To be a part of the top 5% of earners in an expensive state like New Jersey, where taxes and real-estate costs are among the highest in the country, you'll need to make a lot of money.
That's according to financial website GOBankingRates, which analyzed data from the U.S. Census Bureau's 2017 American Community Survey and the Economic Policy Institute's income inequality report to determine the average income residents earn in each state and Washington, D.C.
Here's how much you have to earn to be in the top 5% in the Garden State:
- Average top 5% annual income: $475,827
- Minimum threshold needed to make the top 5%: $250,000
New Jersey is one of the eight states (including Washington, D.C.) that require at least $250,000 in income to crack the top 5%, the data shows. The list also includes notoriously pricey places such as California, Connecticut and New York.
But while it certainly takes a lot of money to make New Jersey's top 5%, it takes a lot more to make the top 1%. The minimum annual income needed to crack that is $588,575, the Economic Policy Institute reports, which is almost 40% higher than the national threshold of $421,926.
New Jersey ranks No. 3 in terms of states where you need to most money to make the top 1%. Connecticut and D.C. rank No. 1 and No. 2.
Location certainly plays a role in how much money is needed to be considered rich, but wealth is also a mindset, according to a recent poll from data firm YouGov.
"Although people become less likely to consider themselves poor the more money they make," the report says, "they don't really become much more likely to consider themselves rich."
Of those earning between $40,000 and $60,000 a year, 7% consider themselves "rich." But when it comes to high-earners, those making $90,000 to $150,000 a year, just 9% consider themselves "rich" and 5% actually classify themselves as "poor."
"The higher your income," the report says, "the higher you set the bar."
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