Rich, Rich-ish, and the $650,000 Between Them

“The 1%” sounds like an abstraction. It's something economists argue about on cable news.

But if you're a physician, you might already be in it without knowing. You might be surprisingly close. Or, depending on your zip code, you might be miles away despite a paycheck that would make most Americans' eyes water.

The entry level of the 1% club isn't fixed like many of us think. It actually differs based on where you live.

According to SmartAsset's 2025 analysis of IRS tax return data, the national average income required to crack the top 1% is $731,492. But that number tells you almost nothing useful.

In Connecticut, you need $1,073,564. In West Virginia, $422,835 is all you need to get in.

That's a $650,729 spread between the most exclusive 1% in the country and the least.

So this is a case in which geography, dear friends, changes everything.

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It's Not What You Make, It's Where You Make It

The Medscape 2025 Physician Compensation Report found that average physician compensation across all specialties reached $374,000 in 2024, up from $363,000 the prior year. Primary care physicians averaged $287,000, while specialists averaged $404,000.

Seven specialties cleared the $500,000 mark, namely orthopedics, plastic surgery, radiology, cardiology, gastroenterology, urology, and anesthesiology.

While those averages are a useful floor, Marit's real-time data (drawn from over 21,000 anonymously verified physician and APP submissions) consistently runs higher than Medscape's figures, particularly in procedural specialties.

According to Marit, physician pay rises from roughly $397,000 in the first two years out of training to $544,000 at the 16–20 year mark before leveling off. The spread within a single specialty can be staggering.

According to Marit's intra-specialty variance analysis, physicians in the top 10% of a given specialty often earn 1.5 to 3.5 times more than those in the bottom 10% of that same specialty — meaning your specialty alone doesn't tell the whole story.

Where you practice, what model you work under, and whether you have equity in your practice can matter just as much. That's a wide range, but it tells you if you're in the 1%…or just waiting in the lobby.

Here are some numbers by specialty and state:

• A family medicine physician making $294,000 in Mississippi is nowhere near the $446,367 threshold.
• An orthopedic surgeon making $693,000 in Pennsylvania clears the state's $665,913 bar comfortably.
• A neurosurgeon earning $900,000 in California is still $19,587 short of the Golden State's $919,587 cutoff.
• That same neurosurgeon in West Virginia? In the 1% by a country mile.

The Doximity 2025 Physician Compensation Report found that overall physician compensation rose 3.7% in 2024. Not bad on paper. But Doximity also noted that, when adjusted for inflation, Medicare physician payment has dropped 33% since 2001.

Real purchasing power for many physicians has barely moved in a generation.

Physician Compensation: Modest Gains and Deeper Financial Pressures

States Where the 1% Velvet Rope Is at Knee Height

If you're a high-earning specialist, say, an anesthesiologist or a gastroenterologist, and you practice in a lower-cost state, the calculus is straightforward.

Here are the bottom ten states by 1% income threshold, sourced from BestBrokers' data:

A general internist earning $280,000 won't make the cut here. But a hospitalist earning $425,000 in West Virginia? You're in. And if you're an orthopedic surgeon earning $564,000? Welcome to the club.

Also read: Are You Really Wealthy? A Data‑Driven Look at How High Earners Undervalue Their Net Worth

States Where It's Three-Quarters of A Million or Bust

On the other end of the map, some thresholds climb toward seven figures. The top ten, along with D.C., are:

A physician earning $750,000 in Connecticut is not in the 1%. In most other states, they would be. Context matters.

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All That Glitters is Pre-Tax

Making the income threshold is one thing. What you keep is another.

“It's not how much you make, it's how much you keep,” says Daniel Milan, managing director and investment adviser at Cornerstone Financial Services.

