In 2018, researchers tracked the financial outcomes of the top 20% of Americans to understand wealth concentration at the upper level of the income distribution.
The data highlight how median and average net worth diverge when looking at the wealthier segments of the population rather than the full adult or household population.
| Measure | Top 20% of Americans (2018) | Median Household (2018) | Source |
|---|---|---|---|
| Average Net Worth | $2.1 million | $121,700 | Federal Reserve Survey of Consumer Finances |
| Median Net Worth | $660,000 | $121,700 | Federal Reserve Survey of Consumer Finances |
| Mean Income (household) | $278,000 | $61,900 | U.S. Census Bureau, Current Population Survey |
| Share of Total Net Worth | ≈85% | N/A | Estimated allocation based on distributional data |
Defining the Top 20 Percent in 2018
Economists define the top 20% by household income and net worth thresholds that place a family above roughly $130,000 in pre-tax earnings, though exact cutoffs vary by survey.
Households in this group include dual-income professional families, business owners, and investors whose portfolios and assets pushed average net worth in 2018 well above levels seen in the middle of the distribution.
Net Worth Composition and Asset Allocation
Primary Components
Business equity, retirement balances, and primary residences combined represented the bulk of net worth, while liquid savings and other financial accounts contributed smaller shares.
Business Ownership Impact
Self-employment and private business stakes created outsized gains in the top 20%, especially in markets like technology and professional services where valuations reflected long-term growth expectations.
Regional and Demographic Patterns
High-cost metropolitan areas such as San Francisco and New York, combined with older household headship, frequently drove the mean net worth higher even when median figures in those regions were more conservative.
Age plays a decisive role, with households near retirement holding more home equity and financial assets, which contrasted with younger top-income households that relied more on career growth and startup equity.
Key Takeaways
- Average net worth of the top 20% in 2018 was approximately $2.1 million, driven by business and investment assets.
- Median net worth within this group remained substantially higher than overall household medians, showing internal stratification.
- Asset allocation heavily weighted toward equities and small business stakes amplified wealth concentration.
- Regional markets and career stage created significant variation in outcomes across households in the top 20%.
FAQ
Reader questions
Why does the average net worth for the top 20% differ so much from the median?
Outlier wealth in business equity and investment portfolios pulls the average upward, while the median reflects the mid-point and is less influenced by extreme values.
How does 2018 data compare with earlier years for this group?
Post-recovery asset appreciation and tax changes between 2013 and 2018 expanded both mean and median net worth in the top 20%, with mean growth slightly stronger.
Does geographic location significantly alter these figures?
Coastal metros with high housing costs and tech hubs increased both average and median net worth for the top 20%, but also widened the gap between average and median.
What role does retirement account ownership play?
Households with higher 401(k) and IRA balances saw larger average net worth gains, especially when combined with employer matches and long-term market returns during the 2010s.