NJ’s Top 1 Percent: See Earning Threshold For Garden State’s Richest

NEW JERSEY— There’s rich, and then there’s “the 1 percent” rich. But how much money do you have to make to breathe the rare air of the ultra-wealthy? In New Jersey, it's more than $800,000 — and these high earners pay one of the steepest tax rates in the country.

The top 1 percent of earners hold over a third of the total wealth in the United States, according to a Congressional Budget Office report from 2022. That is up from 27 percent in 1989.

Nationally, households making $652,657 per year are considered to be in the top 1 percent. But the threshold varies widely from state to state: from as little as $368,000 to as much as $953,000, a study by financial advisors SmartAsset said.

SmartAsset analyzed data from the IRS and Bureau of Labor Statistics to determine the minimum income required to be among the top 1 percent of earners in each state. States were ranked by the income threshold needed to be considered in the top 1 percent of earners.

The top two states in SmartAsset’s study require an annual income of more than $900,000 to be in the top 1 percent of earners: Connecticut, where the threshold is $952,902; and Massachusetts, where the threshold is $903,401.

New Jersey’s threshold is fourth on the list, as you need an annual household income of at least $817,346 to be in the top 1 percent. Taxpayers at the top of the income ladder in New Jersey pay an average effective tax rate of 28.01 percent, which is the third-highest rate across SmartAsset’s study.

There are certainly some "1 percenters" in the Garden State, as Forbes listed three New Jersey billionaires among the richest in the world. New Jersey also has the second-highest floor for the top 5 percent of earners, at $333,114, according to SmartAsset.

Six of the 10 states with the lowest income thresholds are located in the Southeast, the study authors said. The state with the lowest income threshold is West Virginia, where the top 1 percent of earners make $367,582 or more. SmartAsset's study found that income thresholds are generally higher in the Northeast to be among the ultra-wealthy.

These earners in the highest echelons make more than the average American thinks they would need to achieve financial freedom. A recent study by Bankrate found that $483,000 is the threshold people would need to make before they felt they were “rich.”

And, the Bankrate poll found that Americans feel they need about $233,000 a year on average to be financially comfortable.

However, both of these amounts varied based on how much respondents make. People making under $50,000 per year said they would need less money, on average, to feel financially comfortable as well as to feel rich/attain financial freedom. Those making $100,000 or more had higher totals. Here's a look at what the Bankrate poll found among people at certain income levels:

Annual income required to feel "comfortable" or financially secure

• Making under $50,000: Would need $184,000
• Making between $50,000 and $79,999: Would need $208,000
• Making between $80,000 and $99,999: Would need $246,000
• Making $100,000 or more: Would need $341,000

Annual income required to feel "rich" or attain financial freedom

• Making under $50,000: Would need $406,000
• Making between $50,000 and $79,999: Would need $494,000
• Making between $80,000 and $99,999: Would need $499,000
• Making $100,000 or more: Would need $600,000

Bankrate says one reason for this "higher bar for comfortability" is that people may adjust their standard of living, along with their salary. A majority of Americans (72 percent) say they would plan to travel, update their home with new furniture and appliances, upgrade to a nicer car, and make other discretionary spending increases if they got a raise, Bankrate found.