Are You in the Top 1%?

The term “top 1%” typically refers to people among the top 1% wealthiest Americans, as measured by either annual income or net worth. The income of those in the top 1% is many multiples above that of the average American: According to one study, in 2018 the average person in the top 1% earned an income more than 39 times that of someone in the bottom 90%.

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Income of the Top 1%

In order to be considered in the top 1% of wage earners in the U.S., you’d need to have wages of $758,434, according to information from the progressive Economic Policy Institute (EPI), using wage data for 2019. By comparison, the average worker in the U.S. earns just $57,535 annually.

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The income of the top 1% is still growing. Research from EPI shows that wages from 2009-2019 grew 20.4%, while those in the bottom 90% rose at less than half that rate — only 8.7%.

For wider context, EPI also found that when you look at wages from 1979–2019, the top 1% grew by 160.3%, while the bottom 90% saw wages grow only 26% during the same time period.

EPI data, however, showed that earners in the top 10% make substantially less than the top 1%. Those making between 90th and 95th percentiles averaged almost six times less — $129,998 in 2019. Earners in between the 95th and 99th percentiles averaged just over three times less — $210,511 in 2019.

State by State

In another study from the EPI that looks at income inequality in 2015, the top 1% also varies depending on what state you live in. For example, in Connecticut, you’d need to pull in $700,800 a year to fall into the top 1%, but the average income of that state’s top 1% is actually $2.52 million. In Georgia, those numbers are significantly lower, at $371,811 annually to earn a place in the top 1%, and an average of $995,576 for all top 1% earners in that state. In New Jersey, those numbers are $588,575 and $1.58 million, respectively.

Alabama, on the other hand, requires an annual paycheck of just $297,564 to be in the top 1% of earners, while Mississippi’s threshold is just $254,362 annually. North Dakota requires $445,415 a year, while in Ohio you’ll enter the 1% at a salary of $334,979, though keep in mind that the average incomes of the top 1% of earners in these states is often much higher.

Top 1% by Net Worth

In order to be in the top 1% of household wealth in the U.S., you’d need to be worth at least $10,374,030.10, according to Forbes. To be in the top 1% globally, you’d need a minimum of around $936,430, according to the 2019 Global Wealth Report from Credit Suisse. The difference reflects, in part, decades in which the U.S. economy was the world’s strongest and, thus, for many years Americans were accumulating wealth at a higher rate than residents of other countries.

For the top 10% in the U.S., the minimum is $1,182,390.36 and for the 0.10% the minimum is $43,090,281.

While the net worth of the top 1% in America continues to rise, the rate at which it is rising is declining, according to the Credit Suisse Global Wealth Report 2019. Rising uncertainties and tensions in the U.S. over the last few years – trade war with China, tension in the Middle East, stock-market volatility and concern about mounting government debt – may be reflected in recent decelerating wealth growth, according to the Swiss bank’s report. Wealth per adult rose just 3% in the 12 months to mid-2019, compared to an average annual increase of 5% in the previous five years.

The richest 1% of Americans are not just experiencing growing wealth, they also are experiencing a growing slice of the nation’s overall wealth, he according to the Federal Reserve. The wealth share of the top 1% climbed from 36.3% in 2013 to 38.6% in 2016, slightly surpassing the wealth share of the next highest 9% of families combined.

Bottom Line

To be in the top percentage of earners in the U.S., you’d need to pull in $758,434 a year, based on recent data. Keep in mind that the average worker in the U.S. earns just $57,535. The top 1% of earners in the U.S. earn more than 19 times more than the bottom 90% of earners, according to one research group. The income of the top 1% continues to grow. In fact, they make 160.3% more than they did in 1979, while the bottom 90% only made 26% more during the same time period.

Tips for Investing

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You can consider the wealth gap from many perspectives beyond just the raw numbers. Insightful data exists on the gap considered from the perspectives of race, generation and gender.