Here’s how much the average American actually makes in a year

This article is the first in a series of insights into what an Average American life really looks like. What better place to start than by taking a look at the barometer by which Americans have come to measure their lives — their income.

As reported by the U.S. Census Bureau, the median household income in 2019 was $68,703. Household income is often cited as it is closely tied to employment levels, educational attainment, and regional economic opportunities. However, it doesn’t give us a clear picture about what the average individual actually makes each year. For that, we need to look a little closer.

The most recent census information tells us that the median male worker in the U.S. earned $57,456 in 2019; 21% more than the median female, who earned $47,299. With a labor penetration rate of 69% among men and 56% in women, the true median income sits around $52,905.

Why we need to look at the median

To put it simply, income inequality. Although the average household income has only grown at an average rate of 0.3% over the past 20 years, the majority of it has been captured by upper-income households. At the same time, the U.S. middle class, which once comprised the clear majority of Americans, is shrinking. Thus, a greater share of the nation’s aggregate income is now going to upper-income households and the share going to middle- and lower-income households is falling. The mean has distorted the average.

The mean household income in 2019 was $97,973. Well beyond the $68,703 earned by the median household.

By looking at specific percentiles of household income, we see how quickly the gap starts to develop beyond the median point. The difference in income between the 25th percentile and the 50th percentile is $34,099. While this is a significant difference, it is much smaller than the gap between the 50th percentile and the 75th percentile — $55,180.

The gap continues to accelerate the further north of the median you go:

Top 10%: Household income of $200,968

Top 5%: Household income of $270,358

Top 1%: Household income of $531,020

The median income at every age

While we found the median U.S. income to be $52,905, it takes a while before the average person makes that much. In fact, it isn’t until after age 34 that the average American should expect to be making more than $50,000 per year.

Here is the median income reported by the US Bureau of Labor Statistics, depending on age, for the year of 2019:

• 16–19 years: $26,364
• 20–24 years: $31,980
• 25–34 years: $46,436
• 35–44 years: $58,916
• 45–54 years: $59,956
• 55–64 years: $60,216
• 65+ years: $54,028

The average American earns $52,905. But that’s before taxes.

Here’s how much a single-filer taxpayer actually takes home:

New York, NY: $39,924

Miami, FL: $44,044

Los Angeles, CA: $42,255

Chicago, IL: $41,538

Portland, OR: $40,188

Honolulu, HI: $40,702

Columbus, OH: $42,117

Kansas City, MO: $41,760

Las Vegas, NV: $44,044

Dallas, TX: $44,044

Jackson, WY: $44,044

The after-tax income of the median salary provides a more concrete answer to how much money the average American has available each year to cover their expenses. The largest monthly expense for many families is their rent. The average rent paid for an apartment in the U.S. is $1,234 per month — or $14,808 per year. We’ll take a deeper look at the other expenses an Average American can expect in future articles.

Author’s note: I’ve lived in New York for the last 10 years and can confirm the obvious — $39,924 doesn’t go far here. Click the Follow button and tune in next time as we take a look at the cities an Average American can still actually afford to live in.