It’s easy to assume what life might look like for the top 1% of earners in the U.S.— the exclusive tag might conjure images of big houses, luxury cars and exotic vacations. Show
The average American household needs to bring in $652,657 a year to be classed among the top 1% of earners across the country, according to research published Thursday by financial advisors SmartAsset. The report analyzed 2020 IRS data to identify America’s highest earners. But what it really takes to join the 1%—in terms of earnings at least—comes down to your zip code, the findings revealed. Connecticut is the state with the wealthiest top earners, according to SmartAsset, where reaching the top 1% means having an annual income of at least $952,902. It's followed by Massachusetts, which has a threshold of $903,401, and California, where the state's very highest earners earn upward of $844,266 a year. New Jersey came in fourth on the list—ahead of its neighbor New York—with a bar of $817,346. Next on the list was the state of Washington, followed by New York, where households have to rake in $776,662 a year to reach the wealthiest 1%—despite it being America's second-most expensive state to live in. “It’s easier to get into the 1% in New York than it ever has been,” Jaclyn DeJohn, SmartAsset’s managing editor of economic analysis, told Bloomberg on Thursday. The report also highlighted that Southern states generally had lower wealth thresholds than their coastal counterparts. The easiest state in which to reach the wealthiest 1% is West Virginia, the findings showed, where an annual income of $367,582 would be enough to make the cut. It was followed by Mississippi, where households need to earn $381,919 a year, and New Mexico, where the top 1% make at least $411,395 a year. What does it take to feel rich?The top 1% of earners is a group that's becoming increasingly powerful. According to a 2022 report from the Congressional Budget Office (CBO) the richest 1% owns more than a third of all U.S. wealth, while the top 10% holds 72% of America's total wealth. It's a share that's increased over time, CBO data shows. In 1989, the richest 10% of Americans controlled $24.3 trillion in assets. By 2019, that control had increased to cover assets worth $82.4 trillion. While joining the 1% club remains an elusive goal for many, the threshold for feeling "rich" in the U.S. varies wildly between individuals. According to a survey from Bankrate published earlier this month, Americans felt they’d need to earn about $483,000 a year to feel wealthy. Approximately a third of the 2,521 adults questioned said they'd need an annual income of $500,000, and 21% said they’d need to earn at least $1 million a year to consider themselves rich. The study also found that the expectation of what it takes to achieve financial freedom gets higher the more a person earns. For example, people who earned $50,000 or less said they'd need to earn $406,000 to feel rich, whereas Americans who earned $100,000 or more said they'd need to earn at least six times their salary to feel wealthy. “For some, being wealthy might be seen as having the ability to buy things they don’t need,” said Mark Hamrick, a senior economic analyst at Bankrate. “If someone attains wealth along the way, more power to them. That doesn’t necessarily equate to being happier, of course. But it makes many things easier to navigate.” Learn how to take control of your personal finances with Get Your Due, our six-week email bootcamp. Sign up for free. If you’re trying to keep up with the Joneses, you need to know how much this proverbially well-off American family has at its disposal. And that means knowing what the average American household earns annually as well as how much wealth it holds. As you go higher up the scale, the numbers accelerate, with the top 1 percent having much more than the average. Here are the average income and wealth for Americans in the top 1 percent. What is the average wage for Americans and the top 1 percent?The table below provides data on wages of Americans from the Social Security Administration.
Here is how a few remaining categories break down by cohort and year. Dollar figures are in 2022 dollars.Source: Economic Policy Institute analysis of Social Security Administration data Category 2022 2021 Dollar figures are in 2022 dollars. Source: Economic Policy Institute analysis of Social Security Administration data Average wages $61,136 $62,889 Average wages of bottom 90 percent $40,845 $40,928 Average wages of 90th–99th percentile $183,511 $187,609 Average wages of top 1 percentile $785,968 $916,928 Average wages of top 0.1 percentile $2,817,436 $3,707,327 This Social Security data includes any wages, salaries, bonuses, severance and other such compensation to employees, including exercised stock options, which are taxed as earned income. However, it does not include realized capital gains, though they are subject to taxes. So these income figures show how much the average group member receives as earned income. But the higher up the scale you go up, the more likely the member is to have unearned income, such as dividends and capital gains – which are, again, not reflected in this data. Need expert guidance when it comes to managing your investments or planning for retirement? Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals. What is the average wealth for Americans and the top 1 percent?The table below provides data on wealth from the Federal Reserve, including FRED data from the St. Louis Fed indicating there were 131.4 million American households as of 2023.
