Question for those late in their career. I expected my biggest raises to be early and at some point to max out and then just keep up with inflation. Has this been your experience? What age did you max out? Have your raises kept up with inflation or are you making less each year when considering inflation as you approach retirement age?
10 replies (most recent on top)
You are correct. You will hit a peak CL level. Your raises will be minimal if nonexistent.
@cw say what?
I’m
Seeing guys max out from all their gaslighting of the business and spending their money for tiger pds moments. How these folks sleep well tonight is beyond me.
Used to be late 40s or 50s you at least had salary treatment that matched inflation. No longer the case. Don't worry about inflation, worry about age based pips.
@ar My original comment only applies if someone receives any sort of salary adjustment. Unfortunately, doesn’t apply to 0% raises :(
But if someone is making 200k and receives a raise or 1% (or $2,000), as long as the items they typically buy have not gone up by $2,000 (food, gas, etc) they can still come out ahead of inflation. Your base pay and spending habits obviously have a direct effect on this math.
Hit early 40s and you ain't getting paid more no matter what your performance looks like.
My salary started lagging inflation around when I turned 40. Subsequently left for greener pastures and my only regret is that I didn’t leave earlier.
No matter how I frame it my 0% raise was a kick in the nuts this year!
@ak wow. Total reframing for me. I had never thought of it like that. Wish I knew who you are - you sound like someone who would be great to know and have lunch discussions with.
I will still have to think about your response but it definitely makes some points with merit. Thanks.
I think a lot of people think about “inflation” the wrong way in terms of actual buying power. And complain they are effectively earning less each year, when it may not be the case.
The true impact of inflation on your finances is not simply a direct comparison between the inflation rate and your salary increase. What really matters is how much of your income you actually spend on the things that are getting more expensive.
If a large portion of your expenses are fixed, like a mortgage that does not change, then only part of your budget is affected by inflation. Because of that, even if your raise is lower than the headline inflation rate, you may still come out ahead if your actual spending does not rise by the same amount.
In other words, if your fixed expenses stay stable and you avoid increasing your lifestyle as your income grows, a smaller raise (lower than “inflation”) can still leave you better off in real terms.