Career earnings -- ever calculate it?

[dude]

Was bored as shit at work yesterday, and was on my employee HR page, which has all my W-2's since I started my career. Hmm, why not add it up and see what my career earnings were? Started at @$38k in my first year, up to $152k last year, for an average of $110,560 annually over my career. My 401k account also tells me what my total contributions are since I started. From that, I calculated I've saved 12.5% of my career earnings into my 401k (not including matching funds). Of course, I saved money outside of that account, but those are the numbers I had readily available.

Anyway, it was a fun little exercise, and I'm curious if anyone else has done it?

[blueeyetea]

If you've ever read the book "Your Money or Your Life", it's one of the first exercises, along with calculating with the value of what you own.   It brings home the fact that there's a big discrepancy between the two, and primes you to find out why.

[fattest_foot]

You can also just create an account on the Social Security Administration website. Granted, it'll be slightly off due to some income being non-FICA (like health insurance). But it's pretty close and that way if you've worked for multiple employers it's a quick way to see your entire work history.

[Zola.]

Can this be done in the UK?

[dude]

You can also just create an account on the Social Security Administration website. Granted, it'll be slightly off due to some income being non-FICA (like health insurance). But it's pretty close and that way if you've worked for multiple employers it's a quick way to see your entire work history.

But if you've got years where you exceeded the SS cap, it won't show your total earnings, just your earnings up to the cap.  On the W-2, you can use Medicare earnings, which is your total earnings (including money you put into 401k, which is not reflected in Box 1).

[Morning Glory]

You can also just create an account on the Social Security Administration website. Granted, it'll be slightly off due to some income being non-FICA (like health insurance). But it's pretty close and that way if you've worked for multiple employers it's a quick way to see your entire work history.

I tried but I got an error message about not being able to create an account for my SSN. Not sure what's up there.

[tct]

I did this recently and found it interesting that my net worth is higher than lifetime earnings from the past 17 yrs.

[wordnerd]

I back-of-the-enveloped it when I read YMOYL for my FI book club. I have about 26% in my 401K. But, if you divide our married net worth by two, I have a bit more than my total earnings. This is due to starting saving at the same time I started my first professional job, a giant bull market in that time (I started in 2010), and some savvy investment moves by DH. In other words, I lucked into it a bit.

[2Birds1Stone]

Yea, I've used the SS benefits site which lists lifetime earnings.

Over the first 8 years of working I've averaged $80k/yr and I have 57% of my lifetime earnings in my investment portfolio (granted some of that is returns).

Fun exercise.

[use2betrix]

If you've ever read the book "Your Money or Your Life", it's one of the first exercises, along with calculating with the value of what you own.   It brings home the fact that there's a big discrepancy between the two, and primes you to find out why.

I read that - and did that step. I’m almost 30 and have saved about 21% of my lifetime earnings. Not a bad number, but for how much I’ve made in my life, it’s a bit petty how much I’ve spent.

[diapasoun]

Yep, I did this after reading YMOYL, too. I have about 10% of my lifetime earnings in investments, about 20% in total assets. They're not amazing numbers, but I'm happy with them, and unless something pops me off my currently sensible trajectory, they should continue to go up. Dreaming of a life where at some point my lifetime investments outpace my lifetime earnings. ;)

[dude]

Yea, I've used the SS benefits site which lists lifetime earnings.

Over the first 8 years of working I've averaged $80k/yr and I have 57% of my lifetime earnings in my investment portfolio (granted some of that is returns).

Fun exercise.

Impressive!  I just calculated mine, and it's 33.3% . But I have a pension coming, so the need to stuff the investment accounts has always been less for me.

[dude]

I did this recently and found it interesting that my net worth is higher than lifetime earnings from the past 17 yrs.

Damn, you must have been getting after it early on!

[2Birds1Stone]

Yea, I've used the SS benefits site which lists lifetime earnings.

Over the first 8 years of working I've averaged $80k/yr and I have 57% of my lifetime earnings in my investment portfolio (granted some of that is returns).

