How Much Income Puts You in the Top 1%, 5%, 10%?

When you read all those stories about the 1%—or even the top 5% or 10%—it may raise the question: How much money do you need to make to be in one of those groups? Answer: You'll need at least six figures—and in some cases, seven—to count yourself among the nation's top earners. Here is how the numbers break down.

Annual Incomes of Top Earners

The most recent data available from the Internal Revenue Service, based on tax year 2021 (as reported on Americans' 2022 tax returns), shows that taxpayers in the top 1% had adjusted gross income (AGIs) of at least $682,577, according to an analysis by the Tax Foundation. Those in the top 5% had AGIs of at least $252,840, while breaking into the top 10% required an income of at least $169,800.

Those numbers are averages, of course, and can vary widely from one part of the country to another. The website GoBankingRates, also using 2021 data but adjusting it for inflation, found that qualifying for the top 1%, for example, now requires an AGI of over $1 million in five states (California, Connecticut, Massachusetts, New Jersey, and Washington), with Connecticut having the highest threshold, of $1,192,947.

Meanwhile, residents of three states (Mississippi, New Mexico, and West Virginia) could qualify with less than $500,000 in AGI. West Virginia set the lowest bar, at $435,302.

Note that AGI includes both earnings from work and taxable investment income. Another study, by the Economic Policy Institute (EPI), examined Social Security Administration data to break down the top tiers in terms of average annual earnings. Here is what it found:

Income and Wealth Disparities Between the Top and Bottom

Income inequality has become a major political issue in recent years, driven in part by the data on rising disparities between the highest earners and everyone else.

These disparities are most dramatic when you look at how the distribution of wages has changed since 1979. As the EPI reports: "The top 1% earned 14.6% of all wages in 2021—twice as high as their 7.3% share in 1979. The bottom 90% received just 58.6% of all wages in 2021, the lowest share on record, and far lower than their 69.8% share in 1979."

Based on the same data, the EPI notes that, "Wages for the top 1% and top 0.1% skyrocketed by 206.3% and 465.1%, respectively, while wages for the bottom 90% grew just 28.7%.

Statistics on individual wealth—that is, people's savings, investments, and other assets—reflect similar trends. Between Q1 1990 and Q4 2023, the percentage of the nation's wealth held by the top 1% income group grew from 16.5% to 23.1% and the wealth held by the top 2% to 20% income group rose from 43.7% to 47.4%. At the same time, the percentage held by every other group either fell or remained flat.

In its latest data, the Federal Reserve reports that as of Q1 2024, the top 1% in terms of income now holds 23.4% of the nation's wealth, or nearly three times as much as the 8.2% held by the middle 40% to 60% of U.S. households (often used to define the middle class by economists). Adding the top 1%'s 23.4% to the 47.4% held by everyone else in the top 20% shows that 20% of Americans control more than 70% of the nation's wealth, leaving the bottom 80% with less than 30%.

The Bottom Line

To be a top earner in the U.S., you'll need to make at least six figures these days and possibly seven. The wealthiest Americans have grown richer much faster than the rest of the population since at least 1979. Income disparity and the pace at which it is growing stands out in particular among the highest and lowest earners.