Here is how the remaining cohorts break down by percentile. Category Total cohort wealth (share) Wealth per household Note: Figures do not add up to 100 percent due to rounding. Sources: Households data from FRED; wealth data from the Federal Reserve, with figures as of Q2 2023 Average wealth $143.72 trillion (100 percent) $1.09 million Average wealth of bottom 50 percent $3.68 trillion (2.6 percent) $55,998 Average wealth of 50th – 90th percentile $44.09 trillion (30.7 percent) $838,634 Average wealth of 90th – 99th percentile $52 trillion (36.2 percent) $4,395,954 Average wealth of 99th – 99.9th percentile $23.9 trillion (16.6 percent) $18,367,709 Average wealth of top 0.1 percent $20.05 trillion (14.0 percent) $1,525,480,469 The key figures here are not only the average wealth per household but also the share held by each, especially at the top. For example, the top 1 percent of households hold 30.6 percent of the total wealth, according to the Federal Reserve. But just the top 0.1 percent own 14 percent of the total wealth, giving them a stunning average of more than $1.52 billion per household. Similarly, while average wealth per household is more than $1 million, the number is skewed much higher because of the vast wealth at one end of the wealth distribution. Don’t confuse high earners with the wealthyYou can measure whether you’re in the top 1 percent in two major ways: income and wealth. Income is the amount of money you earn annually, while wealth is the amount of assets you own. While these categories are often correlated with each other, they aren’t the same. That is, high earners often hold a lot of assets, but they don’t necessarily have to if they spend a lot. For example, the wealthy may have relatively low incomes, say, if much of their wealth is tied up in an illiquid asset such as a house or even an illiquid or non-dividend-paying stock. While they may have a high net worth, they’re unable to generate income from the illiquid asset and therefore must continue with relatively low income if they intend to continue owning that asset. Similarly, high earners generate a lot of money each year but need not be wealthy. Those who spend all of their earnings may not be building any wealth if their money doesn’t go into assets. Those looking to build wealth over time may want to work with a financial advisor or wealth manager to help them find smart strategies to turn income into wealth. Bottom lineIf you’re looking to build wealth, then your decisions must reflect that fact. While those with a lot of wealth can turn it into income, those with high incomes but little wealth have just one way to join the ranks of the wealthy – be a disciplined saver and get your money working for you. Who are America's 1%?But being counted among the highest net worth individuals can be much "easier" in some countries than it is in others. To belong to the 1% in America, your net worth would have to be about $5.8 million or higher, according to the new Wealth Report from real estate company Knight Frank.7 thg 3, 2024nullNet Worth to Be in Richest 1 Percent: Wealth Report | Moneymoney.com › richest-1-percent-america-other-countriesnull Who are the top 1% worldwide?Number of people belonging to the global top 1 percent of wealth holders* in 2022, by country (in 1,000s) *The source provides the following information: a person needs at least 1,055,338 U.S. dollars of net worth to be a member of the top 1%.nullNumber of top 1 percent wealth holders globally by country 2022www.statista.com › distribution-of-global-wealth-top-1-percent-by-countrynull What percentile is a $3 million net worth?The 95th percentile, with a net worth of $3.2 million, is considered wealthy, facilitating estate planning and possibly owning multiple homes. The top 1%, or the 99th percentile, has a net worth of $16.7 million and represents the very wealthy, who enjoy considerable financial freedom and luxury.nullAre You Wealthy? The Net Worth You Need To Be Considered Poor ...finance.yahoo.com › news › wealthy-net-worth-considered-poor-190014440null What percentage of the population earns more than $1 million?The percentage of American households with a total annual income of over one million dollars is actually extremely low. You think everyone is rolling in dough? Think again. We're talking about around 1.8% of households pulling in those seven figures, based on the latest data available.nullWhat is the percentage of American households with a total annual ...www.quora.com › What-is-the-percentage-of-American-households-with-a...null |