Fun exercise.

Impressive!  I just calculated mine, and it's 33.3% . But I have a pension coming, so the need to stuff the investment accounts has always been less for me.

Thanks! I've managed a 75% net savings rate my past three highest earning years.

Sent from my SAMSUNG-SM-G930A using Tapatalk

[dude]

Yea, I've used the SS benefits site which lists lifetime earnings.

Over the first 8 years of working I've averaged $80k/yr and I have 57% of my lifetime earnings in my investment portfolio (granted some of that is returns).

Fun exercise.

Impressive!  I just calculated mine, and it's 33.3% . But I have a pension coming, so the need to stuff the investment accounts has always been less for me.

Thanks! I've managed a 75% net savings rate my past three highest earning years.

Sent from my SAMSUNG-SM-G930A using Tapatalk

That'll do it!

My employer puts the equivalent of 30% of my salary into my pension each year; if you count that, combined with my own contributions and other investments/savings, I'd be well north of 50% savings. The pension will cover more than 90% of my pre-retirement expenses (for the first 8 years of retirement, then it drops to about 75%), so my reliance on investment income will be very minimal the first 8 years, then will go up after that (but still likely <3% withdrawal). I'm one of the fortunate few, for sure.

[MonkeyJenga]

I did the YMOYL exercise way back when, but I've doubled my cumulative earnings since then.

Including investment returns, but roughly excluding inheritances/gifts, I have 62%.

[MiserlyMiser]

You can also just create an account on the Social Security Administration website. Granted, it'll be slightly off due to some income being non-FICA (like health insurance). But it's pretty close and that way if you've worked for multiple employers it's a quick way to see your entire work history.

But if you've got years where you exceeded the SS cap, it won't show your total earnings, just your earnings up to the cap.  On the W-2, you can use Medicare earnings, which is your total earnings (including money you put into 401k, which is not reflected in Box 1).

I just did this yesterday--the SSA also shows your Medicare earnings, not just earnings up to the SS cap.

But I think the SSA info reflects all earned income, not take-home.  If you compare my lifetime earnings after taxes to my current NW, then I'm at roughly 100%.  If you compare my lifetime earnings before taxes, I'm at about 2/3.

[The_Dude]

Including post college gross pay + retirement contribution benefits then I'm at about 70%, down from almost 75%, at the market highs.  However, if I only look at take home pay after taxes I'm at well over 100%  I'm 17 years into my career.  At the market highs I hit my minimum number to FIRE but for a variety of reasons I won't pull the trigger for at least a few years yet.

[jim555]

current net worth / total unadjusted lifetime earnings = 67%

[Miss Piggy]

I'm embarrassed to say that prior to reading this thread, I did not know there was an SS earnings cap. Thanks for educating me!

(How the hell did I not know this? Wow.)

[fattest_foot]

But if you've got years where you exceeded the SS cap, it won't show your total earnings, just your earnings up to the cap.  On the W-2, you can use Medicare earnings, which is your total earnings (including money you put into 401k, which is not reflected in Box 1).

Crap, didn't even consider that. Having never made over six figures, it's something I'm aware of but never experienced.

Considering the amount of engineers and tech types here though, there are probably a significant number of people who exceed the SS cap.

[jpompo]

That was a fun exercise. Using Medicare earnings as the denominator and the total amount in investment accounts as the numerator I'm at 49%. 33 years old.

[Fomerly known as something]

I'm embarrassed to say that prior to reading this thread, I did not know there was an SS earnings cap. Thanks for educating me!

(How the hell did I not know this? Wow.)

Um, when I hit the cap, I called HR to find out why they stopped taking SS out of my paycheck.

[BTDretire]

I'm an old guy, at 63yrs old I have a more NW than I have in SS earnings.
 I never hit the SS cap, never even got close.

[Travis]

About 25% of my lifetime earnings have been tax-exempt so they won't show up on W2 or SSA forms; however, I can go back and look at old pay charts and manually add it up.  I'll be back tonight with an answer.

