Here’s how much income it takes to be considered rich in your state
U.S. (CBS NEWS)– Many Americans aspire to join the ranks of the wealthy, but the income threshold for being considered rich depends a lot on where you live.
It also takes considerably more income to join the top 5% of earners than just a few years ago, according to new research from GoBankingRates.com, which examined state income data for the five-year period from 2017 to 2022. The latter year represents the most recent household income data from the U.S. Census Bureau.
The easiest place to reach the top of the heap is West Virginia, where an annual income of $329,620 will qualify you as among its highest earners. But you’ll have to earn more than twice that, at $719,253, to join the top 5% in Washington D.C.
Americans’ fortunes have improved during the last few years, partly due to the federal government’s pandemic stimulus efforts that doled out billions in aid to businesses and taxpayers, said Andrew Murray, lead data content researcher for GoBankingRates. At the same time, the nation’s top-earning households are gaining a greater share of income, fueling rising income inequality, Census data shows.
“COVID relief policies bolstered the economy, leading to boosted stock prices, real estate and savings,” Murray told CBS MoneyWatch. “These conditions were especially favorable for the wealthiest of Americans, who experienced dramatic income increases, especially considering the fact that many companies saw record profits.”
To be sure, income isn’t the same as wealth, which has also grown since the pandemic. But earning a higher salary can help families build their assets, allowing them to buy homes, invest in education for their children and take other steps to cement their wealth.
The outsized income growth of the nation’s top-earning families before and after the pandemic may be one of the U.S. economy’s most important storylines, Murray said.
“Even though the bottom 20% of earners saw drastic increases in pay, their overall wealth share in the country actually decreased, as the rich became much richer,” he said.
After West Virginia, Mississippi had the second-lowest threshold for joining its top-earning households, at $333,597, according to GoBankingRates.
