Earning a high income and having a real financial plan are two different things, and the data shows the gap between them is wider than most high earners assume. A household with a substantial salary can still have surprisingly little in investable assets, especially early in a career, and even households that have already crossed into millionaire territory are not uniformly confident in their own planning. This article looks at where the high-income threshold actually sits, how income and net worth diverge, where the tax code puts the most pressure on high earners, and how many high earners actually have a formal plan in place.
The figures below draw on the U.S. Census Bureau and IRS-based household income percentile data compiled by DQYDJ, the Federal Reserve’s 2022 Survey of Consumer Finances, the Council for Community and Economic Research (C2ER) and Missouri Economic Research and Information Center (MERIC) cost-of-living index, the Tax Foundation’s 2026 federal tax bracket data drawn from IRS Revenue Procedure 2025-32, and Northwestern Mutual’s 2025 and 2026 Planning & Progress Studies, conducted by The Harris Poll. Figures reflect the most recent data available as of June 2026 and are rounded.
This data covers four key findings for high income earners:
- Where the high-income threshold actually sits, and what it is really worth once cost of living is factored in
- The surprising gap between high income and high net worth
- The tax and cash-flow pressures that hit high earners harder than their salary alone suggests
- How many high earners actually have a formal financial plan in place
This article is for informational purposes only and does not constitute investment, tax, or financial advice. Figures are national averages and do not reflect any individual’s circumstances. Consult a qualified financial professional before making financial decisions.
| By the Numbers |
|---|
74% vs. 34%Americans with $1 million or more in investable assets are more than twice as likely to work with a financial advisor as the general population, 74% versus 34%. |
Where the High-Income Threshold Actually Sits
Reaching the top 10% of U.S. household income takes about $251,000, but that threshold buys drastically different lives depending on where a household lives.
Household income combines every earner under one roof, which is why the thresholds run higher than most people expect. As of 2025, a household needs about $251,000 to rank in the top 10% nationally, more than triple that to reach the top 1%, and the gap between the top 10% and the top 1% is itself larger than the gap between the median household and the top 10%.
U.S. household income thresholds by percentile (2025)
| Percentile | Household Income Threshold |
|---|---|
| Median household (50th percentile) | $83,730 |
| Top 10% | $251,036 |
| Top 5% | $335,575 |
| Top 1% | $659,060 |
That $251,036 threshold is a single national number, but it stretches much further in some states than others. A household earning exactly that amount is living well below the top-10% lifestyle in Hawaii or California, and considerably above it in Oklahoma or Mississippi, once cost of living is factored in.
Real purchasing power of the top-10% income threshold, by state (2026)
| State | Cost of Living Index | Real Value of $251,036 |
|---|---|---|
| Hawaii | 185.0 | $135,700 |
| California | 142.3 | $176,400 |
| Massachusetts | 141.2 | $177,800 |
| New York | 125.1 | $200,700 |
| National Average | 100.0 | $251,000 |
| Ohio | 94.3 | $266,200 |
| Texas | 92.1 | $272,600 |
| Mississippi | 87.3 | $287,600 |
| Oklahoma | 86.0 | $291,900 |
The Gap Between High Income and High Net Worth
Among households earning more than $200,000 a year, net worth still varies enormously by age, and the youngest high earners have built up only a fraction of what a single year of their income suggests.
The Federal Reserve’s Survey of Consumer Finances shows that a high income does not automatically translate into a large balance sheet, especially earlier in a career. Households earning $200,000 or more under age 35 have a median net worth of well under half a million dollars, a figure that climbs steadily as the same income tier ages into its 60s and 70s.
Median net worth among households earning $200,000 or more, by age (2022)
| Age of Household Head | Median Net Worth |
|---|---|
| Under 35 | $470,000 |
| 35 to 44 | $1.1 million |
| 45 to 54 | $1.9 million |
| 55 to 64 | $2.6 million |
| 65 to 74 | $3.0 million |
| 75 and older | $2.7 million |
Reaching a high income also does not guarantee that a household is actually saving any of it. Federal Reserve data shows a wide gap in how many families report saving any portion of their income at all in a given year, split sharply by income level.
Share of families that saved any portion of income, by income level (2022)
| Income Group | Share That Saved Any Portion of Income |
|---|---|
| Bottom 20th percentile | 30.9% |
| All U.S. adults (national average) | 56.5% |
| Top 10th percentile | 83.7% |
Where High Earners Actually Struggle Financially
High earners cross more federal tax brackets in a single decade of income growth than most households cross in a lifetime, and several additional surtaxes apply only above specific high-income thresholds.
The federal income tax system is progressive, so a raise never reduces take-home pay, but high earners move through the upper brackets quickly. A single filer’s income can cross from the 24% bracket into the 37% bracket within a relatively narrow band of taxable income once bonuses, equity compensation, or business income are added in.
2026 federal income tax brackets affecting high earners
| Tax Rate | Single Filers | Married Filing Jointly |
|---|---|---|
| 24% | $105,701 to $201,775 | $211,401 to $403,550 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 |
| 37% | $640,601 or more | $768,701 or more |
On top of ordinary brackets, several additional taxes apply only above specific high-income thresholds, and some of those thresholds have not moved in over a decade, which means more high earners cross them every year even without a real increase in purchasing power.
