Are you keeping up? Here’s the average income for people between the ages of 35 and 44

Household income – and wealth – changes dramatically with age. Data from the Federal Reserve Consumer Finance Survey They show that households typically see earnings and assets rise during midlife. For families aged 35-44, this is a key stage for building financial strength. Understanding how your household compares to others your age can provide perspective on your financial health — and how to improve it.

What is the average income of people aged 35 to 44, and how does this compare to other age groups

Median household income for ages 35 to 44 was $86,473 in 2022, according to the latest Federal Reserve survey. This is higher than almost all other age groups. Only households ages 45 to 54 earn slightly more, an average of $91,878.

On the other end of the spectrum, the median income for people 75 and older is $49,073, reflecting retirement sources such as pensions, Social Security and withdrawals from savings.

The 35- to 44-year-old age group falls just before the peak earnings phase, and often balances multiple demands on their income, ranging from mortgages, childcare, and college fees. (Averages are used rather than medians to reduce the effect of unusually high or low income.)

What Fed data reveals about income gaps in America

Although the Fed’s survey does not break down income data by education level or homeownership for individual age groups, the results across U.S. households overall reveal clear patterns that likely apply to 35- to 44-year-olds as well. Across all households, the median American income was $70,260.

Education creates wide income gaps

The survey particularly highlights the wide income gaps associated with education. All households without a high school diploma had a median income of $32,430, compared to $117,820 for those with a college degree. In the middle are high school graduates who earn an average of $52,960, and those with some college earning an average of $60,530.

While a college degree “helps you get a foot in the door and signals subject matter knowledge and ability to learn, industry choice and skill sets are becoming increasingly important,” said Tyler Gilley, CFP, a wealth advisor at Halbert Hargrove in Long Beach, Calif. He noted that specialized abilities are often more important than a broad degree in fields reshaped by AI, such as data science.

Home ownership makes a huge difference in wealth

The survey also reveals significant divisions regarding housing status. Families of all ages who own their home earn more than twice as much as renters — $94,040 versus $42,160. Whether you rent or own, monthly payments are a given. However, how these payments affect your long-term finances can vary greatly.

“Home ownership — especially with a fixed-rate mortgage — offers predictable payments, which is a big budget advantage,” Gilley said. On the other hand, rent is subject to inflation and can rise unpredictably, which may outpace income growth and put pressure on financial stability.

Paying down your mortgage principal builds equity and serves as a form of long-term savings, but discipline and maintaining liquid assets and an emergency fund are crucial, Gilley said. He also noted that renting may be a better option in some circumstances, with there being no one-size-fits-all solution for everyone.

Why does net worth tell a clearer story than income?

These income gaps only tell part of the story. What really determines financial stability is how much households hold.

Income shows how money flows, but net worth, the value of what a household owns minus what it owes, shows how money stays. According to the Federal Reserve Bank’s survey, the average household net worth for those between the ages of 35 and 44 was $135,300.

The Federal Reserve defines net worth as the total value of financial and nonfinancial assets — homes, real estate, vehicles, businesses, retirement accounts, stocks, bonds and more — minus liabilities such as mortgages, credit card balances and other loans.

“Two families may have similar incomes, but their financial security can differ greatly based on how they manage spending,” Gilley said.

He said that if you liken income to water flowing in a bucket, think of one household that has a constant flow filling the bucket that has holes in it due to uncontrolled spending and expenses. Compare that to other beds with a smaller flow but fewer gaps thanks to thoughtful budgeting and spending. The last bucket holds more water, leading to greater financial stability and savings.

“The key is not just how much you earn, but how much you keep,” he said.