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Topics: Money
Alice Wade
While you might think coming home with a fat pay check is enough to be considered 'rich', but a new report shows it’s where you live that really counts.
Landing yourself a spot in the top 10 per cent varies enormously from state to state and can mean banking anything from $198,000 to $386,800 a year, according to a report by Visual Capitalist.
For instance, households in Massachusetts need to earn nearly twice as much as those in West Virginia to be considered rich.
Meanwhile, people in Washington DC, have to bring home a far higher $330,800 to reach the top, well over the amount in neighboring states. This is thanks to its large population of high-paying government-adjacent workers.
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In contrast, the lowest threshold is in West Virginia, where earning under $200,000 is enough.
In 2024, a household needed to earn about $210,000 or hold $1.8 million in net worth to be classified among the richest 10 per cent, according to a recent Visa analysis.
Under this definition, around 12.2 million American households were considered rich, with Gen X accounting for 57 per cent of them, while Boomers made up 12 per cent, per Newsweek.
The younger generations, including millennials and Gen Z, comprised a combined 31 per cent.
Before the 2020 pandemic sparked inflation worldwide, the threshold was a far lower $170,000.
The reason being wealthy varies so much across the country is due to the fact that living costs are vastly different from state to state.
Household bills, groceries, and everyday expenses can come with wildly different price tags according to the area you're in.
It was for this reason that thousands of Americans moved across the country during the pandemic, when remote work surged, and people could choose to relocate to places where living costs could be kept lower.
The analysis, based on data from the German tax platform BuchhaltungsButler and the Berlin-based data studio DataPulse Research, revealed that the state requiring the highest income is the District of Columbia, where workers need to earn at least $635,000 per year.
The top 10 states where it takes the biggest income to reach the wealthiest 10 per cent are Massachusetts, Connecticut, New Jersey, Washington, New York, Hawaii, Alaska, and California, with Maryland and Rhode Island tied.
In many of these, this means making more than double the middle-class income, while in the priciest states, including New York, Connecticut, and Massachusetts, workers must earn a whopping three times as much.
Again, this is because these states come with the highest living costs.
Further down the scale, people in Arkansas or Mississippi need only earn $270,000 to fall into the rich bracket.