If you’re trying to keep up with the Joneses, you need to know how much this proverbially wealthy American family has at its disposal. And that means we need to know what the average American household earns annually, and how much wealth it owns. As you move up the scale, the numbers accelerate, with the top 1 percent having much more than the average.
Here are the average incomes and wealth of Americans in the top 1 percent.
What is the average wage for Americans and the top 1 percent?
The table below contains data on Americans’ wages from the Social Security Administration.
- For 2023, the average wage for working Americans was $61,136.
- The average wage of those in the top 1 percent of wage earners that year was $785,968.
- In the rarefied top 0.1 percent, average income in 2023 was more than $2.8 million.
Here’s how a few remaining categories break down by cohort and year.
Dollar figures are in 2023 dollars. Source: Economic Policy Institute analysis of Social Security Administration data
| Category | 2023 | 2023 |
|---|---|---|
|
Dollar figures are in 2023 dollars. Source: Economic Policy Institute analysis of Social Security Administration data |
||
| Average wages | $61,136 | $62,889 |
| Average wages of the bottom 90 percent | $40,845 | $40,928 |
| Average wages of the 90th-99th percentile | $183,511 | $187,609 |
| Average wages of the top 1 percentile | $785,968 | $916,928 |
| Average wages of the top 0.1 percentile | $2,817,436 | $3,707,327 |
This social security data includes all wages, salaries, bonuses, severance payments and other similar compensation paid to employees, including exercised stock options, which are taxed as employment income. However, realized capital gains are not included, although these are subject to taxes.
These income figures therefore show how much the average group member receives as income from work. But the higher you go on the scale, the more likely it is that the member has unearned income such as dividends and capital gains – which again are not reflected in this data.
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What is the average wealth of Americans and the top 1 percent?
The table below provides data on Federal Reserve wealth, including FRED data from the St. Louis Fed, which shows that there were 131.4 million U.S. households in 2023.
- As of the second quarter of 2023, the average American household had $1.09 million in assets.
- The average wealth of households in the top 1 percent was about $33.4 million.
- In the top 0.1 percent, the average household had assets of more than $1.52 billion.
Here’s how the remaining cohorts break down by percentile.
| Category | Total cohort assets (share) | Wealth per household |
|---|---|---|
|
Please note: Due to rounding, the figures do not add up to 100 percent. Sources: FRED household data; wealth data from the Federal Reserve, with figures as of the second quarter of 2023 |
||
| Average wealth | $143.72 trillion (100 percent) | $1.09 million |
| Average wealth of the bottom 50 percent | $3.68 trillion (2.6 percent) | $55,998 |
| Average power of the 50th – 90th percentile | $44.09 trillion (30.7 percent) | $838,634 |
| Average power of the 90th – 99th percentile | $52 trillion (36.2 percent) | $4,395,954 |
| Average power of the 99th – 99.9th percentile | $23.9 trillion (16.6 percent) | $18,367,709 |
| Average wealth of the top 0.1 percent | $20.05 trillion (14.0 percent) | $1,525,480,469 |
The key figures here are not just the average wealth per household, but also the share of each household, especially at the top. For example, according to the Federal Reserve, the top 1 percent of households own 30.6 percent of total wealth. But only the top 0.1 percent own 14 percent of the total wealth, giving them a staggering average of more than $1.52 billion per household.
Even though the average wealth per household is over $1 million, the figure is much higher due to the enormous wealth at one end of the wealth distribution.
Don’t confuse high earners with the rich
You can measure whether you belong to the top 1 percent in two important ways: income and wealth. Income is the amount of money you earn annually, while wealth is the amount of assets you own. Although these categories are often correlated, they are not the same. This means that high earners often own a lot of assets, but this does not necessarily mean that they spend a lot.
For example, the wealthy may have relatively low incomes, for example if a large portion of their wealth is tied up in illiquid assets such as a house or even in illiquid or non-dividend paying stocks. Although they may have a high net worth, they are unable to generate income from the illiquid asset and therefore must continue with a relatively low income if they intend to continue owning that asset.
Likewise, high earners generate a lot of money every year, but they don’t have to be rich. Those who spend all their income may not build wealth if their money doesn’t go into assets.
Those looking to build wealth over time may want to work with a financial advisor or wealth manager to help them find smart strategies to turn income into wealth.
In short
If you want to build wealth, your decisions must reflect that fact. While those with a lot of wealth can turn it into income, those with high incomes but little wealth have only one way to join the ranks of the wealthy: be a disciplined saver and make your money work for you.
