Are you rich enough to be in the top 1%? Here’s how much income and wealth it takes

James Royal, Ph.D.

Fri, Nov 29, 2024, 5:00 AM 5 min read

If you’re trying to keep up with the Joneses, you need to know how much this proverbially well-off American family has at its disposal. And that means knowing what the average American household earns annually as well as how much wealth it holds. As you go higher up the scale, the numbers accelerate, with the top 1 percent having much more than the average.

(If you’re really trying to keep up with the Joneses, you may want to set up a game plan with a financial advisor to help you get on track.)

Here are the average income and wealth for Americans in the top 1 percent.

What is the average wage for Americans and the top 1 percent?

The table below provides data on wages of Americans from the Social Security Administration.

For 2022, the average wage for working Americans was $61,136.
The average wages of those in the top 1 percent of wage earners were $785,968 that year.
In the rarefied top 0.1 percent, the average earnings were more than $2.8 million in 2022.

Here is how a few remaining categories break down by cohort and year.

Dollar figures are in 2022 dollars.Source: Economic Policy Institute analysis of Social Security Administration data

Category	2022	2021
Average wages	$61,136	$62,889
Average wages of bottom 90 percent	$40,845	$40,928
Average wages of 90th–99th percentile	$183,511	$187,609
Average wages of top 1 percentile	$785,968	$916,928
Average wages of top 0.1 percentile	$2,817,436	$3,707,327

This Social Security data includes any wages, salaries, bonuses, severance and other such compensation to employees, including exercised stock options, which are taxed as earned income. However, it does not include realized capital gains, though they are subject to taxes.

So these income figures show how much the average group member receives as earned income. But the higher up the scale you go up, the more likely the member is to have unearned income, such as dividends and capital gains – which are, again, not reflected in this data.

Need expert guidance when it comes to managing your investments or planning for retirement?

What is the average wealth for Americans and the top 1 percent?

The table below provides data on wealth from the Federal Reserve, including FRED data from the St. Louis Fed, indicating there were 131.5 million American households as of June 2024.

As of the second quarter 2024, the average American household had wealth of $1.17 million.
The average wealth of households in the top 1 percent was about $35.5 million.
In the top 0.1 percent, the average household had wealth of more than $158.6 million.

Here is how the remaining cohorts break down by percentile.

Category	Total cohort wealth (share)	Wealth per household
Average wealth	$154.39 trillion (100 percent)	$1.17 million
Average wealth of bottom 50 percent	$3.82 trillion (2.5 percent)	$58,149
Average wealth of 50th – 90th percentile	$47.55 trillion (30.8 percent)	$903,799
Average wealth of 90th – 99th percentile	$56.31 trillion (36.5 percent)	$4,756,716
Average wealth of 99th – 99.9th percentile	$25.84 trillion (16.7 percent)	$21,827,328
Average wealth of top 0.1 percent	$20.87 trillion (13.5 percent)	$158,646,706

The key figures here are not only the average wealth per household but also the share held by each, especially at the top. For example, the top 1 percent of households hold 30.3 percent of the total wealth, according to the Federal Reserve. But just the top 0.1 percent own 13.5 percent of the total wealth, giving them a stunning average of more than $158 million per household.

Similarly, while average wealth per household is more than $1 million, the number is skewed much higher because of the vast wealth at one end of the wealth distribution.

Don’t confuse high earners with the wealthy

You can measure whether you’re in the top 1 percent in two major ways: income and wealth. Income is the amount of money you earn annually, while wealth is the amount of assets you own. While these categories are often correlated with each other, they aren’t the same. That is, high earners often hold a lot of assets, but they don’t necessarily have to if they spend a lot.

For example, the wealthy may have relatively low incomes, say, if much of their wealth is tied up in an illiquid asset such as a house or even an illiquid or non-dividend-paying stock. While they may have a high net worth, they’re unable to generate income from the illiquid asset and therefore must continue with relatively low income if they intend to continue owning that asset.

Similarly, high earners generate a lot of money each year but need not be wealthy. Those who spend all of their earnings may not be building any wealth if their money doesn’t go into assets.

Those looking to build wealth over time may want to work with a financial advisor or wealth manager to help them find smart strategies to turn income into wealth.

Bottom line

If you’re looking to build wealth, then your decisions must reflect that fact. While those with a lot of wealth can turn it into income, those with high incomes but little wealth have just one way to join the ranks of the wealthy – be a disciplined saver and get your money working for you.

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