How Much Do You Have to Earn to Be a Part of the Top 1%, 5%, and 10%? It’s Probably Less Than You Think

When you think of the top 1% of earners, the first people who come to mind are well-known entrepreneurs and investors like Warren Buffett and Bill Gates. These billionaires make so much money that they hardly know what to do with it. Even if all of them gave away $20 a second, they’d still be at it for over 578 days.

And….. that’s just to get rid of their first $1 billion.

But, you may be shocked to know that those wealthy earners make up just 0.001% of the American population. In reality, you only need a fraction of their wealth to fall into the top 10%, 5%, or even 1% of earners.

The top 10%

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Being a part of the top 10% is an attainable goal for most upwardly mobile Americans. Research by the Economic Policy Institute (EPI) showed that the average earnings of people in the top 10% were roughly $173,000 in 2020.

Since the latest available statistics reflect the household’s top wage earner, you’re looking at a massive jump from Americans in the first 90%. According to the EPI, the average American earned $40,000 in 2020.

The imbalance of wealth within top tiers

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There’s also an evident jump between the bottom and top 10% of earners. Those in the bottom half made around $133,500 in 2020, whereas those in the top half made $223,000.

There’s another side to this. Studies also show that while it might take less to fall into a top percent bracket, wage gaps are only getting worse, especially since they fail to keep up with inflation. This makes advancing your family’s status less attainable for middle-class households these days.

From the top 5% to the top 1%

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The closer you get to the top 1%, the salaries start to jump much higher. You’ll see massive shifts in the top 5%, where the EPI saw the average earners significantly increase to $343,000 in 2020, up from $324,000 the previous year.

While that’s a lot of money, there’s a trend of even more cash flowing to, or even flooding to, those at the top of the heap.

What about the top 1%?

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The wages of the top 1% jumped to an astounding 20% higher between 2009 and 2019. They earned over $824,000 in 2020— 7% higher than the previous year. This group’s earnings beat out inflation over the same period, reaching 1.4%.

Keep in mind that the cost-of-living numbers mean that the top 5% and 1% pan out differently. According to a 2022 study, the top 1% in Connecticut makes around $896,490. Whereas in Tennessee, you’d only need to make approximately $492,583 to be in the top 1% group.

While the earnings of the top 1% vary, in 2022, Forbes reported that the bracket’s minimum net worth is much higher—$11.1 million.

Where does this leave the average American earner?

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According to Pew Research Center statistics, middle-class Americans’ average earnings jumped from $74,000 in 2010 to $78,500 in 2016. Today, that number sits at $90,000. Sadly, that more significant number doesn’t have as much buying power as the 2010 amount did at the time. 

Because here’s the deal— while salaries may have increased, so has inflation. Even if you’re an American making the average wage, you’re likely feeling the pressure to pinch pennies.

There’s one metric where top percentages are attainable for all—how your income compares to your job satisfaction and happiness at home. Sure, job satisfaction won’t buy you a yacht or a rowboat, but finding a way to balance the two is a more direct path to “true” wealth.