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Calculating Lifetime Earnings

Published August 26, 2022

Determining an individual’s lifetime earnings is a complex yet 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 various factors, each having a unique effect on the final total which a forensic expert must consider carefully when calculating a fair and reasonable figure.

As expert forensic economists, The Knowles Group has spent more than forty years working with attorneys and litigation firms across the country to determine economic damage calculations, including lifetime earnings, and providing expert witness testimony on behalf of plaintiffs and defendants alike.

What are lifetime earnings?

The term lifetime earnings refers to the total amount of money an individual will earn throughout their remaining work-life expectancy. Many people are surprised to learn just how much money they accumulate throughout their working life. Yet, even the lowest earning members of the labor force accumulate a small fortune, close to a million dollars, over multiple decades of work.

When an individual is injured or otherwise unable to work due to circumstances outside their control, they risk the loss of some or all of those earnings. A plaintiff who enters litigation to claim compensation for the damages they’ve endured will need to determine their total lifetime earnings, as it’s an important figure required for calculating various damage categories such as lost wages and loss of earning capacity. Determining lifetime earnings and other damages throughout the settlement process is laborious and complex. For this reason, legal teams and their clients often turn to professional forensic economists to provide just and accurate damage calculations used during litigation.

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 educational attainment 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 annual 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:

How to calculate lifetime earnings

While calculating a plaintiff’s lifetime earnings for litigation purposes involves an in-depth analysis of multiple contributing factors, there are more simplified calculations that an individual can complete to determine a rough estimate of their lifetime total earnings. Likewise, an individual can use an online lifetime earnings calculator to achieve the same calculations much faster.

To do so, an individual will need their present gross annual income, estimated household annual income (if interested in household lifetime earnings), their current age, their planned retirement age, and an average percentage for estimated annual raises & cost of living increase (typically average inflation or wage growth rate ranges from 2 to 4 percent).

The formula for determining individual lifetime earnings is as follows

Step 1: Estimate the percentage annual raise and cost of living as a decimal plus 1 to determine the income growth factor (ex. 3% increase per year = 1.03)

Step 2: For each year between current age and retirement, multiply the previous year’s annual income by the growth factor (ex. Year 1 = $36,000 … Year 2 = $36,000 x 1.03 = $37,080 … Year 3 = $37,080 x 1.03 = $38,192.40 … etc.)

Step 3: Add each year’s present annual income predictions considering the growth factor between their current age and the retirement age to determine the forecasted lifetime total earnings. 


Susan, a 29-year-old female, was training as a medical resident to become an orthopedic surgeon when she sustained an injury on the job that significantly affected her eyesight. Due to the nature of her injury, she will no longer be able to complete her residency or pursue her intended career as a surgeon.

Susan is now entering litigation against the hospital in pursuit of restitution for her injuries. To accurately calculate those damages, forensics representing both the plaintiff and defendant will need to calculate her expected lifetime earnings as an orthopedic surgeon.

Factors Involved in Lifetime Earnings Calculations

There are several factors an economic expert must consider when completing lifetime earnings calculations for litigation purposes. Each element is essential in influencing the final calculations and must be well understood to determine a fair value. Some of these significant factors include:

  1. Work-Life Expectancy
  2. Earning History
  3. Opportunity for Career Growth

Work-Life Expectancy

Work-life expectancy is the active duration of time an individual is expected to participate in the labor force based on their current age and the average retirement age for their profession. Additionally, work-life expectancy considers several additional factors, including education, morbidity and mortality, marital and family responsibilities, economic opportunity, professional training, other sources of annual income, and more. The forensic collects this data from statistical work-life expectancy tables routinely published by the Journal of Forensic Economics.


In Susan’s case, the forensic would consult statistical work-life expectancy tables for females with a medical degree. They must assume that she was a healthy, young female who had completed more than ten years of college education and was only a few years from actively participating in the workforce. The forensics will need to consider each of these factors when determining her work-life expectancy.

Earning History

The forensic collects data regarding the plaintiff’s earning history by reviewing their tax returns, W2s, and payroll records throughout their career to project those earnings over the individual’s future work-life expectancy. If the plaintiff is young and their earning history doesn’t accurately represent what their future would hold, an economic expert can use other methods to form accurate projections.  One approach might include reviewing the plaintiff’s education and utilizing survey data of average earnings by educational attainment or (example, a male with a master’s degree in the Seattle area makes X). Another method is to review the individual’s vocation and utilize survey data from the Bureau of Labor Statistics to determine the average earnings for that vocation in their given geographic market.


In Susan’s case, her earning history doesn’t accurately reflect her projected future earnings because she was still in residency and hadn’t begun working in her intended field. The forensics must determine whether to base their future earning projections on her educational attainment and professional training or evaluate her vocation as an orthopedic surgeon.

Opportunity for Career Growth

Another factor the forensic must consider when calculating lifetime earnings is the plaintiff’s opportunity for career growth. While it’s challenging to project future promotions for private sector positions accurately, there may be an opportunity to project promotions or step increases if the claimant works in a trade union or government occupation (where collective bargaining agreement outlines the future step increases). The claimant may have a history of promotional trajectory within the organization or a supervisor may declare the individual’s projected career arc. These career growth opportunities are in addition to average cost-of-living increases or wage growth.


As a surgeon, Susan was not a member of a union. Therefore, it will be challenging to project her future promotions. Regardless, the forensic collaborating with her attorney will collect data that supports the likelihood that she would have been exposed to increased earnings tiers throughout her career. The forensic collaborating with the defending party will likely disregard this data and use average growth statistics.

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 lifetime earnings calculations.

At The Knowles Group, 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.