We present 2017 United States data in an individual income percentile by age calculator for every age from 15-80. Enter income earned in (Jan- Dec) 2016 and we’ll estimate where that income fell for that age’s distribution. Our data comes from the Current Population Survey Annual Social and Economic Supplement (ASEC) survey.
Also on DQYDJ: an income bracket article for all workers. Also try the income by household calculator. For net worth, we have a net worth percentile by age calculator and net worth bracket calculator. Also, see last year’s income by age calculator.
Accredited Investors in America Based on Income and Age
Net worth – not income – is the primary way investors become Accredited Investors (although there are criteria considering income). Accredited investors can access ventures capital and private equity funds, real estate crowdfunds like through RealtyShares, and other investments such as franchises and hedge funds.
See our estimates of Accredited Investors by age for more but results vary. Around .52% of households headed by a 25-29 year old are Accredited up to 16.5% for 80+ years old. See our post on the number of accredited investors in America for more.
Source and Methodology on the Income Percentile by Age Calculator
As stated in the introduction, the microdata comes from the ASEC which we prepare and slice in R. IPUMS-CPS from the University of Minnesota’s Population Center collates the data and harmonized it across years. Our methodology for determining who is covered as a ‘worker’ is covered in this year’s income percentile calculator.
In short, anyone who reported working, worked on average one hour per week more, or wanted to work is included in the population. Beware very high or low percentiles for the ages below 18 years old and above 65 years old; there isn’t as much data in the set.
Sarah Flood, Miriam King, Steven Ruggles, and J. Robert Warren. Integrated Public Use Microdata Series, Current Population Survey: Version 4.0. [dataset]. Minneapolis: University of Minnesota, 2015. http://doi.org/10.18128/D030.V4.0.
Presenting Data in Income Brackets By Age
As we’ve done with reinvestment in our dividend reinvestment calculators, we’ve identified age or experience as an oft-ignored lurking variable. As experience is harder to measure, age is a decent proxy. It’s a good bet that if you work a job and are older you have more experience in said job.
When you zoom out to ‘all’ workers, you’re ignoring the very real effect of age on income. As income tends to increase with age and is ‘sticky’ (at least falling), this isn’t right to do. Sure, we do present rolled up numbers in the income bracket post and income percentile calculator – but for comparisons sake, this is a superior slice.
So, if you’re a 24 year old recent college grad… don’t compare your fresh-out-of-college income with the investment supplemented income pulled in by a 50 year old. You should, instead, compare yourself with 23, 24, 25, and 26 year olds – that’s a more reliable and accurate peer group.
Use Income Percentile by Age For Comparions!
So there you have it – the data and the reasoning behind producing this income percentile by age calculator. Age-based income is the measure you should use for comparison purposes. It’ll avoid the weirdness you’ll see in the aggregate stats, and properly accounts for at least some of the confounding variables.
See anything interesting in this year’s data?
Is this total income, or taxable income? Wondering if I should include non taxable gains from retirement accounts.
Thanks! These yearly updated calculators are a major part of why I keep coming back to DQYDJ for more!
You can find a list of income sources here: https://cps.ipums.org/cps-action/variables/INCTOT#codes_section
Beware the limitations of the survey design, though – some forms of equity (RSU awards, ESPP buys/sells, long-dated option grants, etc.) might show up in “interesting” ways by respondents. Don’t rely on any exact numbers through how and when you recognize your equity gains, but compute it a few ways if you’d like to try to see the ‘ballpark’ for a number. One easy comparison may be to take your gross income from your tax return and drop it in; the IRS has its own opinion about when you need to recognize equity and that’s generally when you actually sell it, not if it is still in your account.
Thanks for sticking around! We’ve still got some net worth and income slices for you to enjoy coming up.
I could see how ESPPs could make things a little wonky. For instance, there’s a pipeline company in my city which has a discounted ESPP. You designate how much income you want held out of your paycheck for 1/2 the year, and then are given your shares on day 1 of the NEXT half…
So if you hold a significant portion of your wages from 2H2016, and shares are awarded in 1H2017, with a purchase price of 85% of July 1 2016, I could definitely see that calculation getting out of hand really fast.