LOS ANGELES – Understanding what it means to be rich in America involves a nuanced consideration of factors like location, cost of living, and local economies, a recent study by GOBankingRates highlights.

Income Thresholds for Wealth Across States

New Jersey: High Cost of Living

• To rank among the top 20% of earners in New Jersey, individuals need an annual income of at least $180,558.
• The state’s affluent communities and proximity to New York City contribute to its high income threshold.

Mississippi: Lower Cost of Living

• Conversely, Mississippi requires a lower income of $101,447 to be in the top 20% due to its lower cost of living and economic structure.

California, New York, and Massachusetts: High Living Costs

• California demands an income of $171,387 for the top 20%, primarily due to pricey real estate and high living costs, especially in cities like San Francisco and Los Angeles.
• New York and Massachusetts also have high thresholds of $158,336 and $179,470, respectively, reflecting their urban living expenses.

Tennessee and Florida: Growing Economies

• Tennessee sets its top 20% threshold at $115,174, while Florida’s is slightly higher at $122,779, showcasing the upward trend in incomes in these southern states.

Illinois and Nebraska: Midwest and Great Plains

• Illinois requires $144,311 for its top 20%, indicative of its economic hub around Chicago.
• Nebraska sets its threshold at $124,069, reflecting moderate living costs and steady economic conditions in the Great Plains.

Defining Wealth

• The definition of wealth varies widely, with individuals typically classified as having a high net worth with $1 million in liquid assets.
• Very high net worth status might require $5 million to $10 million, while ultra-high net worth could entail $30 million or more.

Varied Metrics of Wealth

• According to IRS standards, a monthly income of around $45,000 qualifies someone as wealthy.
• However, reaching the top 1% as per the Economic Policy Institute would necessitate earning approximately $68,277 monthly.

Median Household Income and Elite Earners

• The median household income in the U.S. is approximately $71,000.
• To be in the top 20% of earners, one needs nearly double this amount, averaging around $130,545 per year.

Connecticut: Highest Income for Elite Earners

• To be in the top 5% of earners in Connecticut, individuals need an income of $602,707, the highest among all states.
• This reflects the state’s concentration of high-income jobs and proximity to New York’s financial industries.

Conclusion: Regional Economic Influence on Financial Benchmark

The study underscores the influence of regional economic conditions on the financial benchmark for wealth. From the high thresholds in states like New Jersey to the lower requirements in Mississippi, these disparities highlight the nuanced nature of defining wealth across America. For accurate and up-to-date news and insights, download The Local News App today.

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