Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
For the purposes of this article, those with an income in the bottom 20 percentile will be identified as lower class, followed by lower-middle class (up to 40th percentile), middle class (up to 60th percentile), upper-middle class (up to 80th percentile) with the remainder considered upper class.
This is a rough estimate and doesn't account for family size or location. But, as a quick calculation, those making less than $43,350 make up the lower-income bracket, while those making more than $130,000 make up the upper-income bracket.
With a $130,000 annual salary, which translates to a gross monthly income of approximately $10,833, you could potentially afford a house priced between $390,000 to $650,000, depending on your financial situation, credit score, and current market conditions.
Rich and richer
"The top 5% [income threshold] is good context for just how big of outliers the top 1% are." Earning $200,000 annually "is generally the floor to be considered upper middle class," but it's also roughly the point at which the IRS phases out some tax benefits, such the Child Tax Credit, she noted.
How much do you need to earn to be in the top 10% income bracket? A 2022 study by the Economic Policy Institute (EPI) found that the top 10% of earners nationally received an average income of $167,639 in 2021.
Key Takeaways. The lower class has a median net worth of about $3,500, while the upper class has one of about $7.81 million. The middle class has a median net worth that ranges from $93,300 to $1.04 million.
While there's no definitive line, households in the top 20% of earners are generally considered upper class. According to the U.S. Census Bureau, the median household income in 2022 was $74,580. To reach the upper class in 2024, you'd typically need an income exceeding $153,000 – more than double the national median.
$520,000. That's how much income Americans think they would need, on average, to feel rich, according to Bankrate's Financial Freedom Survey published in July. That salary would put you comfortably among the top 2% of American earners, according to Census data.
Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).
The term upper class is a socioeconomic term used to describe those who reside on the highest levels of the social ladder above the middle and working or lower classes. They generally have the highest status in society and hold a great deal of wealth.
But how much does it take to be considered wealthy? A net worth of $2.5 million is what Americans think it takes to earn the wealthy moniker, according to Charles Schwab's annual Modern Wealth survey. That seven-figure sum is up 14% from a year ago, when survey respondents thought amassing $2.2 million was enough.
For purposes of the NIIT and the Additional Medicare Tax, single taxpayers earning over $200,000 and married taxpayers earning over $250,000 are considered high-income.
Many politicians, heirs to fortunes, top business executives such as CEOs, successful venture capitalists, and celebrities are considered members of the upper class. Some prominent and high-rung professionals may also be included if they attain great influence and wealth.
According to estimates based on the Federal Reserve Survey of Consumer Finances, a mere 3.2% of retirees have over $1 million in their retirement accounts. The number of those with $2 million or more is even smaller, falling somewhere between this 3.2% and the 0.1% who have $5 million or more saved.
What is a good net worth for my age? People in their 20s and 30s should target net worth of $100,000 to $300,000. A net worth of $1 million or more should be the goal in your 40s and beyond. A seven-figure net worth is usually necessary to ensure a comfortable retirement.
Only 18% of individual Americans make more than $100,000 a year, according to 2023 data from careers website Zippia. About 34% of U.S. households earn more than $100,000 a year, according to Zippia.
Rich retirees: In the 90th percentile, with net worth starting at $1.9 million, this group has much more financial freedom and is able to afford luxuries and legacy planning.
According to a 2024 study from SmartAsset, you need $787,712 to be in the top 1% of earners nationwide. Based on that figure, an annual income of roughly $800,000 or more would make you rich.