Are You In The Top 1%?

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.

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.

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.

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.