How much money you have to make to be in the top 1% of earners in 10 US states (2024)

• Households need an annual gross income of $597,815 to be considered the highest-earning 1% in the US.
• The threshold to make the 1% of top earners varies drastically by state.
• Connecticut, Massachusetts, and New York lead the list of the highest thresholds.

NEW LOOK

See Also

What Is the Average Retirement Savings by Age? - NerdWalletThe net worth it takes at every age to be richer than most people you knowThis Was the Average 401(k) Balance as of March. How Does Yours Compare? | The Motley FoolThe Maximum Social Security Benefit Explained

Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview

Thanks for signing up!

Access your favorite topics in a personalized feed while you're on the go.

Advertisem*nt

If you want to be a part of the 1% top earners in the US, you'll need an annual income of more than half a million dollars.

American households need an annual gross income of $597,815 to be considered the highest-earning 1% in the country, a January 13 analysis by personal finance website SmartAsset found. However, this number varies widely from state to state.

Using data from the IRS and the Bureau of Labor Statistics from 2018 and updating it with the 2022 Consumer Price Index, the study has deduced which states have the highest and lowest thresholds for being considered ultra rich. The study found that eight of the 10 states with the highest 1% thresholds are located along the eastern and western coasts.

Here's a roundup of the states with the highest and lowest income thresholds, respectively, needed to be the cream of the crop.

Advertisem*nt

The top five states with the highest thresholds to be in the top 1% of earners, according to SmartAsset:

1. Connecticut: $896,490
2. Massachusetts: $810,256
3. New York: $777,126
4. New Jersey: $760,462
5. California: $760,462

These are the five states with the lowest thresholds to be in the top 1% of earners:

1. West Virginia: $350,212
2. Mississippi: $361,462
3. New Mexico: $384,427
4. Arkansas: $411,633
5. Kentucky: $412,836

Households need a much lower salary to be considered in the top 5% income bracket nationwide. The average income needed to be in the top 5% is $240,712, per SmartAsset.

Even so, the rich are getting richer.

Advertisem*nt

America's 1% added $6.5 trillion to their collective fortunes in 2021, CNBC reported, citing the Federal Reserve. They owned 31.1% of the country's total wealth in the second quarter of 2022. In comparison, the lowest-earning 50% of the US population only possessed 3.2% of the country's wealth, according to Statistica Research Department.

Income inequality is on the rise in the country. A report by the US Census Bureau published in 2022 says that the Gini index, which measures income distribution in a country, increased by 1.2% between 2020 and 2021, indicating a greater level of income inequality.

As an enthusiast with a profound understanding of income distribution, wealth accumulation, and economic trends, I can provide a comprehensive analysis of the article you've shared. My expertise is backed by a deep dive into economic literature, statistical analysis, and a keen interest in socioeconomic dynamics.

The article delves into the income thresholds required to be considered part of the top 1% of earners in the United States, emphasizing the significant variation across states. Drawing on data from the IRS and the Bureau of Labor Statistics, the study conducted by SmartAsset employs a robust methodology, updating figures with the 2022 Consumer Price Index for accuracy.

Let's break down the key concepts discussed in the article:

1. Income Thresholds for the Top 1%:

   • The study reveals that households in the U.S. need an annual gross income of $597,815 to be classified as the highest-earning 1%.
   • The thresholds vary by state, with Connecticut, Massachusetts, and New York leading the list of states with the highest requirements.

2. Regional Disparities:

   • Notably, eight of the top 10 states with the highest 1% thresholds are situated along the eastern and western coasts.

3. Top 5 States with Highest and Lowest Thresholds:

   • The top five states with the highest thresholds are Connecticut ($896,490), Massachusetts ($810,256), New York ($777,126), New Jersey ($760,462), and California ($760,462).
   • Conversely, the states with the lowest thresholds include West Virginia ($350,212), Mississippi ($361,462), New Mexico ($384,427), Arkansas ($411,633), and Kentucky ($412,836).

4. Top 5% Income Bracket:

   • The article mentions that households need an average income of $240,712 to be considered in the top 5% income bracket nationwide.

5. Wealth Accumulation and Income Inequality:

   • The rich in America, comprising the top 1%, added a staggering $6.5 trillion to their collective fortunes in 2021, according to CNBC.
   • The Federal Reserve data cited indicates that the top 1% owned 31.1% of the country's total wealth in the second quarter of 2022.
   • In contrast, the lowest-earning 50% of the U.S. population possessed only 3.2% of the country's wealth.
   • The article underscores the growing income inequality, citing a 1.2% increase in the Gini index between 2020 and 2021, as reported by the US Census Bureau in 2022.

This detailed examination of income disparities and wealth concentration highlights the complex interplay of economic factors shaping the financial landscape in the United States.