Latest U.S. Census Bureau Data Highlights Growing Divide Between Top 5% & 10%

So, why does it seem so hard to help ordinary high-income clients buy suitable life insurance and plan for retirement?

Possibly because they’ve been under intense financial pressure since around 2005.

The Census Bureau tells the story in its latest U.S. income report, specifically, tables A-4a and A-4b. The tables show how much income, in inflation-adjusted 2022 dollars, households would have had to report to qualify for a range of different income categories.

Households at the median, or 50th percentile level, held steady from 2000 to 2022.

Cutoffs for households at the top 20% level and at the top 5% level held steady until 2012, when they began increasing before falling a bit last year, as the Federal Reserve Board tried to cool inflation by pulling excess cash out of the economy.

The income cutoff for households in the top 10%, or at the 90th percentile, fell hard in 2004, fell more in 2010 and has never recovered. It has increased in dollar terms, in some years, but it has never even started to close the gap between the 90th percentile cutoff and the 95% percentile cutoff.

In 2022, the income cutoff for the top 10% was just 61% of the income cutoff for people in the top 5%, down from 92.6% of the top 5% cutoff in 2000.

Possible causes could include programs and tax rules designed to help lower-income people, and the possibility that efforts by the Fed to stabilize the stock market have been more helpful to households in the top 5% income category than to households in the top 10%.

For a look at three graphs that illustrate what happened, see the gallery.

For more detailed, year-by-year numbers, see the table below.

..	..Income Category Cutoff				Cutoff as a Percentage of the 95th Cutoff, for the…..
..Year..	.. 50th Percentile..	.. 80th Percentile..	.. 90th Percentile..	.. 95th Percentile..	..50th Percentile..	..80th Percentile..	..90th Percentile..
..2000..	..$67,470..	..$131,400..	..$216,000..	..$233,300..	..28.9%..	..56.3%..	..92.6%..
..2001..	..$66,360..	..$131,200..	..$$228,600..	..$236,500..	..28.1%..	..55.5%..	..96.7%..
..2002..	..$65,820..	..$130,400..	..$$227,700..	..$232,800..	..28.3%..	..56.0%..	..97.8%..
..2003..	..$65,860..	..$132,100..	..$229,100..	..$234,300..	..28.1%..	..56.4%..	..97.8%..
..2004..	..$65,760..	..$130,500..	..$213,000..	..$233,100..	..28.2%..	..56.0%..	..91.4%..
..2005..	..$66,780..	..$132,200..	..$214,300..	..$239,300..	..27.9%..	..55.2%..	..89.6%..
..2006..	..$67,520..	..$135,900..	..$211,200..	..$243,800..	..27.7%..	..55.7%..	..86.6%..
..2007..	..$68,610..	..$136,600..	..$204,600..	..$241,800..	..28.4%..	..56.5%..	..84.6%..
..2008..	..$66,280..	..$132,100..	..$196,300..	..$237,200..	..27.9%..	..55.7%..	..82.8%..
..2009..	..$65,850..	..$132,300..	..$190,500..	..$238,100..	..27.7%..	..55.6%..	..80.0%..
..2010..	..$64,300..	..$130,500..	..$190,700..	..$235,500..	..27.3%..	..55.4%..	..81.0%..
..2011..	..$63,350..	..$128,600..	..$184,000..	..$235,400..	..26.9%..	..54.6%..	..78.2%..
..2012..	..$63,350..	..$129,300..	..$181,300..	..$237,400..	..26.7%..	..54.5%..	..76.4%..
..2013..	..$65,740..	..$135,200..	..$181,800..	..$251,700..	..26.1%..	..53.7%..	..72.2%..
..2013..	..$63,720..	..$129,900..	..$181,100..	..$240,500..	..26.5%..	..54.0%..	..75.3%..
..2014..	..$64,900..	..$135,800..	..$182,100..	..$249,900..	..26.0%..	..54.3%..	..72.9%..
..2015..	..$68,410..	..$141,600..	..$182,200..	..$259,600..	..26.4%..	..54.5%..	..70.2%..
..2016..	..$70,840..	..$145,200..	..$185,800..	..$270,300..	..26.2%..	..53.7%..	..68.7%..
..2017..	..$72,090..	..$149,300..	..$186,300..	..$287,800..	..25.0%..	..51.9%..	..64.7%..
..2017..	..$72,370..	..$149,600..	..$181,800..	..$279,500..	..25.9%..	..53.5%..	..65.0%..
..2018..	..$73,030..	..$150,300..	..$179,300..	..$287,500..	..25.4%..	..52.3%..	..62.4%..
..2019..	..$78,250..	..$162,300..	..$179,700..	..$307,500..	..25.4%..	..52.8%..	..58.4%..
..2020..	..$76,660..	..$160,100..	..$177,100..	..$310,000..	..24.7%..	..51.6%..	..57.1%..
..2021..	..$76,330..	..$160,800..	..$178,600..	..$308,700..	..24.7%..	..52.1%..	..57.9%..
..2022..	..$74,580..	..$153,000..	..$180,000..	..$295,000..	..25.3%..	..51.9%..	..61.0%..