What Income Actually Puts You in America's Top Half?

Question

The U.S. Census Bureau just dropped 2023 household income data, and here’s the bottom line: you need $80,610 to be average—literally.

That median number is up 4% from 2022’s $77,540. But here’s where it gets interesting: income varies wildly by age.

The Age Factor Matters Way More Than You Think

People aged 45-54 are crushing it with a median household income of $110,700—the peak earning years. Meanwhile:

Ages 25-34: $85,780 (starter phase)
Ages 35-44: $101,300 (climbing)
Ages 55-64: $90,640 (starting to cool)
Ages 65+: $54,710 (retirement drawdown)

So when you benchmark yourself, compare against your age group, not the overall average.

Income Distribution: Where Do You Actually Stand?

Want to know the thresholds?

Top 10% (90th percentile): $234,900+
Top 30% (70th percentile): $127,300+
Top 50% (median): $80,610+
Bottom 50%: below $80,610

If you’re making $127K, you’re already in the 70th percentile. Pretty solid.

The Boring Trick to Building $1M: Just Stick With It

Here’s a reality check: the average person can build a $1 million portfolio on a median income. Here’s how.

Use the 50-30-20 budget framework:

50% for essentials (rent, groceries, utilities)
30% for fun stuff (travel, dining out)
20% for savings

For someone under 65 making $77,790 after tax, that 20% equals roughly $15,550/year or $1,295/month.

Now dump half that amount ($650/month) into an S&P 500 index fund like VOO. Here’s the math at a 10.6% annual return (the S&P’s historical average):

After 10 years: $127,900
After 20 years: $478,300
After 30 years: $1.4 million

The kicker? The S&P 500 has never delivered a negative return over any 20-year period in history. So if you’re patient enough to hold for two decades, you’re basically guaranteed to win.

The Bottom Line

Median income is plenty to build generational wealth—but only if you’re boring enough to invest consistently and let compound interest do the heavy lifting. No day trading required.