Comments on: Joining the Top One Percent or Top Five Percent Club

By: Steve

Steve — Tue, 02 May 2017 19:15:21 +0000

In reply to Geoff.

Geoff, I don’t understand. Are you suggesting that the oldest 5% of the population are typically top fiver percenters?

BTW, you’re commenting on a blog post I did about IRS statistics a while back, but if I was re-writing this post today, I would reference the studies that show people move into and out of the top ten or top five or top one percent pretty fluidly. See for example this post:

http://evergreensmallbusiness.com/financial-planning-for-top-one-percent/

By: Geoff

Geoff — Mon, 01 May 2017 19:54:31 +0000

“But simple math says that (by definition) only one in twenty people join the five percent club. Only one in a hundred join the one percent club.”
Nope. People accumulate wealth ad they get older. In the limit, everybody in the world would join the five percent club if they did so during the final five percent of their lifespan.

By: Steve

Steve — Mon, 19 Oct 2015 18:08:34 +0000

In reply to Rick O’Brien.

Yes, you probably are. But you won’t feel like if if you compare yourself to people in the top 1% of the top 1%…

Do remember that the average household income in US is just over $50K a year and that the average person retires with not much more than a few thousand dollars in retirement savings.

By: Rick O'Brien

Rick O'Brien — Tue, 13 Oct 2015 16:54:19 +0000

Hello;
Would you answer this for me please???? We have 750K in mutual funds and a rental property business worth 2M (debt 700K). Rental property brings in 150K a year and 50K a year comes in SSI and retirement annunity. Take 60K a year from the mutual funds when the market is up. Are we in the top 1%, sure do not feel like it????
Thank you very much,
Rick and Amanda

By: Steve

Steve — Tue, 20 May 2014 23:23:55 +0000

In reply to Craig.

Thanks Craig. I am wrong. You are correct. So just to restate, per Table 4 the median net worth of the top ten percent (measured by income) equals roughly $1.2M. However, the median net worth of the top ten percent (measured by wealth which is what we’re talking about) equals roughly $1.8M.

Final point: So this means I need to update my “savings” numbers… but the roughly 50% bump in the net worth value means that calculating the “bumped” savings required is pretty straightforward. Rather than save $10K a year, one would need to save $15K a year. (A fifty percent bump in savings.)

Thanks again Craig.

By: Craig

Craig — Fri, 16 May 2014 03:44:23 +0000

I think you read the wrong row in Table 4 in the Fed report. The $1.2M figure (median of top 10%) is percentile of *income*. Percentile of *net work* is in the second part of Table 4, a few pages lower. More like $1.8 M.