How Much You Need To Be in the Top 5% in Every State

GOBankingRates analyzed the U.S. Census Bureau’s 2021 American Community Survey to estimate the pre‑tax income required to be in each state’s top 5% of households, reporting the top‑5 threshold, the average income of that cohort and the state median; data are current as of May 31, 2023. The report shows significant geographic variation and concentration—many high‑cost states have a $250,000 threshold, while the average top‑5 household income ranges from roughly $300k in lower‑income states to $670k in the District of Columbia (New York’s top 5% average is $574k, California $555k), and the top 5% earn between about 4.9x and 7.6x the median household depending on the state. These disparities quantify regional wealth concentration with implications for consumer demand, wealth‑management targeting and regional asset allocation strategies.

Analysis

GOBankingRates used the U.S. Census Bureau’s 2021 American Community Survey (ACS) household income quintile upper limits to estimate the pre‑tax income required to be in each state’s top 5%, reporting the lower bound for the top 5%, the average income of that cohort and the state median; dataset is current as of May 31, 2023. Many high‑cost states show a $250,000 threshold for the top 5% (including CA, NY, MA, NJ, TX and several others), while the average income of the top 5% ranges from roughly $308k in lower‑income states to $670,768 in the District of Columbia. The lowest top‑5 thresholds include Mississippi ($179,799) and West Virginia ($183,110), and the ratio of the average top‑5 household to the state median varies materially from about 4.9x (Alaska) to 7.6x (New York), underscoring regional concentration of wealth. For investors, these cross‑state disparities are relevant for sectoral and regional exposure: concentrated high incomes support premium consumer spending, luxury and wealth‑management demand in high‑threshold states, while lower thresholds imply structurally weaker high‑end consumption; note the data are pre‑tax, based on 2021 ACS and subject to change with newer releases.

Key Decisions for Investors

• Consider overweighting consumer discretionary, luxury, premium residential real estate and wealth/asset‑management exposure focused on high top‑5 states such as DC, New York and California where average top‑5 incomes exceed $500k,
• Allocate to regional banking and fintech firms with affluent customer bases in states showing high top‑5 averages because fee and deposit growth may be more resilient,
• Treat this dataset as a thematic input rather than a timing signal: confirm with updated ACS releases and state‑level consumption and housing metrics before making large reallocations due to the 2021 vintage and pre‑tax income basis