Most Americans will end up at 55 where they were at 35 — not in vigor or short-term memory, sadly, but in earnings.
Recently researchers at the Federal Reserve Bank of New York announced some grim news: An impressive study of 200 million Social Security records going back to 1978 revealed that working Americans’ earnings plateau in their 40s.
This may seem fine — what would be bad about bringing in that same peak salary every subsequent year? — until one accounts for the eroding effect of inflation.
For example, say a 45-year-old whose annual earnings peak at $60,000 in 1995 still makes in the neighborhood of $60,000 a year in 2015; by then, at age 65, $60,000 will only buy what about $38,000 bought in 1995. In terms of buying power, it’s like receiving a pay cut of more than $20,000, even though the salary figure stayed more or less the same.
– Business Insider