[jim555]

About 25% of my lifetime earnings have been tax-exempt so they won't show up on W2 or SSA forms; however, I can go back and look at old pay charts and manually add it up.  I'll be back tonight with an answer.

Just curious, how is it possible to have tax exempt earned income?

[ysette9]

Interesting exercise. My 401(k) balance is 27% of my lifetime earnings. My total earnings is just under our total invested assets as a dual-income household. My husband has earned about what I have, probably a bit more, over his career, so I think that puts us around 50% combined. Very interesting to think about all of that money flowing through our hands and how much of it we were able to grab onto and keep.

[Travis]

About 25% of my lifetime earnings have been tax-exempt so they won't show up on W2 or SSA forms; however, I can go back and look at old pay charts and manually add it up.  I'll be back tonight with an answer.

Just curious, how is it possible to have tax exempt earned income?

My military housing, food, and hazardous duty allowances aren't taxed.

[Travis]

Net worth/lifetime earned income is 67%.  My current month to month savings rate is just over 60%.

[McStache]

As of the end of 2017 and 4.5 years into my career, I was at 66.6% of networth/lifetime SS earnings (in today's dollars).

I started tracking this in my spreadsheet last year along with other social security calcs. It's cool to see how much that percentage has gone up over the past 4 years as I've earned more from work and investments, and saved more from frugality and optimization.

[marty998]

I did this recently and found it interesting that my net worth is higher than lifetime earnings from the past 17 yrs.

Damn, you must have been getting after it early on!

It's an interesting goal that has been discussed before... to keep NW ahead of lifetime employment earnings.

Additional motivation to get those investments and passive income streams up and running.

[cerat0n1a]

Can this be done in the UK?

Not unless you've kept records yourself. You can check your national insurance record online, but it only records which years you made the required payment to qualify that year for state pension, not how much you earned. I'm sure the Inland Revenue kept the data (they would have needed it for the State Earnings Related Pension in the past) but it's not accessible.

Although we're in a country where I've paid income tax at 40% (and a marginal rate of 62% on some income), even a very rough calculation says my net worth is significantly higher than my lifetime earnings.

[use2betrix]

About 25% of my lifetime earnings have been tax-exempt so they won't show up on W2 or SSA forms; however, I can go back and look at old pay charts and manually add it up.  I'll be back tonight with an answer.

Just curious, how is it possible to have tax exempt earned income?

Not sure it would classify as “earned income” however I classify it as that. Every job I’ve worked the last 6-7 years I’ve received a weekly per diem ranging from $600/wk - $1100/wk, all tax free, to cover housing, food, etc. since I work full time on the road, this goes a long ways. It does obviously mean I can’t deduct all these things either, which is fine.

[SnackDog]

Most people start out with net worth near zero and a wage significantly higher than zero.  Thus, early on total wages >> net worth. But over time, net worth rises and then the power of compounding interest kicks in and annual increases can exceed annual wages.  Eventually net worth >> total wages until retirement when wages stop increasing while net worth continues increasing (assuming average returns).

I've worked 20 years.  Net worth = 2.2x lifetime earnings.   Liquid investment accounts = 1.1x lifetime W2 earnings.

I define earnings as basic salary and bonus. I exclude stock grants, 401K match, or other benefits/imputed income.
Net worth includes investments, stock grants/options, real estate, debt, and current cash lump sum value of pensions.

[powskier]

Went and checked my SS and discovered that my earnings for 2016 had disappeared. The strange thing is they had disappeared last year and after do all the necessary things ( calls, send records,etc) they were again credited. It appears there is a glitch in their system.

Anyway..... investments and assets about 35% of lifetime earnings.

[itchyfeet]

I was curious at some point during my spreadsheet frenzy days (seemingly cured for now) and calculates total career earnings along with every other possible metric of savings, spendings, investment returns etc.

What I learned was that I historically spent more every year than I would have thought.
I had also earned more than I would have guessed.

It was an interesting exercise, and something I keep in mind as I approach FIRE and set a post FIRE budget.