Income Needed to Be Among the Top Earners in America's Largest Cities - 2020 Edition

You work hard to earn your income, but where do you stack up against others in your city and across the country? In 2018, the working households that comprised the top 20% of earners nationwide made at least $125,322 throughout the year. In contrast, the working households in the bottom 20% of earners made $25,434 or less. As a ratio, top-earning households made almost five times as much as bottom-earning households.

The Census Bureau annually reports estimates of household income quintile limits, but it’s important to note that income distributions vary widely across cities. In this study, SmartAsset took a closer look at the income needed to be a top earner in America’s largest cities. We considered the 100 largest cities in the U.S. and ranked cities according to the income needed to be in the top 20% of working households. Additionally, we discussed the ratio between top-earning and bottom-earning households by city. For details on our data sources and how we put all the information together to create our final rankings, check out our Data and Methodology section below.

This is SmartAsset’s second study on the income needed to be a top earner in America’s largest cities. Read last year’s version here.

Key Findings

• California has many high-earning households. The top three cities where households need the highest income to be a top earner are located in California. In all three cities - San Francisco, Fremont and San Jose - the top 20% of households according to income make upwards of $219,000 annually. Additionally, more than half of the households in all three cities make more than $110,000 each year.
• Large gaps in Boston and New Orleans. In these two cities, top-earning households make more than eight times as much as bottom-earning households. Census estimates show that the household incomes needed to be in the top 20% of earners in Boston and New Orleans were $157,456 and $97,544, respectively. By contrast, the bottom 20% of households made less than $19,342 in Boston and less than $12,138 in New Orleans. As a ratio, top-earning households in Boston and New Orleans made 8.14 and 8.04 times, respectively, what bottom-earning households did.

1. San Francisco, CA

Though the 2017 income needed to be a top-earning household in San Francisco was $231,347, the 2018 income needed to be a top-earning household exceeded $250,000, a figure beyond which the Census Bureau does not report specific income details. This high figure for wealthy households is perhaps unsurprising given San Francisco’s high cost of living. Even the median household income in the city is more than $112,000 annually.

2. Fremont, CA

Like last year, Fremont, California takes the second spot in our list of the cities with the highest income needed to be a top earner, with the required income increasing by more than 8%. Specifically, in 2017, the annual income needed to be in the top 20% of households was $224,776, while in 2018, it was $243,080.

3. San Jose, CA

In 2018, the top quintile of working households in San Jose, California made at least $219,023. Compared to San Francisco, the difference between the bottom quintile of households and the top is less severe in San Jose. The ratio between the top and bottom-earning households in San Francisco is greater than seven while in San Jose it is similar to the national average, hovering around five.

4. Arlington, VA

In 2018, Arlington, Virginia had the second-highest median household income of the 100 largest U.S. cities, following only Fremont, California. As a result of high incomes across the board, the bar is higher to be in the top 20% of earners. Census data shows that top-earning Arlington households made more than $216,605 in 2018.

5. Seattle, WA

With many high-paying jobs opening up in the tech hub of Seattle, Washington, the income needed to be a top earner has gone up. Last year, using Census data from 2017, we found that the lower limit for the top 20% of working households was $172,235. Census data from 2018 showed an increase of 10.5%, with households needing to make more than $190,000 each year to be in the top quintile according to income.

1. Detroit, MI

Detroit, Michigan has the lowest income needed to be a top earner of the 100 largest cities in America. To be in the top 20% of earners in Detroit, households must make at least $65,603, which is roughly $3,700 more than the national median household income, $61,937. In fact, the threshold to be in the top 5% of working households in Detroit ($122,330) is lower than the threshold to be in the top 20% of working households nationwide ($125,322).

2. Cleveland, OH

In 2018, the income needed to be a top-earning household in Cleveland, Ohio was $70,632, about 44% lower than the national average. Since Ohio’s highest tax bracket only applies to income above $217,400, many of these top earners will have relatively low tax rates compared to top earners in other cities.

3. Toledo, OH

Following Cleveland, Toledo is the second Ohio city with the lowest income needed to be a top earner. The top 20% of households in Toledo made upwards of $73,087 in 2018, moving down from $75,526 in 2017. This threshold to be a top-earning household is about 42% lower than the national average ($125,322).

4. Hialeah, FL

Hialeah, Florida has a lower ratio between top-earning households and bottom-earning ones than the other cities in the top five places where top earners make the least. In 2018, the top 20% of households according to income in Hialeah made more than $77,324 while the bottom 20% made less than $17,120. In other words, top earners made about 4.52 times what bottom earners did.

5. Newark, NJ

The median household income in Newark, New Jersey was a little less than $38,000 in 2018, and top-earning households made about 5.80 times what bottom-earning households did. Specifically, the threshold to be a top-earning household was $82,012 and the upper threshold for bottom-earning households was $14,140.

Data and Methodology

All data for this report comes from the Census Bureau's 1-year American Community Survey. We specifically looked at the income quintiles in the 100 largest U.S. cities and ranked cities according to the household income needed to be in the top fifth of the income distribution.

Tips for Increasing Your Wealth

• Take advantage of compound interest. Even top earners must focus some attention on the ways they spend and save their money. One of the most important things to note about saving is that it helps to start early. Compound interest is interest that’s generated from existing earnings. That is, when you put money into a savings account earlier, the interest compounds - you earn interest on the money you initially invested as well as the interest that money has already made.
• Contribute to a 401(k) or IRA. One of the best ways to save for retirement is through a retirement savings account. A 401(k) is an employer-sponsored defined contribution plan in which you divert pre-tax portions of your monthly paycheck into a retirement account. Some employers will also match your 401(k) contributions up to a certain percentage of your salary, meaning that if you chose not to contribute, you are essentially leaving money on the table. If your employer does not offer a 401(k) plan, an IRA is another great option.
• Consider a financial advisor. A financial advisor can help you make smarter financial decisions to be in better control of your money. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals get started now.

Questions about our study? Contact us at press@smartasset.com