So far in this lesson, you've considered several different options for the direction your life could take after high school. You've also learned what salary range you would be likely to reach, based on the level of post-secondary education you pursue. But how can you use this information to make decisions about your own future?
It's a great question to consider now—while you still have time to plan what you'll do after you finish high school. And a good way to start is by comparing the median salaries of today to what they'll be 20 years from now. Then you'll have a sense of how much more money—or how much less—you could make in the future, based on your choices in the next few years. All you need to do is to plug some numbers into the formula below.
Future Income = Current Income(100% of current income + Percentage of Annual Raises)Number of Years in the Future
For Example
These examples demonstrate how to use this formula to predict someone's future salary for a particular job.
Calvin has decided to go right into the workforce after high school. He knows that the median salary of someone with a high school diploma is $37,024 per year. He is curious to know what his salary will be 20 years from now if he gets a 3% raise every year. What will Calvin's salary be?
First, identify the information you already know, and put it into a form that will work in the formula.
Current Income = 37,024
3% Raise Each Year = .03
Number of Years = 20
Then, plug that information into the formula. The equation should look like this:
Future Income = 37,024(1 + .03)20
Finally, do the math that will show Calvin's future income. Click each step below to see how.
Future Income = 37,024(1 + .03)20 |
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Future Income = 37,024(1.806) |
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Future Income = 66,869.46 In 20 years, Calvin will be making $66,869.46 per year. |
Heather is about to graduate from college with a bachelor's degree. She knows that the current median salary for a person with a bachelor's degree is $60,996. Like Calvin, she is curious about how much she will earn in 20 years with a 3% pay raise every year. Use the formula above to figure out Heather's future salary.
Try applying each of these steps on your own before clicking the step to check your answer.
Future Income = 60,996(1 + .03)20 |
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Future Income = 60,996(1.806) |
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Future Income = 110,158.78 In 20 years, Heather will be making $110,158.78 per year. |
Show your skills!
Now see if you can calculate Megan's future salary, all on your own.
Megan is an attorney, which means she has a professional degree. Megan is looking for her first job, and she knows the current median salary for attorneys is $95,472. She wants to know what her salary could look like 20 years from now with a 3% raise every year.
Question
What is Megan's future salary?
$172,422.43