Physicians in California making $919,587 are paying a marginal state income tax rate of 10.3% to 12.3%, depending on filing status, among the highest in the country at that income level. (For anything above $1 million, a 13.3% rate kicks in, via a Mental Health Services surcharge. After crossing that threshold, a separate SDI payroll tax expansion pushes the effective rate to 14.63% on wages over $1 million.)

Californians are also contending with a median home price of $820,500, per Redfin's February 2026 data. A physician in Texas making $755,616 pays no state income tax and looks at a median home price of $314,100.

The purchasing power gap between those two physicians is more of a chasm. The California physician earns more on paper. The Texas physician is wealthier in practice.

Average net worth data from Empower bears this out. Connecticut leads all states at an average net worth of $919,784 per person, and California clocks in at $854,715. Both are high because high earners have accumulated assets. But it took them more gross income to get there.

Learn more: Tax Savings for Physicians, 2025 Edition

The 1% Of The 1%

Income gets you into the club. Net worth tells you if you belong.

According to DQYDJ's analysis of Federal Reserve data, the top 1% of household net worth in the U.S. starts at $13,666,778. That's a very different number from the income thresholds above.

In Q2 2025, the top 1% of households held 31% of all net worth in the country, while the bottom 50% held just 2.5%.

For physicians, this can be…enlightening, to say the least. A surgeon making $600,000 in a high-cost state, carrying $350,000 in student loan debt and a $2 million mortgage, may be an income top-1%er in many states but nowhere near a net worth top-1%er. A physician making $350,000 in rural Ohio who paid off their home and maxed retirement accounts for 20 years might surprise you on net worth.

The income threshold is just the entrance exam. Building toward that $13.7 million net worth figure is the actual feat.

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How to Use Your House as a Cheat Code

David Schneider, CFP and president of Schneider Wealth Strategies, says that “Expensive real estate isn't really a cost. It's ultimately a retirement fund. It's a form of forced savings.”

Sell a median-priced home in California for $818,000. Buy a median-price home in New Mexico for $373,200. After real estate commissions and moving costs, you're walking away with roughly $400,000 in liquid capital to pad your retirement accounts. That's before you factor in the state income tax you're no longer paying.

“Geography is a meaningful lever to pull when it's used wisely,” Schneider adds. “It can turn a comfortable retirement into a wow retirement.”

For physicians who spent their peak earning years in a high-cost state, this can be a force multiplier on decades of savings.

A physician retiring from a New York practice and relocating to Tennessee (where the 1% threshold is $648,304 and the median home price is $412,000) doesn't just lower their expenses. They free up capital, reduce tax drag, and extend the life of their portfolio.

“Over a 10 to 20-year retirement, it makes a significant difference from a stress test or risk standpoint in regards to cash flow and retirement fund account balance,” says Milan.

Learn more: The Reality of Changing U.S. Real Estate Prices

Feeling Broke at $400K

The Bankrate 2025 Retirement Savings Survey found that 58% of American workers say their retirement balances are behind where they should be. Physicians aren't immune to this despite their incomes.

A $400,000 income in San Francisco, after taxes, housing, private school, malpractice insurance, and student loan payments, can leave very little margin for savings.

Meanwhile, the top 1% collectively hold about 22.4% of all adjusted gross income in the United States and pay roughly 40.4% of all federal income taxes, per IRS Statistics of Income data.

Being in this bracket is taxing (pun intended).

Physicians who assume that a high salary automatically translates to financial security often find out the hard way that it doesn't. High income without disciplined savings and smart asset allocation is just a bigger budget with a larger surface area for leakage.

