![\"Income](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/00dc5f1e23201c790d35088d102dac38.jpeg\")
Income is not as reliable a measure of wealth as metrics like net worth and levels of debt.Credit: Xavier Lorenzo \/ Getty Images Key Takeaways <\/p>\n
Income is not as reliable a measure of wealth as metrics like net worth and levels of debt.
Credit: Xavier Lorenzo \/ Getty Images Key Takeaways <\/p>\n
Americans, on average, say it takes $2.3 million to count as wealthy.<\/p>\n
Many measures of wealth\u2014including net worth and living debt-free\u2014are not directly related to income.<\/p>\n
A high-income earner carrying significant debt may be less financially secure than a debt-free person with a modest salary.<\/p>\n
Americans say you need $2.3 million to be wealthy and $839,000 to be “financially comfortable,” according to Schwab’s 2025 Modern Wealth Survey. But that number measures aspiration, not financial health.<\/p>\n
Wealth isn’t just income. Net worth<\/a>, debt load, retirement savings, and financial flexibility all shape how secure you actually are.<\/p>\n Top Income Brackets in the US <\/p>\n According to the latest figures available (tax year 2022), the top earners had the\u00a0following adjusted gross income (AGI)<\/a>:<\/p>\n Top 10%: $178,611 or higher<\/p>\n Top 5%: $261,591 or higher<\/p>\n Top 1%: $663,164 or higher<\/p>\n These amounts vary sharply by state. For the 2022 tax year, the District of Columbia and Connecticut had the highest top 1% thresholds, at about $992,000 and $976,000, respectively, followed closely by Massachusetts, California, and New Jersey.<\/p>\n On the other end, residents of West Virginia ($384,000), Mississippi ($406,000), and New Mexico ($417,000) needed far less to crack the top 1% in their states.<\/p>\n Nationally, the top 1% threshold is about eight times the median<\/a> household income of $81,604, as of 2024 (the latest available from the U.S. Census).<\/p>\n It’s important to note, however, that income and wealth<\/a> are two different things. Income is what you, or your household, earn each year. But wealth is the overall assets you hold.<\/p>\n “When people think rich, they think immediately of a dollar figure, an income. But it goes beyond that,” says Summer Broadhead, an advisor at Everthrive Financial Group.<\/p>\n Net Worth <\/p>\n “I have clients with millions of dollars in their retirement accounts, but I look at them and think they\u2019re going to be in trouble because their expenses are so high,” Broadhead says. “And then I have clients who have a few hundred thousand dollars, and I don\u2019t worry about them at all because they know how to control their expenses.”<\/p>\n An individual with a high income could still have a low net worth if they are carrying significant debt. A surgeon earning $400,000 with $800,000 in student loans and a jumbo mortgage may have a lower net worth than a teacher who paid off their house and invested steadily for 20 years.<\/p>\n Your net worth is the total value of all your assets (home, savings, investments) minus liabilities (mortgage, student loans, credit card balances). It gives you a more complete picture of your financial health<\/a> than income.<\/p>\n To increase your net worth, Broadhead suggests tackling debt<\/a>, especially high-interest debt such as credit card balances. She also finds that clients who invest early, even if it is only small amounts at first, build significant wealth over time.<\/p>\n “Make sure you\u2019re investing wisely,” says Broadhead. “If all your money is sitting in cash, it\u2019s not going to keep up with inflation<\/a>, which will be detrimental over your lifetime.”<\/p>\n Retirement Savings <\/p>\n What you have saved in retirement accounts<\/a> is another way to measure how “rich” you are, especially if you join the ranks of 401(k) millionaires. If you start setting aside money in a tax-advantaged retirement account early in your career, that gives compounding<\/a> a long time to work.<\/p>\n “Even just a small amount can make a big difference if you start early,” Broadhead said. “You can always increase your savings as your income grows.”<\/p>\n An important element of adding to your net worth through retirement savings, Broadhead says, is living within your means<\/a>, allowing you to have enough left over after making contributions to retirement accounts.<\/p>\n Living Without Debt <\/p>\n Average total consumer debt stood at $104,755 as of mid-2025, down slightly from $105,580 a year earlier, according to Experian. Home equity lines of credit (HELOCs<\/a>) grew 9% year over year\u2014the largest increase of any category\u2014as homeowners borrowed against rising property values.<\/p>\n Average credit card balances are up to $6,735 from $6,699 a year earlier\u2014they’re climbing as average APRs near 22%.<\/p>\n Carrying little or no debt frees up income for saving and spending, which, for many people, is what feeling rich actually means.<\/p>\n Financial Flexibility <\/p>\n In 2025, about 24% of U.S. households lived paycheck to paycheck<\/a>, according to a Bank of America Institute analysis. The squeeze hits hardest at lower incomes\u201429% of lower-income households spent almost all their earnings on necessities, up from 27% in 2023. But higher earners aren’t immune: about 19% of higher-income households also lived paycheck to paycheck, a pattern Bank of America economists attributed partly to lifestyle creep<\/a>.<\/p>\n Few feel rich living paycheck to paycheck. But if your living expenses are well below your income, you can increase both your actual wealth and your sense of living well<\/a>.<\/p>\n The Bottom Line <\/p>\n More Meaningful Measures of Wealth <\/p>\n