Try out the Income Percentile Calculator to see if your income can beat the average American income for every age group.
I’ll share the income percentile calculator results for the average American and the top 1 percent American.
We’ll also talk about how unequal America is, and how it’s harder and harder to retire for those who are not in the top 10%.
Income Percentile Calculator
Enter your age and your annual income, before taxes, to see what the income percentile calculator calculates as your income percentile for your age group.
What is your income percentile? And do you feel like this income percentile calculator accurately represents how you feel about your income? Comment below!
What is the Average American Income?
The average American income is $55,373 if you add up everyone’s income and divide it by the total number of people,
However, this is not a great way to understand “average” income.
Why? Because the average income between myself and Jeff Bezos, who made billions of dollars last year, is hundreds of millions of dollars, which is much more skewed toward Bezos!
Therefore, the “average” is not a good measure of how much ordinary Americans make, on “average”.
Instead, we should look at the median income of Americans. If you rank everyone’s income from the largest to the smallest, we will take the income of the person that is right smack in the middle.
So what is the median American income? The median American income is $39,100, which is a more accurate representation of “average”.
Income Percentile By Age
If you put in every age and salary into the income percentile calculator, you get the following results:
The table above shows that at the lower percentiles, income is pretty much the same, doesn’t increase as the person gets older.
But for those at the highest income percentiles, their income increases quite drastically in their 20s and 30s.
Income of the Top One Percent
Let’s say a person remains at a particular income percentile, how does this person’s income changes as the person ages?
Based on the income percentile calculator, we get the following graphs:
Each line is a particular income percentile, with the x-axis showing age, and the y-axis showing the actual income.
The graph above shows that people below the 90th income percentile make about the same amount of money all of their lives.
People with income above the 90th percentile, particularly the top one percent, see their income rapidly increase in their twenties thirties, and peak by the time they hit 40 years of age.
Of course, you could very well be in the bottom percentile in your earlier years and then jump percentiles in your later years.
But in general, this is another evidence of the inequality guide I wrote about America, where the top one percent have been the ones hoarding all the money.
How Many People Make Over $400K?
President Biden has a tax plan to raise taxes on those making above $400K, presumably because they are the richest of the rich.
According to my analysis above, it is indeed true that only the top 1% make above $400K a year. More than that, the top 1% only starts to make above $400K well into their 30s and later.
As such, I estimate that out of the three hundred million Americans living in the United States today, only a little over a one million people make over $400K per year in come.
If we assume that these one million people who make more than $400K a year live across 200 U.S. cities, then on average, we have about 5,000 people who are making $400K a year in any city. When we look at it this way, we realize how scarce these high income earners are.
But of course, these high income earners are likely highly concentrated in either New York City or San Francisco.
How Many People Make Over $100K?
Roughly speaking, only the top 10% of the income earners in the U.S. eventually make more than $100K a year.
Using the same assumption above, I think roughly ten million people in the U.S. make more than $100K a year.
Summary: Income Percentile Calculator
There are many ways to make more money. And they don’t always involve back-bending, brain-wrecking work.
By using the income percentile calculator, you can see where you sit. But wherever you sit, know that this is not the end.
More important than income, you have to know save more money, and invest your savings in the right places (aka, index funds) for a very long time in order to get rich.
Many people who make $400K a year end up broke because they bought too much expensive stuff and never saved.
What job or business do you have? And how much are you making in come? Comment below!
Are you putting all of your income into mortgage? Reconsider! Read the 2-series guide: Stocks vs Real Estate: Never Buy a House as Investment
Learn what the Average American Ne Worth is by reading What’s the Average Net Worth by Age? Use This Calculator to Find Out
Understand why America is increasingly harder to get rich. Check out How to Make Money Despite Wealth Inequality