig Economy

The rise of gig work and freelance opportunities offers flexibility and the potential for higher short-term earnings. However, these roles often lack the stability and benefits of traditional employment, which can affect long-term earning potential and job security.

Automation and Technological Advancement

Automation poses a significant threat to certain job sectors, potentially displacing workers in industries heavily reliant on routine tasks. Conversely, it also creates opportunities in tech-driven fields, emphasizing the importance of adaptability and continuous learning.

Economic Fluctuations

Economic cycles, including recessions and expansions, play a significant role in determining lifetime earnings. Periods of economic growth can lead to wage increases and job creation, while recessions can lead to job loss and long-term earnings deficits.

The Crucial Role of Lifetime Earnings in Legal Cases

In legal contexts, accurately calculating lifetime earnings is crucial, especially in cases involving personal injury, wrongful death, and employment litigation. For legal professionals, plaintiffs, and defendants alike, understanding the intricacies of lifetime earnings calculations can be the difference between securing a fair settlement or facing a significant injustice.

  • Personal Injury Claims: Accurately estimating the injured party’s lost future earnings is crucial in personal injury cases. This involves calculating lost wages and projecting future losses, which requires a deep understanding of the plaintiff’s potential career trajectory, inflation, and the impact of their injuries on their ability to work.
  • Wrongful Death Suits: Similar to personal injury claims, wrongful death suits require an estimation of what the deceased would have earned over a lifetime. This calculation supports the bereaved family in seeking compensation that reflects the emotional loss and the financial support the deceased would have provided.
  • Employment Litigation: In cases of wrongful termination or discrimination, calculating lost wages and future lost earnings is essential. Legal professionals must consider career growth, potential promotions, and the impact of the wrongful act on the plaintiff’s future earning potential.

Hire an Economic Expert to Determine Lifetime Earnings

If you or your firm require the services of a highly experienced and reputable expert forensic economist, contact The Knowles Group today. Since 1979, we’ve provided professional economic services to thousands of attorneys in state and federal courtrooms across North America, including expected lifetime earnings calculations. We pride ourselves on our objectivity while consulting, completing calculations, and providing expert witness testimony.

Whether you represent the plaintiff or the defendant, we’d be happy to schedule a complimentary consultation to discuss your case and explain how our services can help bring it to a successful conclusion. Please feel free to fill out a case consultation form, and we’ll be in touch shortly to discuss the next steps.

Eric Knowles, MBA

The Knowles Group has been providing professional economic services to the legal community since 1979. The firm has worked on behalf of thousands of attorneys in a dozen states and Canada. Testimony has been provided in both federal and state venues.