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- 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.
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.
The top five states with the highest thresholds to be in the top 1% of earners, according to SmartAsset:
- Connecticut: $896,490
- Massachusetts: $810,256
- New York: $777,126
- New Jersey: $760,462
- California: $760,462
These are the five states with the lowest thresholds to be in the top 1% of earners:
- West Virginia: $350,212
- Mississippi: $361,462
- New Mexico: $384,427
- Arkansas: $411,633
- 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.
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.