Additional taxes that apply above high-income thresholds (2026)
| Additional Tax | Rate | Applies When |
|---|---|---|
| Net Investment Income Tax (NIIT) | 3.8% | MAGI exceeds $200,000 (single) or $250,000 (joint); applies to investment income |
| Additional Medicare Tax | 0.9% | Wages exceed $200,000 (single) or $250,000 (joint); applies to earned income |
| Alternative Minimum Tax (AMT) | 28% on income above the exemption | AMT exemption begins phasing out at $500,000 (single) or $1,000,000 (joint) in AMT income |
The Planning Gap: Access to Financial Advice Among High Earners
Millionaires are more than twice as likely to work with a financial advisor as the general population, and even among millionaires, roughly half say their own planning needs improvement.
Working with an advisor is associated with a meaningfully different outlook on retirement. Northwestern Mutual’s Planning & Progress Study found that Americans with a financial advisor expect to retire two and a half years sooner than those without one, and feel far more confident they will be financially prepared when the time comes.
Financial advisor usage and retirement confidence (2025 to 2026)
| Metric | Millionaires ($1M+ Investable Assets) | General Population |
|---|---|---|
| Work with a financial advisor | 74% | 34% |
| Average expected retirement age | 63.7 | 66.1 |
| Believe they will be financially prepared for retirement | 74% | 43% |
Even households that have already cleared the seven-figure mark are far from unanimous that their own planning is where it should be. Nearly half of American millionaires say their financial planning needs improvement, and almost two-thirds do not consider themselves “wealthy” despite meeting the traditional millionaire threshold.
How American millionaires view their own planning (2025)
| Finding | Share |
|---|---|
| Say their financial planning needs improvement | 49% |
| Do not consider themselves “wealthy” despite $1M+ in investable assets | 64% |
| Describe their net worth as self-made rather than inherited | 79% |
A Note on Methodology
Household income percentile data reflects 2025 figures compiled from Census Bureau and IRS-based sources. Net worth and savings-participation figures come from the Federal Reserve’s 2022 Survey of Consumer Finances, the most recent complete triennial wave, with the 2025 survey expected to release in late 2026. Cost-of-living figures reflect the C2ER and MERIC 2025 annual index as reported in mid-2026. Tax bracket and surtax figures reflect 2026 tax year parameters under IRS Revenue Procedure 2025-32. Financial planning and advisor-usage figures come from Northwestern Mutual’s Planning & Progress Study, conducted by The Harris Poll, drawing on both the 2025 and 2026 survey waves. All figures are rounded and reflect national averages.
Turn a High Income Into a Real Financial Plan
A high income creates opportunities that a generic plan, or no plan at all, will not capture: managing tax brackets and surtaxes deliberately, building net worth on a faster timeline, and closing the gap between what you earn and what you have actually built. A coordinated financial plan is how that opportunity gets captured instead of taxed and spent away.
Schedule a Consultation with Journey Advisory Group
To learn more about how Journey Advisory Group builds coordinated financial plans for high income earners, contact us at info@JourneyAdvisory.Group or call 800-749-7143. You can also visit JourneyAdvisory.Group to schedule a consultation with our team.
References
- DQYDJ, "Household Income Percentile Calculator, US," 2025 household income data compiled from Census Bureau and IRS sources. dqydj.com (accessed June 2026).
- U.S. Census Bureau, annual household income report, median household income data. census.gov (accessed June 2026).
- Council for Community and Economic Research (C2ER) and Missouri Economic Research and Information Center (MERIC), Cost of Living Data Series, 2025 annual index. meric.mo.gov (accessed June 2026).
- Federal Reserve Board, Survey of Consumer Finances (2022), released October 2023. federalreserve.gov (accessed June 2026).
- CompoundLadder, "Net Worth Percentile Table by Age and Income," computed from the Federal Reserve 2022 Survey of Consumer Finances public-use extract. compoundladder.com (accessed June 2026).
- Congressional Research Service, "Introduction to U.S. Economy: Personal Saving," citing Federal Reserve Survey of Consumer Finances (2022). congress.gov (accessed June 2026).
- Tax Foundation, "2026 Tax Brackets and Federal Income Tax Rates," citing IRS Revenue Procedure 2025-32. taxfoundation.org (accessed June 2026).
- Internal Revenue Service, guidance on the Net Investment Income Tax, Additional Medicare Tax, and Alternative Minimum Tax. irs.gov (accessed June 2026).
- Northwestern Mutual, 2025 and 2026 Planning & Progress Studies, conducted by The Harris Poll. news.northwesternmutual.com (accessed June 2026).
This material prepared by Journey Advisory Group, LLC is for informational purposes only and reflects publicly available data as of June 2026. It does not constitute investment, tax, or legal advice. Journey Advisory Group is a fee-based advisory firm and SEC-registered Registered Investment Adviser (RIA). Additional information about services, fees, and potential conflicts of interest is available in Form ADV Parts 2A and 2B through the SEC’s Investment Adviser Public Disclosure website at adviserinfo.sec.gov or by contacting the firm directly.