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Lifetime Earnings Calculator

Created by Wei Bin Loo
Reviewed by Steven Wooding
Last updated: Jan 18, 2024

With this lifetime earnings calculator, you can easily calculate the average lifetime earnings you can earn over your working life. The lifetime earnings figure can help you understand your future financial position and hence is a useful metric to help you make financial decisions. Please feel free to check out our annual salary calculator.

This article will help you understand what lifetime earnings is and how to calculate the average money earned in a lifetime using the lifetime earnings formula. The article will include a real-life example to help you understand this concept and its application.

What is lifetime earnings?

The lifetime earning is the average money that one can earn in one's lifetime. It tells you how much money in total you will receive from working. It can also tell you how much money you might have when you finally retire. You can use our retirement calculator to understand more about this topic.

The lifetime earnings of a person are affected by various factors. These factors can be divided into two groups, namely internal or external factors. Internal factors, such as education level and job performance, are specific to the individual. External factors, such as economic development, have nothing to do with the person.

How to calculate lifetime earnings

To understand the lifetime earnings calculation, let's look at an example. Assuming Candy is a 25-year-old doctor with the following details:

  • Current age: 25 years old
  • Current salary: $150,000
  • Expected salary increase per year: 5%
  • Retirement age: 55 years old

You can calculate her lifetime earnings in four steps:

  1. Calculate the number of years left to work.

    The first step is to estimate the number of years left that you will be working. You can calculate n, which is the number of years left that you will be working, using the formula below:

    n = retirement age − current age

    Hence, n for Candy is 30 years.

  2. Determine the current salary.

    The current salary is the salary you currently receive from your job. Candy's current salary is $150,000. Please feel free to check out our salary calculator.

  3. Estimate the salary increase per year.

    The next step is to estimate how much your salary will increase on average over n. You can estimate this by looking for the average wage increase in the industry that you are working in online.

    Thus, Candy's salary increase is 5% per year.

  4. Calculate the lifetime earnings

    The last step is calculating the lifetime earnings using the formula below.

lifetimeearnings=salary×[1(1+salaryincrease)n]1(1+salary increase)\scriptsize \rm \begin{gather*}\rm lifetime\\\rm earnings\end{gather*} = \frac{salary \times \left[1 - \left(1 + \begin{gather*}\rm salary\\[-0.4em]\rm increase\end{gather*}\right)^{\!n}\right]}{1 - (1 + salary\ increase)}

Thus, Candy's lifetime earnings will be:

lifetimeearnings=$150,000×[1(1+5%)n]1(1+5%)=$9,965,827.13\scriptsize \begin{split} \begin{gather*}\rm lifetime\\\rm earnings\end{gather*} &= \frac{\$150,000 \times [1 - (1 + 5\%)^n]}{1 - (1 + 5\%)}\\[1em] &= \$9,965,827.13 \end{split}

Why do you need to calculate your average lifetime earnings?

Now that you understand what lifetime earnings is, let's talk about its importance. This metric is critical to everyone because:

  • It helps you to make rational financial decisions. By knowing how much you might earn, you will be able to make better financial decisions in your daily life.

  • It allows you to plan your retirement. Understanding the amount of money you might own can help you visualize and plan your life after retirement.

  • It also helps you to decide which insurance you should buy, especially life insurance.


What factors affect one's lifetime earnings?

Lifetime earnings are affected by numerous factors. They include internal factors such as education level and job performance, and also external factors such as economic development and location.

How do I calculate my current salary if I work part-time?

You can calculate your current salary in four steps:

  1. Calculate the number of hours you work per week.
  2. Determine your rate per hour.
  3. Estimate your monthly salary by multiplying the hours by the rate.
  4. Multiply your monthly salary by 52 to get your current salary.

Can my lifetime earnings be negative?

No, your lifetime earnings cannot be negative. Logically speaking, even if you do not work for your whole life, the lowest lifetime earnings you can get should be zero, and not less than that.

What is life insurance?

Life insurance can be interpreted as a contract between an individual and an insurance company in which the insurance company promises to pay out a designated amount of money upon the demise of that particular individual.

What is my salary if I work 20 hour per week for $50 per hour?

Your estimated annual salary is $52,000, based on your current rate per hour and hours worked per week. You can calculate this figure using the following formula:

rate per hour × hours per week × 52

Wei Bin Loo
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Lifetime earnings
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