Are You Earning Enough To Be Considered 'Rich'? Here's What The Top 5% Are Raking In Annually

When we think about being "rich," the image isn't the same for everyone. Maybe it's about finally feeling like you're not just scraping by or being able to take a vacation without worrying about next month's bills. Maybe it's the freedom to leave work at 5 p.m. without a second thought or knowing your retirement is funded.

The truth is, there's no universal definition of "rich." It's as much about financial security and peace of mind as the numbers. But if we're looking at income alone, a threshold separates the top earners from the rest of us. So, how much does it take to be in the top 5% or even the top 1% in America?

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What It Takes to Be in the Top 5%

According to the Economic Policy Institute (EPI), you'd need an annual income of $335,891 to be in the top 5% of earners in the U.S. Want to be in the top 1%? That'll take at least $819,324 a year as of 2021. 

Please note that although this data is from 2021, this is the most current salary data from the EPI. 

Breaking it down monthly, the top 5% earn around $27,991 a month and the top 1% bring in $68,277 a month. For many, that's not just a salary – it's a completely different lifestyle.

It's All About Location

What qualifies as "rich" depends heavily on where you live. Income doesn't stretch the same way in every state and living costs play a major role.

In Massachusetts, for instance, you'd need to earn $810,256 annually to be in the top 1%. But in Mississippi, where living expenses are significantly lower, an income of $361,462 puts you in the same category.

For context, the median household income in the U.S. in 2022 was $74,580. That means half U.S. households earn less than that and the top earners – especially those in the 1% – are pulling in incomes that can feel almost unimaginable by comparison.

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Who's Actually Earning This Kind of Money?

Reaching these income levels often requires more than just a regular 9-to-5. The people making it into the top 5% or 1% typically fall into a few categories:

• High-powered professionals: Think surgeons, anesthesiologists, corporate lawyers and executives.
• Successful entrepreneurs: Business owners who have scaled their operations.
• Specialized experts: Professionals in finance, tech or other lucrative fields.
• Public figures: Celebrities, athletes and top-tier influencers.

Even in these groups, the top 1% is a small club. Out of the 131 million households in the U.S., only about 1.3 million qualify.

What Does "Rich" Feel Like?

If you aim to feel "rich," it might take less than you think – or more, depending on your expectations. A 2024 study from Bankrate found that, on average, Americans must earn a salary of $520,000 to feel rich. While higher than the top 5%, they're still below the 1% threshold. 

• Gen Z (ages 18 to 27): $461,000
• Millennials (ages 28 to 43): $480,000
• Gen X (ages 44 to 59): $574,000
• Baby boomers (ages 60 to 78): $556,000

But being rich isn't just about the numbers. Financial security plays a big role. For some, it's about having enough to cover emergencies without stress. For others, it's the ability to retire early or live without debt.

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Income Inequality in America

To put all this into perspective:

• The top 1% of earners comprise more than 26% of the nation's total income.

• Meanwhile, the bottom 50% – half the country – share just 10.4% of the total income.

This disparity makes the top 5% and 1% feel worlds apart from the median household. And while income is one measure, wealth (the assets you own versus what you owe) often paints an even starker picture.

So, Are You Rich?

If you're not earning $335,891 a year, you're technically not in the top 5%. But does that mean you're not "rich?" Not at all. For many people, being rich isn't about a specific number. It's about having enough to feel comfortable, secure and free to live the life you want.

Whether your goal is to build wealth, pay off debt or figure out where you stand, having a financial plan is key. A financial advisor can help you take control, set clear goals and create a strategy that works for your unique situation. Because being rich isn't just about money – it's about feeling like you're in control.

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