Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
There's no set dollar amount at which someone goes from being rich to wealthy. Instead, it's largely about perception.
The top 10% of earners have an average net worth of $2.65 million. Even if you're squeaking into the upper class (the 80-90% range), you're looking at about $793,000. Moving down to the middle class, things get a bit more varied. The upper-middle class folks have an average net worth of around $300,800.
A $100,000 salary is considered good in most parts of the country, and can cover typical expenses, pay down debt, build savings, and allow for entertainment and hobbies. According to the U.S. Census, only 15.3% of American households make more than $100,000 annually.
The Minimum Salary To Be Upper-Middle Class
To be part of the top 20% of the middle class, you need to earn $106,092 and $149,160, — depending on your geographic location — according to a recent study by GOBankingRates.
As of the second quarter 2024, the average American household had wealth of $1.17 million. The average wealth of households in the top 1 percent was about $35.5 million. In the top 0.1 percent, the average household had wealth of more than $158.6 million.
With $8 million in savings, even a modestly invested portfolio can generate enough money to live a very comfortable life indefinitely. Of course, that's all relative as the amount of money you need in retirement is going to vary based on an individual's life choices and desires.
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).
To be considered a really top earner in the U.S., we could take the IRS' benchmark on what the top 1% of Americans earn—above $540,009 puts you in the top 1% of earners from a tax perspective. The Economic Policy Institute though, believes that to be in the top 1% of earners you need to earn $819,324 a year.
Probably 1 in every 20 families have a net worth exceeding $3 Million, but most people's net worth is their homes, cars, boats, and only 10% is in savings, so you would typically have to have a net worth of $30 million, which is 1 in every 1000 families.
Those with billions of dollars to their name can buy a home outright rather than take out a loan. Yet celebrities like Mark Zuckerberg, Elon Musk and Jay-Z have all made headlines for taking out multimillion-dollar mortgages — not out of necessity but to reap a couple of key benefits.
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.
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.
But according to Charles Schwab's 2024 Modern Wealth Survey, the general consensus is that a net worth of $778,000 will put most Americans into financial comfort. This survey collected information from 1,000 Americans aged 21-74.
So for example, in this hypothetical simulation, a retiree with a $10 million portfolio could have cash flow of $470,000/year (increasing 2.5% annually to keep pace with inflation) for 25 years with an 80% probability that he/she will not run out of money prematurely.¹ If we further assume a simple flat tax rate of 25% ...
You now need a net worth of $5.8 million to be among the richest 1% of Americans, report finds. Americans need a net worth just south of $6 million to break into the richest 1%.
Rich people are often measured by their income. Wealthy people, though, are measured by their net worth – how much they own minus how much they owe. A person can earn a huge salary but not wealthy if they have high debt or no savings.
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.
Many are founders of technology giants, with much of their wealth still invested in the companies they started. With so much of their wealth in publicly traded stocks, the net worth of the richest fluctuates along with the market valuations of the companies they own.
According to Kiplinger, by 2025, entering the top 2% of America's wealth will require a net worth of approximately $2.7 million, marking the threshold for elite economic status. Last year, the Schwab Modern Wealth Survey revealed Americans believe it takes $2.2 million to feel wealthy.