Are You Wealthier Than You Think? How To Accurately Assess Your Financial Standing

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.

Wealth isn’t just income. Net worth, debt load, retirement savings, and financial flexibility all shape how secure you actually are.

Top Income Brackets in the US

According to the latest figures available (tax year 2022), the top earners had the following adjusted gross income (AGI):

• Top 10%: $178,611 or higher
• Top 5%: $261,591 or higher
• Top 1%: $663,164 or higher

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. 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.

The top 1% threshold is about eight times the median household income of $81,604, as of 2024 (the latest available from the U.S. Census).

Other Measures of Wealth

Wealth and income are two different things.

Income is what you, or your household, earn each year. Wealth is the assets you hold.

“When people think of rich, they think immediately of a dollar figure, an income, but it goes beyond that,” says Summer Broadhead, an advisor at Everthrive Financial Group.

Net Worth

“I have clients with millions of dollars in their retirement accounts, but I look at them and think they’re 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’t worry about them at all because they know how to control their expenses.”

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.

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 than income.

To increase your net worth, Broadhead suggests tackling debt, especially high-interest debt such as credit card debt. She also finds that clients who invest early, even if it is only small amounts at first, build significant wealth over time. “Make sure you’re investing wisely,” says Broadhead. “If all your money is sitting in cash, it’s not going to keep up with inflation, which will be detrimental over your lifetime.”

Retirement Savings

Retirement savings are 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, the longer compounding has to work.

“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.”

An important element of adding to your net worth through retirement savings, Broadhead says, is living within your means.

Living Without Debt

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) grew 9% year over year—the largest increase of any category—as homeowners borrowed against rising property values.

Average credit card balances are up to $6,735 from $6,699 a year earlier—they’re climbing as average APRs near 22%.

Carrying little or no debt frees up income for saving and spending, which, for many people, is what feeling rich actually means.

Financial Flexibility

In 2025, about 24% of U.S. households lived paycheck to paycheck, according to a Bank of America Institute analysis. The squeeze hits hardest at lower incomes—29% 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.

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.

The Bottom Line

You don’t need a top-1% income to build real wealth. A paid-off mortgage, a growing 401(k), and expenses that leave room to breathe—that’s wealth many income figures can’t capture.