Business

How Much Income Puts You in the 1 Percent if You're 30, 40, or 50?

Does $300,000 put you in the top 0.1 percent? It does if you're under 31.

By Derek Thompson
Andy Clark/Reuters

The richest percentile of Americans makes many hundreds of thousands of dollars a year. So how could a $135,000 salary make you a one-percenter? If you're 31 or younger, that figure puts you ahead of 99 percent of your age group.

To determine what salary you'd have to earn at every age to stay in the top percentile—or even in the top 0.1 percent—here's your at-a-glance chart, from data shared by Fatih Guvenen and Greg Kaplan with The Atlantic. (The median age of both 1 percenters and 0.1 percenters is in the upper 40s.)

The 1 Percent (and 0.1 Percent) for Every Age

This chart partially explains why the 1 percent is such a fluid club (about half of the top 1 percent flips over every year.) To stay in the top percentile, a 30-year-old earning $130,000 in 2010 would have to raise her salary by $80,000 by 35, and then another $70,000 before she turned 45.

The gap between the top 1 percent and tippy-top 0.1 percent has grown at every age level since 1983—by 16 percent for twentysomethings and by 25 percent for fiftysomethings. The gap between young and old 1 percenters has grown, too, as you can see below.
The Top 1 Percent
Guvenen et al
The Top 0.1 Percent
Guvenen et al

Careful eyes might note that it appears that incomes are flat-lining for the top 0.1 percent. That doesn't make any sense. Haven't we all heard that the richer are getting richer, and the even richer are getting even-richerer?

Yes, we have, and yes, they are. This data considers salary and wage income. But the wealthiest Americans draw more of their income from investments. For the 1 percent, 0.1 percent, and 0.01 percent, capital gains account for 22, 33 and 42 percent (respectively) of their average income. Wages, as I've said, are for normal people. Investments are for the rich.

These numbers come from a paper by Suvenen, Kaplan, and Jae Song on the changing demographics of the top 1 percent. It's not a glass ceiling for women, they argue, so much as a "paper floor," where top-earning women are much more likely to "drop through" from the higher percentiles. Consider that women account for:
  • 49 percent of the bottom 99 percent
  • 11 percent of the 1 percent (not including the top 0.1 percent)
  • 9 percent of the top 0.1 percent