Geographic Variance in Wealth Benchmarks Revealed by GOBankingRates Study

A recent study conducted by GOBankingRates has revealed wide income variance required in order to be deemed wealthy across various regions of the United States. The analysis utilized data from the Internal Revenue Service (IRS) and identified earnings necessary for individuals to rank within the top 20% and top 5% earners in each state, shedding light on disparities that define financial success throughout America.
New Jersey emerged as an outlier with the highest threshold needed for entry into the top 20%, requiring a yearly income of at least $180,558 to qualify. This is due to New Jersey’s high cost of living and affluent communities near major cities like New York City. On the other hand, Mississippi requires an annual earnings figure of only $101,447 for individuals looking to be among the top 20% earners in that state; this reflects lower costs of living as well as different economic structures present within certain regions.
Being part of the top 20% earner demographic comes with distinct thresholds varying greatly across geographies. For instance, California demands an income level exceeding $171,387 annually to be considered wealthy in that state due to its pricey housing markets and living costs common to metropolitans such as Los Angeles and San Francisco. New York State ($158,336) and Massachusetts ($179,470), too, demand considerable earnings for an individual seeking the same top-ranked standing.
On contrasting notes, Tennessee’s threshold is $115,174 annually to be among its wealthiest 20%, while Florida requires a slightly higher income level of around $122,779 yearly. These figures illustrate how growing economies and the increasing popularity of southern states as destinations for businesses and retirees are pushing incomes upward across these regions.
In terms of regional differences within wealth benchmarks, Illinois necessitates an annual earning figure of roughly $144,311 to be considered wealthy there – this reflects the economic importance of Chicago. In contrast, Nebraska demands an income level just over a quarter-million dollars lower ($124,069) annually for individuals looking to rank among its wealthiest 20%.
The definition of being rich can vary significantly across thresholds ranging from very low to incredibly high levels as discussed in various financial classifications. According to SmartAsset’s report on this matter, an individual with $1 million worth of liquid assets is generally classified as having a substantial net worth; the range for those deemed ‘very-high net worth earners’ usually stands anywhere between 5 million dollars and approximately $30 million in total wealth holdings.
The amount required to be considered wealthy also varies based on metrics used, with IRS standards indicating that an individual earning around $45,000 monthly is generally classified as ‘wealthy’. However, the Economic Policy Institute (EPI) contends otherwise by placing its upper limits of qualifying for elite earners status at approximately $68,277 a month.
According to data from the US Census Bureau, median household income in America stands around $71,000 per annum. In order to reach that top 20% earner demographic, an individual would need almost double this sum yearly or approximately $130,545.
The threshold for being among the wealthiest 5% of earners in Connecticut is a staggering $602,707 annually – the highest across all states due to its concentration of high-income jobs and proximity to New York’s financial industries. These disparities illustrate that regional economic conditions play an essential role in determining wealth benchmarks nationwide.