The wage lifecycle is more complex than you think.
July 24, 2025
Yes, pay starts low in early adulthood, peaks in middle age, and tapers off in retirement. But in between is a lot of nuance.
One would expect people in their 40s to earn substantially more than people in their 20s. But how much more? We wondered how pay varied between different age cohorts, and whether the pay gap between low and high earners widens when people are farther along on their job paths.
To get answers, we analyzed the payroll records of workers in more than 13 million jobs to measure wages and wage distribution across age groups.
Some of our findings matched up with conventional wisdom. Pay, for example, is low for the youngest workers, but dramatically higher for still-young workers who are beginning to climb the career ladder or gain on-the-job experience that reaps financial rewards.
But there were surprises, too. The biggest gap between high and low earners showed up among workers who were at the end of their careers, a time when most people retire but others choose to stay at their well-paying, career-end positions.
Just starting out
For workers younger than 25, a group that aligns roughly with Generation Z, wages are at the low end of the range, with an annual median of around $33,900. This group’s wage distribution reflects the prevalence of part-time and entry-level full-time jobs held by these young workers, who comprise about 9.3 percent of the workforce.
But the pay spread—that is, the difference between the highest- and lowest-paid workers in this cohort—is broad. The pay difference between the 10th and 90th percentile of earners is about $50,300, or 1.48 times the median wage. While many people in this age group work at entry-level jobs or take on part-time work while attending school, there’s a small group of high earners who contribute to the wider distribution.
Early career
For workers in the 25- to 34-year-old cohort, which includes the oldest Gen Z members and younger millennials, the landscape is dramatically different. Median wages are more than double, at $68,700, the largest increase across age groups, as people transition into full-time positions or specialized careers.
At this point, the pay spread shrinks to 1.15 times the median, reflecting more consistent earnings as young workers settle into their careers. This group’s share of the workforce is the largest, representing about 23.0 percent of all workers.
Mid-career
Wages are even higher for workers 35 to 44, a group that includes older millennials and the youngest members of Generation X. The median pay of $90,500 reflects a smaller increase between pay groups than the previous one.
At this point, wage variability increases as career paths diverge. The spread between the 10th and 90th percentile of earners in this cohort widens to 1.36 times median pay as some people advance into senior roles with higher pay while others remain in mid-tier positions or take a different path altogether. This group of experienced professionals comprises a substantial 22.8 percent share of the workforce.
Peak earning
Peak earning arrives for 45- to 54-year-olds, a cohort dominated by Generation X that makes up 20.1 percent of the workforce. The median wage for this group is higher than all others, at $97,600. The wage spread widens to 1.54 times the median, marked by seasoned high earners and people in steady but less-lucrative roles.
Aging toward retirement
As we transition to the 55- to 64-year-old age group, which includes older Gen X and younger Baby Boomers, the median wage dips to $92,800. The wage spread remains stable at 1.52 times the median as people continue steady work in established positions or gradually reduce hours.
This cohort makes up a smaller share of the workforce, 17.4 percent, as people start to leave the labor force and enter retirement.
Retirement – for some
The differences are more pronounced in the 65- to 74-year-old range. The median wage falls to $75,100 and the wage spread broadens dramatically to 1.9 times the median. At this point, some high earners are continuing in their roles, but many others are trading in their well-paying, full-time jobs for lower-wage, part-time, or consulting work. This group makes up a modest 5.8 percent of the workforce as more people retire.
People 75 and older represent just 0.9 percent of the workforce. The median wage for this group is just $40,900, yet the wage spread is the broadest of any cohort, at 3.05 times the median. This suggests that some retirement-age workers still maintain the higher earnings typical of the younger late-career cohort. For most, however, wages are lower, which likely reflects part-time or occasional work.
Conclusion
This snapshot of the wage lifecycle validates conventional wisdom. Wages start low in early adulthood, peak in middle age, and taper off as people enter retirement.
But the data also tells us something about the unique dynamics of each group of workers. We see the potential for economic mobility as younger workers establish themselves, the critical role of seniority in peak earning years, and the varied needs and choices that define older workers’ careers.
Methodology
We used a sample of more than 110 million active ADP payroll records from January 1, 2024, to December 31, 2024, corresponding to more than 13 million jobs. In contrast to the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages, which is based on state unemployment insurance records and therefore excludes contracts, ADP data includes all individuals paid by ADP clients, including contractors. To address uneven pay over the calendar, the annual pay amounts reported correspond to 12 times the average monthly pay over the prior 12 months, or over the duration to-date of the current employment spell if less than 12 months. Thus, an entry from January 2024 reflects pay over the 12-month period ending that month. Pay amounts reflect gross pay as reported by employers, which refers to pre-tax pay including bonuses, commissions, and equity-based pay such as stock grants and options, as well as employee deductions for benefits. Records were adjusted for pay periodicity, such as monthly versus bi-weekly payroll. Partial months of employment were omitted. Observations were weighted to be nationally representative, using information on local employment by industry and employer size from the BLS Quarterly Census of Employment and Wages.
