People at age 25 year olds are likely to make half of 35 year olds. But 45 year olds in the top 1% are roughly equal to the 35 year olds (no real increase).
If you look at age adjusted percentiles, 1% income is much lower than $750K/yr. 30 yr olds making $350k/ are 1%ers, and when they reach 40 or 50 they have substantial investment gains bolstering their compensation.
Wealth is best measured in terms of age. A wealthy 25 year old with only 3 million in the bank is in a very different situation than a 70 year old with 3 million. The difference is 'earning potential' over their lifetime.
Why is someone's age relevant? Whether you are 25 or 72, how much you earn is based on how much value you provide. A 72 year old has 47 more years of life to have potentially capitalized on.
No, I just formed a poor sentence. My sibling said it better.
The reason they don't segment by age is that at the wealth scale we're discussing, the amount accumulated in an average person's life is irrelevant. It's called a 'class' for a reason; mobility is difficult. It's not like "I got a raise, and now I'm significantly ahead." The top 1% is an income of over $350k/year. A lawyer making $150k is just outside of the 5% range.
Why? Someone who starts at 40 is probably earning more than someone at 25. And someone at 40 has fewer years left to support themselves after their 15-20 years of saving are up.
What is the connection between aging and wages? Sure, most people make more money when they get older, but this was looking at ~40 to retirement when people are already at their peak earnings.
I wouldn't take it for granted that the older you are the more you make.
You bring up a good point. When we're talking about wealth, we all seem to ignore age in the process. Age has a huge impact on how wealthy you are.
If you're 25 and you have $2.5M? Yes, you're wealthy since you have 40 years of earning potential on top of your money.
If you're 65 and you have $2.5M? Very well off, but nowhere close to the 25 year old.
Same goes with inequality. If you ignore age, then things really unfair. How can someone have $3M and another nothing? But that ignore the fact that you'll have inequality regardless just due to age. It's not unreasonable for someone who is 65 to have a lot more money than someone who is 25. That's just the benefit of time.
Well sure, when talking about experience. But not wealth. A millionaire living in my city is objectively wealthy regardless of age. I'm not "wealthy" by any means. Despite that, my income is top 1% for my age-group. However the median income for my peers is also barely above minimum wage, so thats not a terribly helpful metric. Knowing I'm in the top 11% regardless of age is far more helpful in understanding how I fit into my local community.
You're looking at one year of wealth creation here, and dancing around the obvious third variable: time. Old people are much more wealthy than young people[1] despite having comparable or lower incomes.
Because 15 years of compound interest in the stock market more than covers the difference in income between a 25 year old and a 40 year old. The 25 year old has enough time to take risks with money, while the 40 year old needs to be thinking more about preservation of capital.
Obviously someone who has been working over 30 years less than someone else has significantly less money than them? Do you think the people in the 65-74 age group had the same $266,400 median when they were in the under 35 age group? Of fucking course not, that's idiotic.
This is a good comparison for this:
https://dqydj.com/income-percentile-by-age-calculator/
People at age 25 year olds are likely to make half of 35 year olds. But 45 year olds in the top 1% are roughly equal to the 35 year olds (no real increase).
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