What Does It Mean to Be in the Top 1% in the U.S.?

The term “top 1%” is often used in discussions about income inequality and wealth distribution in the United States. But what exactly qualifies someone as being in this elite group? The answer depends on how you measure wealth, by income or net worth, and where you live.

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What is considered a Top 1% Income?

Based on IRS data adjusted for inflation, a 2024 study by SmartAsset reveals that to qualify as a top 1% earner in the U.S., you must have an annual income of at least $787,712. In stark contrast, the median U.S. household income was $80,610 in 2023, as per data from the Federal Reserve Bank of St. Louis.

The top 1% not only earn significantly more than the average American but also continue to grow their earnings at a faster pace. According to the Economic Policy Institute (EPI), wages for the top 1% grew by 160.3% between 1979 and 2019, while those for the bottom 90% grew by just 26%.

Comparing the Top 10% to the Top 1%

Being in the top 10% doesn’t necessarily mean you're part of the 1%. For instance:

• 90th–95th percentile: Average income was around $129,998 in 2019.

• 95th–99th percentile: Earners made about $210,511 on average.

This highlights how exclusive the top 1% club is.

Top 1% Income by State

Income thresholds to join the 1% vary widely across states. For example:

• Connecticut: $1,152,254

• California: $1,035,673

• Texas: $762,090

• Georgia: $700,544

States with high costs of living tend to have much higher income thresholds for the top 1%.

How Many Americans Are in the Top 1%?

Only around 1.49 million Americans reported incomes of $787,712 or more in 2021. Unsurprisingly, California had the most top earners (177,645), followed by Texas (126,128) and Florida (101,940).

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Conclusion

Being in the top 1% in the U.S. requires an income nearly ten times the national median. Whether measured by income or net worth, the top 1% continues to accumulate wealth at a disproportionate rate. While it may seem out of reach for most, long-term financial planning and smart investing, possibly with the guidance of a financial advisor, can help individuals steadily grow their wealth and secure their financial future.