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In this day and age, we hear a lot about income equality, and people want to know where they stand on the economic ladder. If you’re curious about how the “other half” lives—or whether you’re already part of the 1%—start by looking at what income and net worth it takes to qualify for the top 1% in your state.
According to recent studies, to be in the top 1% of earners in the U.S., you need to bring in an annual salary of at least $597,815. This means that the other 99% of earners in the U.S. make less than this amount per year. When it comes to net worth, the top 1% of Americans have a minimum net worth of around $11.1 million.
Of course, these numbers vary by state and differ somewhat from study to study. For that reason, it’s necessary to understand income and net worth stats in your area to get the full picture.
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Income of the Top 1%
The earnings required to fall in the top 1% vary by state but generally amount to several hundred thousand dollars per year of household income. For example, in Alabama, the top 1% of earners make about $430,000 or more annually, while in Connecticut the figure is closer to $900,000.
To put these numbers in perspective, the median household income in the U.S. was just over $67,500 in 2020. The top 1% of earners, then, make almost nine times the median income in the U.S. The people who earn enough to meet this threshold work in a range of industries and include doctors, lawyers, business owners and executives—but this also varies regionally.
States With Highest 1% Income Threshold
These 10 states have the highest 1% income threshold:
- Connecticut: $896,490
- Massachusetts: $810,256
- New York:$777,126
- New Jersey:$760,462
- California:$745,314
- Washington:$685,128
- Colorado:$632,277
- Illinois:$627,329
- Florida:$623,736
- Texas:$594,313
States With Lowest 1% Income Threshold
These 10 states have the lowest 1% income threshold:
- Vermont:$451,765
- Iowa:$441,223
- Indiana:$437,567
- Maine:$434,306
- Alabama:$432,330
- Kentucky:$412,836
- Arkansas:$411,633
- New Mexico:$384,427
- Mississippi:$361,462
- West Virginia:$350,212
Top 1% Income by State
In surveying the economies of individual states, it’s clear that job opportunities vary widely, as do costs of living. So, it should come as no surprise that incomes similarly differ by region. The income required to be in the top 1% of household income varies by state, with many states in the northeast as well as California requiring the highest earnings to qualify.
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Top 1% Net Worth
Income is one way to measure financial success, but it’s certainly not the only method. Another common metric is net worth, which is the total value of a household’s assets minus liabilities. Data shows that an American household needs to have a net worth of at least $10,374,030 to be in the top 1% of the U.S.
To put this in perspective, the median net worth in the U.S. was $121,760 in 2019, meaning that half of all Americans have a net worth of less than this amount. The top 1% of Americans, then, have a net worth that is more than 85 times the median net worth in the U.S.
Read more: Net Worth Calculator
As with income, however, the amount you need to have to be in the top 1% of net worth varies by state. In Connecticut, for example, you would need a net worth of at least $3,603,629 to be in the top 1%, while in Mississippi you would only need $766,205.
How To Be in the Top 1%
An individual could enter their state’s top 1% income threshold with the help of advanced education, entrepreneurship and investments. This could be done over the course of a career or a lifetime. However, no path is guaranteed to generate the kind of wealth that will propel you into your state’s top earners. Every career has high and low earners. Many startups don’t succeed, and every investment carries risk.
Individuals and families who have made it into America’s or the world’s top 1% net worth category have usually done so over time. Achieving this threshold can require years (if not decades) of wealth building, which could include inheritances, entrepreneurship and investing. Many of the world’s top 1% have built on generational wealth.
There’s no simple solution for a person to enter the world’s top 1%. It often requires either a substantial inheritance to begin with or starting a company that quickly becomes a massive industry leader, such as Amazon.com or Tesla. Obviously, there’s no way to plan for either of those eventualities.
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Bottom Line
Whether you measure it by income or net worth, the top 1% is a select group. But it’s important to remember that the bar for entry varies depending on where you live. So, if you’re wondering if you’re in the top 1%, it’s best to compare yourself to others in your state or local area.
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Via Datalign Advisory
I'm an enthusiast deeply immersed in the realm of personal finance, economic stratification, and wealth dynamics. My expertise extends beyond mere surface-level understanding, delving into intricate details backed by a wealth of data and analysis.
The article you provided, sourced from Forbes Advisor, delves into the topic of income and net worth disparities, focusing on the criteria to be part of the top 1% in the United States. Let's break down the key concepts discussed in the article:
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Income Threshold for the Top 1%:
- To be part of the top 1% of earners in the U.S., an individual needs an annual salary of at least $597,815.
- This figure varies by state; for instance, in Alabama, the threshold is around $430,000, while in Connecticut, it's closer to $900,000.
- The article lists the top 10 states with the highest and lowest 1% income thresholds, illustrating the regional variations.
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Top 1% Income by State:
- The income required to be in the top 1% varies by state, reflecting differences in job opportunities, costs of living, and regional economies.
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Top 1% Net Worth:
- Net worth, the total value of a household’s assets minus liabilities, is another metric for measuring financial success.
- To be in the top 1% of net worth in the U.S., a household needs a net worth of at least $10,374,030.
- Similar to income, the required net worth varies by state; for example, in Connecticut, it's over $3.6 million, while in Mississippi, it's $766,205.
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How to Be in the Top 1%:
- The article suggests that entering the top 1% income threshold may involve advanced education, entrepreneurship, and investments over a career or lifetime.
- However, there's no guaranteed path to wealth, and success often involves factors such as education, entrepreneurship, and investment.
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Factors Influencing Top 1% Status:
- Achieving top 1% status in income or net worth often involves long-term wealth-building strategies, including inheritances, entrepreneurship, and investing.
- Building generational wealth is a common theme among those who make it into the top 1%.
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Regional Disparities:
- The article emphasizes the importance of considering regional differences when assessing whether one belongs to the top 1%.
In conclusion, the article provides a comprehensive overview of the criteria for being part of the top 1% in the U.S., considering both income and net worth. The regional variations highlighted underscore the nuanced nature of wealth dynamics in different parts of the country.