How Does Discretionary Income Change Over A Lifetime?

HOW DOES DISCRETIONARY CHANGE OVER INCOME A LIFETIME? Where and how we spend our income fluctuates as we move through our lives. Different obligations, such as school loans, home mortgages, and children, require various amounts of resources. Below, we take take a look at just how much our discretionary income changes over time. WHAT IS DISCRETIONARY INCOME? DISCRETIONARY INCOME OVER TIME $22.426 $37,178 $34.825 $39.769 $35.465 $28.859 $40,000 - ... Discretionary income is any income left S35.000 - --. over after taxes and $31 001-............... other normal expenses, such as $25.000 -...... rent, mortgage, $20,000 - .. .... ... ... . . utilities, insurance, $15,000 - ... ... ... . .... .... transportation, child support, food, SIO.00 - and sundries. $5.000 - SO STUDENT YEARS UNDER 25 PROFESSIONAL YEARS FAMILY YEARS 35-44 MID-LIFE YEARS 45-54 GOLDEN YEARS 55-64 RETIRED YEARS 65- 25-34 THE DISCRETIONARY INCOME VS. PRETAX INCOME STUDENT YEARS S20.000 SA0.00 SG0,000 S80.00 ŞIO0.00 $22,426 $25,695 PERCENTAGE OF INCOME THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI ENTERTAINMENT HEALTH CARE EDUCATION TRANSPORTATION APPAREL UNDER 25 85% $1,233 $676 $1,910 $5.334 $1,396 5.4% 3% 5.4% 8.5% 6.2% THE DISCRETIONARY INCOME VS. PRETAX INCOME PROFESSIONAL YEARS SO $20,000 SAL00 SG0.000 S80.000 SI00,00 $37,178 $58,946 PERCENTAGE OF INCOME THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI HOUSING HEALTH CARE EDUCATION TRANSPORTATION APPAREL 25-34 63% $2,504 $1,805 $808 $7,641 $1,871 6.7% 4.8% 2.7% 20.5% 5% THE DISCRETIONARY INCOME VS. PRETAX INCOME FAMILY YEARS $20,000 $40.000 $60,000 $80,000 $I00.00 PERCENTAGE OF INCOME $34,825 $77,005 THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI 35-44 HOUSING HEALTH CARE EDUCATION TRANSPORTATION APPAREL 45% $3317 $2,520 $935 $8.364 $2,346 9.5% 7.2% 2.6% 24% 6.7% THE DISCRETIONARY INCOME VS. PRETAX INCOME MID-LIFE YEARS $O $20.000 $40.000 $60,000 S80.000 SIO0.00 PERCENTAGE OF INCOME $39,769 $80,976 THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI 45-54 HOUSING HEALTH CARE EDUCATION TRANSPORTATION APPAREL 49% $3,176 $3.173 $2.055 $9.409 $1.881 7.9% 7.9% 5.1% 23.6% 4.7% THE DISCRETIONARY INCOME VS. PRETAX INCOME GOLDEN YEARS $20.000 $40.000 $60,000 $80,000 $I00.00 $35,465 $70,609 PERCENTAGE OF INCOME THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI HOUSING HEALTH CARE EDUCATION TRANSPORTATION APPAREL 55-64 50% $2.906 $4,846 $1,003 $8.323 $1,591 8.1% 13% 2.8% 23.4% 4.4% THE DISCRETIONARY INCOME VS. PRETAX INCOME RETIRED YEARS $20,000 $40.000 $60,000 $80.000 $I00.00 PERCENTAGE OF INCOME $28,859 $39,862 THAT GOES TOWARD DISCRETIONARY SPENDING: DISCRETIONARY INCOME: WHERE IT WILL MOST LIKELY BE SPENT TAXI HOUSING HEALTH CARE EDUCATION TRANSPORTATION APPAREL 65 72% $2.062 $4,906 $162 $5.409 $1,068 7.1% 16.9% 5% 18.7% 3.7% Milo SOURCES: BLS.GOV I CENSUS 2010 I ESRI.COM I CONFERENCE-BOARD.ORG