In the U.S., earning a six-figure income is often seen as the threshold for joining the high-income bracket.

**Key Takeaways** - A six-figure annual income is required to be considered high-income in the U.S. - Other wealth metrics—such as net worth, retirement savings, debt-free living, and financial flexibility—are not directly tied to income. - A high earner burdened with credit card debt may actually be less wealthy than a middle-income individual with no debt.

**What Does It Mean to Be "Wealthy"?** According to a Charles Schwab survey, Americans generally believe a net worth of $2.5 million defines wealth, while $778,000 is sufficient for "financial comfort." However, wealth can be measured in multiple ways, including net worth, income, debt levels, and retirement preparedness.

**High-Income Benchmarks in the U.S.** To rank among the top earners, annual income must reach six figures. Based on the latest data (2021 tax year), the adjusted gross income (AGI) thresholds are: - Top 10%: $169,800 or more - Top 5%: $252,840 or more - Top 1%: $682,577 or more

These figures vary significantly by state. For example, in California, Connecticut, Massachusetts, New Jersey, and Washington, earning over $1 million was needed to enter the top 1% in 2021, while in Mississippi, New Mexico, and West Virginia, incomes below $500,000 sufficed. Notably, the top 0.1% earned an average of $3.31 million annually—far exceeding the national average salary of $70,784.

**Alternative Measures of Wealth** Wealth and income are distinct concepts: - **Income**: Annual earnings for you or your household. - **Wealth**: Total assets you own.

"People often equate wealth with a specific dollar amount or income, but it’s much broader," says Summer Broadhead, a CPA and CFP at Everthrive Financial Group.

1. **Net Worth** Net worth—total assets minus liabilities—provides a clearer picture of financial health than income alone. Assets may include homes, savings, and vehicles, while liabilities encompass mortgages, credit card debt, and student loans. A high earner with heavy debt could have a low net worth, while a frugal saver or early investor might accumulate greater wealth despite modest earnings. Broadhead advises prioritizing high-interest debt repayment and investing early, even with small amounts, to build long-term wealth.

2. **Retirement Savings** Retirement accounts, particularly "401(k) millionaires," are another wealth indicator. Starting early with tax-advantaged accounts leverages compound growth. "Even small contributions add up over time," Broadhead notes. She emphasizes living within one’s means, as overspending can jeopardize even sizable retirement funds.

3. **Debt-Free Living** Experian data shows U.S. consumer debt rose from $104,215 in 2023 to $105,056 in 2024, with HELOCs (up 7.2%) and credit card balances (up 3.5%) driving the increase. High-interest debt, like credit cards, erodes savings. Minimal or no debt fosters financial security, regardless of income.

4. **Financial Flexibility** Bank of America’s analysis reveals that 25% of U.S. households live paycheck-to-paycheck, including 20% earning over $150,000 annually. Spending below your income boosts both actual wealth and the perception of prosperity.

**Conclusion** Wealth isn’t limited to the top 1% or even 10% of earners. Reducing debt, growing retirement savings, and maintaining a balanced lifestyle can enhance net worth and secure a stronger financial future.