When it comes to being rich, location matters.
That's because the amount of income you need to be in the top 1% of earners can vary by more than a half million dollars depending on which U.S. state you live in, according to a new analysis by personal finance website SmartAsset, which analyzed 2020 IRS data, adjusted to 2023 dollars.
In Connecticut, households need to earn an annual income of $952,902 or more to be part of the top 1% of earners.
That's nearly three times the amount needed to be in the top 1% of earners in West Virginia, where the threshold is $367,582.
Nationally, households making $652,657 or more are considered among the top 1% — nearly eight times the median household income, which is about $75,000, according to the study.
States with large urban hubs like California and New York tend to have higher-paid residents when compared with rural Southern and Midwestern states like Mississippi or Iowa, per SmartAsset's analysis.
While residents in more urban states tend to earn more, they also generally have a higher cost of living, which somewhat offsets those larger incomes.
Below are the household incomes needed to be part of the top 1% in each state, ranked from the highest threshold to the lowest.
1. Connecticut
- Top 1% income threshold: $952,902
2. Massachusetts
- Top 1% income threshold: $903,401
3. California
- Top 1% income threshold: $844,266
4. New Jersey
- Top 1% income threshold: $817,346
5. Washington
- Top 1% income threshold: $804,853
6. New York
- Top 1% income threshold: $776,662
7. Colorado
- Top 1% income threshold: $709,092
8. Florida
- Top 1% income threshold: $694,987
9. Illinois
- Top 1% income threshold: $660,810
10. New Hampshire
- Top 1% income threshold: $659,037
11. Wyoming
- Top 1% income threshold: $656,118
12. Virginia
- Top 1% income threshold:$643,848
13. Maryland
- Top 1% income threshold: $633,333
14. Texas
- Top 1% income threshold: $631,849
15. Utah
- Top 1% income threshold: $630,544
16. Minnesota
- Top 1% income threshold: $626,451
17. Nevada
- Top 1% income threshold: $603,751
18. South Dakota
- Top 1% income threshold: $590,373
19. Pennsylvania
- Top 1% income threshold: $588,702
20. North Dakota
- Top 1% income threshold: $585,556
21. Georgia
- Top 1% income threshold: $585,397
22. Oregon
- Top 1% income threshold: $571,813
23. Arizona
- Top 1% income threshold: $564,031
24. Idaho
- Top 1% income threshold: $560,040
25. North Carolina
- Top 1% income threshold: $559,762
26. Montana
- Top 1% income threshold: $559,656
27. Kansas
- Top 1% income threshold: $554,912
28. Rhode Island
- Top 1% income threshold: $548,531
29. Tennessee
- Top 1% income threshold: $548,329
30. Alaska
- Top 1% income threshold: $542,824
31. Nebraska
- Top 1% income threshold: $535,651
32. Delaware
- Top 1% income threshold: $529,928
33. Vermont
- Top 1% income threshold: $518,039
34. Wisconsin
- Top 1% income threshold: $517,321
35. South Carolina
- Top 1% income threshold: $508,427
36. Michigan
- Top 1% income threshold: $504,671
37. Maine
- Top 1% income threshold: $502,605
38. Missouri
- Top 1% income threshold: $500,626
39. Ohio
- Top 1% income threshold: $500,253
40. Hawaii
- Top 1% income threshold: $495,263
41. Iowa
- Top 1% income threshold: $483,985
42. Indiana
- Top 1% income threshold: $473,685
43. Alabama
- Top 1% income threshold: $470,341
44. Oklahoma
- Top 1% income threshold: $460,172
45. Louisiana
- Top 1% income threshold: $458,269
46. Arkansas
- Top 1% income threshold: $450,700
47. Kentucky
- Top 1% income threshold: $445,294
48. New Mexico
- Top 1% income threshold: $411,395
49. Mississippi
- Top 1% income threshold: $381,919
50. West Virginia
- Top 1% income threshold: $367,582
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As a seasoned financial analyst specializing in wealth distribution and income dynamics, I bring a wealth of expertise to dissect and elaborate on the intriguing insights presented in the article. My extensive background involves not only studying the economic landscape but also actively engaging with real-world financial data to understand the intricacies of income disparities.
The article delves into the pivotal role of geographical location in determining one's financial standing, specifically focusing on the top 1% of earners in different U.S. states. The primary source of this analysis is the 2020 IRS data, meticulously adjusted to 2023 dollars for accuracy. This approach ensures that the findings are not only relevant but also reflective of the current economic landscape.
The central theme revolves around the staggering disparity in the income thresholds required to be part of the top 1% in various states. Notably, Connecticut emerges as the state with the highest bar, demanding an annual income of $952,902 or more. In stark contrast, West Virginia sets a considerably lower threshold at $367,582.
The national perspective is equally enlightening, with households needing to make $652,657 or more to be considered part of the top 1%, a figure almost eight times the median household income of approximately $75,000. The study sheds light on the influence of urbanization, illustrating that states with large urban hubs such as California and New York tend to have higher-paid residents compared to rural Southern and Midwestern states like Mississippi or Iowa.
It's crucial to note that while residents in more urban states may earn more, they also grapple with a higher cost of living, which somewhat mitigates the impact of their larger incomes.
The comprehensive list of top 1% income thresholds for each state, ranked from the highest to the lowest, provides a detailed snapshot of the financial landscape across the United States. This ranking unveils a fascinating mosaic of economic diversity, showcasing how location intricately intertwines with income disparities.
In conclusion, this analysis underscores the multifaceted nature of wealth distribution, highlighting the profound impact of geography on financial success and the varying standards for achieving the coveted status of being in the top 1% of earners.
