Which State Requires a Higher Income to Join the Richest 1% – New York or California?

Regarding breaking into the top 1% of earners in the U.S., location matters just as much as income. With their iconic financial hubs and booming industries, states like New York and California are often at the center of the conversation about wealth.

So, which state demands a higher paycheck to reach this elite group? California, according to the latest data from GoBankingRates.

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The Numbers: California vs. New York

• California: You'll need an income of $1,072,248 annually to crack the top 1%.
• New York: A slightly lower threshold of $999,747 will put you in the same category.

California's higher bar is largely due to its tech billionaires, sky-high living costs and the ultracompetitive job market. While still costly, New York has a more diverse economy and income spread that keeps its threshold just under the million-dollar mark.

Housing Market Comparison

Housing costs are a major factor influencing the income requirements in both states:

• California: The median home price is $869,000 as of 2024, according to Redfin.
• New York: The median home price is significantly lower at $522,000.

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Average Salaries

While the income required to join the top 1% is in the seven-figure range, average salaries are far more modest:

California: The average salary is $62,038, according to ZipRecruiter.

New York: The average salary is $51,979, reflecting the state's larger proportion of middle-income earners.

Cost of Living Comparison

California edges out New York as the more expensive state overall, according to MyLifeElsewhere:

• Overall, California is 8.0% more expensive.
• Housing: Costs are 24.0% higher in California.
• Transportation: California is 3.0% more expensive.
• Groceries: Slightly cheaper in California, by 1.2%.

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The Big Picture: How They Stack Up Nationally

Despite their high costs, neither California nor New York tops the national list for the 1% threshold. That title belongs to Connecticut, where you need a staggering $1,192,947 annually to join the wealthiest ranks.

Other states requiring over $1 million include:

Massachusetts: $1,152,992

Washington: $1,024,599

New Jersey: $1,010,101

The Takeaway

California may require a higher income to join the top 1%. Still, both states share a common challenge: living costs and income inequality make financial success difficult even for middle-class earners. While the top 1% income thresholds are jaw-dropping, they highlight how wide the gap between average salaries and elite earners is.

If you're aiming for financial stability – or dreaming of the 1% – it's worth evaluating the economic realities of your location. Housing, taxes and overall costs can dramatically impact your journey to wealth. 

For a more tailored approach to managing your finances and setting realistic goals, consulting a financial advisor can help you navigate these challenges and find opportunities to thrive, no matter where you live.

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