Is making six figures a year considered rich? It depends on how big your six figure income is. Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards.
Atop 1% income earnerin America makes about $470,000 a year nowadays. Further, it takes at least $3 million to be a real millionaire now thanks to inflation. Therefore, if you want to be certain you are rich, you might as well shoot to make at least $470,000 a year. This way, your six figures a year will be in the top 1%.
Making Six Figures A Year As A top Income
Here’s a table I put together based off information for the IRS in 2019. The numbers are about 25% higher in 2021.
What is probably more relevant is how much thetop 1% income earner makes by age group.
Top Income Levels By Age Group
Ages 27 – 31:You are in the top 1% if you make roughly $170,000. You are in the top 0.1% if you make roughly $300,000.
Ages 32 – 36: You are in the top 1% if you make roughly $210,000. You are in the top 0.1% if you make roughly $570,000. We are now in the ideal income zone of $200,000 – $250,000 a year per person where maximum happiness is achieved and increases no further the more you make.
Ages 37 – 41:You are in the top 1% if you make roughly $260,000. You are in the top 0.1% if you make roughly $820,000. I’m a little surprised that making only $260,000 at this age puts you in the top 1%. Given the median age in the US is around 36 and the median income for the top 1% for all income levels is around $380,000.
Ages 42 – 46:You are in the top 1% if you make roughly $320,000. You are in the top 0.1% if you make roughly $1.1M. This age group finally breaks the $1M income barrier. Nobody is going to deny someone making over $1M a year is rich.
Ages 47 – 51:You are in the top 1% if you make roughly $360,000. You are in the top 0.1% if you make roughly $1.5M. $360,000 is a level which makes the most sense as a top 1% income earner based on IRS data and multiple media reports.
Ages 52 – 58:You are in the top 1% if you make roughly $350,000. You are in the top 0.1% if you make roughly $1.4M. Finally! The income levels are going down because people are finally living life a little more and not so focused on making more and more money.
Enjoy the fruits of your labor because you can't take it with you. Making six figures a year is pretty good. If you don't make six figures a year, you can learn how at almost any age. Just don't forget to spend it! Cherish every minute of your life!
Invest Your Money Wisely
Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile. Real estate also provides utility and generates income. Once I started making six figures a year, I actively invested as much of my year-end bonus as possible into real estate. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
In 2016, I starteddiversifying into heartland real estateto take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms.Take a look at my two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Recommendation To Build Wealth
Once you start making six figures a year, you need to start tracking your finances. Sign up forPersonal Capital, the web’s #1 free wealth management tool to get a better handle on your finances. You can use Personal Capital to help monitor illegal use of your credit cards and other accounts with their tracking software. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.
After you link all your accounts, use theirRetirement Planning calculatorthat pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing.I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time thanks to better money management.
FAQs
Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards.
Is 6 figures a year considered rich? ›
Making six figures a year is a significant accomplishment and can lead to a comfortable life. However, whether it's considered 'rich' depends on various factors, including location, lifestyle, and financial management. Richness is not solely about income; it's also about net worth, freedom, and quality of life.
How much money do I need to make a year to be considered rich? ›
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
How rare is a 6 figure salary? ›
What Percent of America Makes Six Figures? When you remove demographics such as infants, students, and stay-at-home spouses and focus only on full-time workers, around 18% of all earners in the US make at least six figures. Conversely, the median American household income in 2023 was approximately $44,225.
Is $100000 a year considered wealthy? ›
Is Earning $100,000 Considered Rich? Earning $100,000 is not considered rich either. You are considered middle class to lower middle class in expensive coastal cities. $100,000 is considered upper middle class in lower cost areas of the country.
What income is upper class? ›
While there's no definitive line, households in the top 20% of earners are generally considered upper class. According to the U.S. Census Bureau, the median household income in 2022 was $74,580. To reach the upper class in 2024, you'd typically need an income exceeding $153,000 – more than double the national median.
What is a good age to make 6 figures? ›
Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 54. The majority of people who make six figures will do so in their 30s.
What is the top 1% salary? ›
The "top 1%" is a term that generally refers to the wealthiest people in a population based on income or net worth. The data from the Economic Policy Institute (EPI) shows that annual wages for the top 1% in 2021 in the U.S. reached $819,324 on average.
Is 700k a good salary? ›
Earning $700,000 a year would put your household in the top 1% nationwide — and well above the middle class — and in any state in the South or Midwest. But that still won't cut it in seven states. The Northeast dominates the rankings, with five of the 10 states with the highest 1% thresholds lying in this region.
At what net worth are you rich? ›
But younger generations also had lower thresholds for what it takes to be rich, with Gen X pegging it at $1.2 million and millennials saying it requires $2.2 million. Boomers, meanwhile, had the highest yardstick for being considered wealthy, at $2.8 million.
Six figures can be anywhere between $100,000 – $999,000. Depending on where you live, six figures is considered rich by many people's standards. A top 1% income earner in America makes about $470,000 a year nowadays. Further, it takes at least $3 million to be a real millionaire now thanks to inflation.
Is it hard to make 6 figures a year? ›
It will take hard work to be able to earn that much or acquire that much wealth. For the average person, aspiring to earn a six-figure income involves navigating the complexities of strategic financial planning and career development, highlighting the importance of making informed decisions in these areas.
Is 100K the new middle class? ›
Making $100,000 now is the equivalent of making $30,000 back then: middle class and not particularly comfortable. But this didn't happen overnight in 2021 or 2007.
What salary counts as rich? ›
For example, you may be considered rich if you're in the nation's top 1% of earners. In 2022, that group saw an average annual income from wages of $785,968—nearly 19 times higher than the bottom 90%, according to the Economic Policy Institute Open in new tab.
Is making 100K a big deal? ›
A salary of $100,000 seems to be the magic number indicating the attainment of financial success. First generation high income professionals however, tend to notice quickly that the joy of reaching that goal is fleeting with much of the income going out as quickly as it comes in.
What is considered wealthy by age? ›
What net worth is considered wealthy largely depends on a person's age and location. The average net worth of 35-to-44-year-olds is $356,700. Someone in that age bracket with more than that amount could be considered wealthy.
What figure is considered wealthy? ›
In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.
Is a 6 figure salary good in the USA? ›
Zippia's data also shows that 56% of Americans believe that earning $100,000 per year would make them rich, but Zippia notes that a $100,000 salary is generally considered upper-middle class today, rather than rich, and can even be lower-middle class in some cities.
Is 60k a year good for a single person? ›
While this might be plenty for an individual living in a low-cost area, it doesn't work for a family in a pricey neighborhood. Keep reading to learn about the nuances and compromises of budgeting for rent on a $60,000 a year salary.
