To be a part of the top 5% of earners in an expensive city like Washington, D.C., where taxes and real-estate costs are among the highest in the country, you’ll need to bring in a lot of money.
That’s according to financial website GOBankingRates, which used “data from the U.S. Census Bureau’s 2017 American Community Survey and the Economic Policy Institute’s income inequality report to determine the average income for each state” and Washington, D.C.
“You might be surprised to learn,” the report says, “that there’s a vast discrepancy between the 5-percenters in one state as compared with some others,” and with the nation’s capital.
Here’s what how much you have to earn per year to be in the top 5% in the nation’s capital:
- Average top 5% annual income: $582,044
- Minimum threshold needed to make the top 5%: $250,000
The minimum annual income needed to crack D.C.’s top 1% is $598,155, which is about 40% higher than the national threshold of $421,926. And, GOBankingRates notes, “although it’s not technically a state, residents of the nation’s capital earn the highest average salary anywhere in the country, at $116,090.”
While location certainly plays a role in how much money is needed to be considered rich, wealth is also a mindset, according to a recent poll from data firm YouGov.
“Although people become less likely to consider themselves poor the more money they make,” the report says, “they don’t really become much more likely to consider themselves rich.”
Of those earning between $40,000 and $60,000 a year, 7% consider themselves “rich.” But when it comes to high-earners, those making $90,000 to $150,000 a year, just 9% consider themselves “rich” and 5% actually classify themselves as “poor.”
“The higher your income,” the report concludes, “the higher you set the bar.”
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