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Here’s How Much Income It Takes to Be Considered Rich in Your State

Many Americans aspire to join the ranks of the wealthy, but the income threshold to be considered wealthy depends a lot on where you live.

It also takes significantly more income to reach the top 5% of earners than it did a few years ago, according to a new study from GoBankingRates.com, which examined state income data for the period from five years 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 rankings is West Virginia, where an annual income of $329,620 will put you among the richest earners. But you’ll need to earn more than double that amount, or $719,253, to join the richest 5% in Washington DC.

Americans’ fortunes have improved in recent years, in part due to the federal government’s pandemic stimulus efforts, which have doled out billions in aid to businesses and taxpayers, said senior researcher Andrew Murray in data content for GoBankingRates. At the same time, the country’s highest-earning households receive a larger share of income, fueling rising income inequality, according to census data.

“COVID relief policies supported the economy, leading to higher stock prices, housing and savings,” Murray told CBS MoneyWatch. “These conditions were particularly favorable to the wealthiest Americans, who experienced dramatic income increases, especially considering the fact that many companies reported record profits.”

Certainly, income is not the same thing as wealth, which also has grown since the pandemic. But earning a higher salary can help families build wealth, allowing them to buy a home, invest in their children’s education and take other steps to shore up their wealth.

The outsized growth in incomes of the nation’s top-earning families before and after the pandemic could be one of the most important scenarios in the U.S. economy, Murray said.

“Even though the poorest 20% of earners have seen their wages rise drastically, their share of overall wealth in the country has actually declined, as the rich have become much richer,” he said. declared.

After West Virginia, Mississippi had the second-lowest threshold for joining its highest-earning households, at $333,597, according to GoBankingRates.

At the same time, reaching the top 5 percent of earners requires much more in many Eastern states, with Connecticut’s threshold being $656,438 and New York’s threshold being $621,301, according to the study.

“It depends on the cost of living,” Murray said. “People in New York or Washington DC receive higher salaries than those in states with a lower cost of living, like Arkansas or Louisiana.”

Between 2017 and 2022, Idaho, Nevada and Washington saw the largest increases in the amount needed to be considered among their states’ top earners, according to GoBankingRates. Idaho residents need an additional $115,769 in annual income, while Nevadans need an additional $129,469. Washingtonians need to earn $166,144 more to join the top 5%.

The reason is due to changes in the economies of Idaho, Nevada and Washington in recent years, Murray said. Washington, for example, saw resident incomes increase 44% between 2017 and 2022, which Murray says is “likely due to Seattle’s growing reputation as a tech hub post-COVID.”

In Idaho, thousands of people moved to Boise during the pandemic, taking their wages from remote work with them, he said.

“In the case of Nevada, ranked second overall in the study, gambling became more easily legalized and accessible between 2017 and 2022,” Murray said. “This has led to significant profit increases for companies headquartered in Las Vegas.”

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