Median Salary By Age And Sex In America

Median Salary 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 salary by age and sex from the Census Bureau for 2021.

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 2021 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

401k Balance By Sex

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 $61,372 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?

Real median household income in America chart

Strategies For Increasing Income And Net Worth

I hope every single reader on ONIG Financial Blog increases their incomes and their net worths above the median levels over time. 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 2021.

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 2021. Meanwhile, IBM is down ~25% over the past two years while the S&P 500 is 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.

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. 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!

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.


Get a handle on your finances by signing up with Personal Capital. 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 Personal Capital, 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 their 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!

They’ve also come out with their incredible Retirement Planning Calculator that 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

Updated for 2021 and beyond. Stock market volatility is back, while the real estate market in expensive coastal cities is definitely slowing down. It’s time to lock down your finances and stay prudent as possible. Make sure to do a thorough investment checkup and rebalance based off your risk tolerance. 

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