Bad News if you are a High-Income Professional

Dentists, Physicians and Lawyers’ Pay Projected to Drop by 2033

Your earning power as a high-income professional is only going to decrease going forward. This is the conclusion, after an exercise conducted by tollfreeforwarding.com.

Why is that? It is because the rate of increase in earnings simply is not keeping up with inflation.

This is something I am experiencing first hand in my W-2 job. While informed that my salary for next year will be the same as it is this year, my earning power has essentially decreased by over 3% (based on the consumer price index measuring inflation). In other words, the cost for me to pay for things to live upon went up by over 3%, while the amount of money I take home from my job has stayed the same.

The website gathered the annual mean hourly earnings for a number of careers from 2013 to 2022 from the Bureau of Labor Statistics. By extrapolating this historical data, they forecasted what each job would make every year from 2023 until 2033.

While the actual earnings went up for every career, they did not keep pace with a 2.13% inflation rate, estimated by the Federal Reserve Bank of Cleveland (which I think is an estimate on the low side).

Effectively, dentists’ inflation adjusted hourly rates will go down by $14 an hour between now and 2033, which translates to $28,000 decrease in annual earnings. Conversely, physicians’ inflation adjusted hourly rates will go down by $3 an hour, and lawyers’ $5 an hour.

This does not bode well for those of you who are solely relying on income from your job, even if the Federal Reserve is successful in decreasing interest rates closer to 2%. I previously outlined what this will also do to your retirement accounts, with a $2-3 million portfolio not really going to amount to much going forward.

These sobering facts are why it is absolutely essential that you do not solely rely upon the earnings from your job to fund your lifestyle and your retirement.

Find additional ways to grow your wealth and earn income, and invest in assets that will keep pace with (or even take advantage of) inflation.

If you want to talk about how you can build and preserve wealth and generate passive income like the ultra-rich, set up a time to talk with me