Do This

• Look up your state's 1% threshold against your actual income. BestBrokers' data gives you the most current IRS-adjusted figures. Knowing where you stand changes how you plan.
• Run the net worth number, not just the income number. The $13.7 million household net worth threshold for the top 1% is the target. An insane one, yes, but you know what they say about aiming for the stars.
• If you're within a decade of retirement and live in a high-cost state, model a relocation. The real estate arbitrage between California or New York and a state like Tennessee or North Carolina is not trivial. Run the actual numbers with a fee-only CFP.
• Factor state income tax into your specialty-and-location decision. A $600,000 offer in California and a $520,000 offer in Texas are not as far apart as they look once state taxes are applied.
• Stop conflating a high income with wealth. They're related but not synonymous. The physician maximizing their Solo 401(k), backdoor Roth, and taxable brokerage on $380,000 in Ohio is building more durable wealth than the one spending to the edges of $600,000 in Los Angeles.

The 1% is a moving target — and the zip code you pick does more to define what it means in practice than the income figure itself. A physician who understands making good money and gets to keep more of it.

None of this is to say that money is everything, or that chasing the 1% threshold should be anyone's north star. The world could end tomorrow. War, a pandemic, a diagnosis, a bad year in the market.

Life has a way of blindsiding us when we least expect it.

If living in California makes you happy, that's wealth in every sense of the word. If the culture, the weather, the proximity to family, or the sheer fact of waking up somewhere you love is worth the tax bill and the real estate prices, then so be it.

Spending money, saving it, moving for it, or staying put despite it are all variables that bend to your own goals, values, and version of a life well-lived.

Just…be prepared. Have a plan for a rainy day. And whatever state you land in, cheap, expensive, or somewhere in the middle, make sure retirement is on the list of things you're building toward. That part isn't optional.

Also read: Is There More to Life Than This?

Frequently Asked Questions

What income do you need to be in the top 1% in the United States?

The national average income required to join the top 1% of earners in the U.S. is $731,492, based on IRS tax return data adjusted to 2025 dollars. That figure shifts dramatically by state, ranging from $422,835 in West Virginia to $1,073,564 in Connecticut.

Which state has the lowest income threshold to join the top 1%?

West Virginia has the lowest bar, requiring an annual income of $422,835 to crack the top 1%. Mississippi ($446,367) and New Mexico ($458,718) follow close behind. For high-earning specialists practicing in these states, the math is often straightforward.

Which state requires the highest income to join the top 1%?

Connecticut tops the list with a $1,056,996 income floor, the only state where it takes more than $1 million to enter the top 1% of earners. Washington D.C., though not a state, has an even higher threshold of $1,090,935.

Are most physicians in the top 1% of earners?

It depends on specialty, years of experience, and where they practice. According to the Medscape 2025 Physician Compensation Report, average physician compensation across all specialties reached $374,000 in 2024 — well below the 1% threshold in most states. However, seven specialties averaged above $500,000, and procedural specialists in lower-cost states can clear the bar comfortably. A neurosurgeon earning $900,000 in West Virginia, for instance, is in the 1% by a wide margin. That same physician in California falls $19,587 short.

What is the difference between the top 1% income and top 1% net worth?

They are very different numbers. The income threshold to join the top 1% averages $731,492 nationally. The net worth threshold, according to DQYDJ's analysis of Federal Reserve data, starts at $13,666,778. A high income gets you in the door. Building toward that net worth figure is the actual work.

Does living in a high-cost state make it harder to build wealth even on a top 1% income?

Yes, significantly. A physician earning $919,587 in California pays a marginal state income tax rate of 10.3% to 12.3%, depending on filing status, and faces a median home price of $820,500. A physician earning $755,616 in Texas pays zero state income tax and looks at a median home price of $314,100. The California physician earns more on paper. The Texas physician often ends up wealthier in practice.

What is geographic arbitrage, and how does it apply to physician retirement planning?

Geographic arbitrage is the strategy of selling a high-value asset in an expensive market and redeploying that capital in a lower-cost one. For physicians, the most common version is selling a home in a high-cost state like California or New York and buying in a lower-cost state like Tennessee or New Mexico. Selling a median-price California home at $818,000 and buying a median-price New Mexico home at $373,200 can free up roughly $400,000 in liquid capital before accounting for the ongoing savings from lower taxes and cost of living.