It takes more than high income to truly be in the top 1%

Safe in shape of dollar sign

To know if you're a 1-percenter, use wealth — not income — as the measuring stick.

Why?

The wealthiest might earn a lot, but they save even more.

In terms of your paycheck, it probably doesn't take as much as you think to be in the 1% club. Cracking the top 1% in wealth is another matter entirely.

According to recently released data from the Internal Revenue Service, it took just $369,691 in adjusted gross income (AGI) in 2010 to make it into the elite group. (That's income minus deductions.)

Even at the bottom rung of the 1%, you'd be among approximately 1.35 million or so households that earned about 19% of the nation's income and paid just over 37% of its income tax.

Here's a comparison of the 1% vs. the other 99% in terms of income group and the percent of the nation's income that each group earned.

Comparison of Income

Income bracket Minimum AGI % of income earned
Top 1% $369,691 18.87%
Top 5% $161,579 33.78%
Top 10% $116,623 45.17%
Top 25% $69,126 67.55%
Top 50% $34,338 88.26%

While $370,000 is a good amount of money to bring in on an annual basis, net worth — all of your assets minus your debt — is really what it's all about.

Your paycheck can rise and fall, but landing in the top 1% of wealth is much tougher because it's all about accumulating assets over time.

The wealthiest American households had an average net worth of $16.4 million in 2010, or 288 times the median household net worth of $57,000, according to the Economic Policy Institute.

Building your net worth comes down to saving more — plain and simple.

As an example, let's say you're 30, plan to retire at 65 and currently have $0 in your company 401(k) plan.

In one scenario, you make $200,000 per year but only manage to save $10,000 annually to tuck away in your 401(k).

When you retire, you'll have around $2,695,441 in your plan, according to our 401(k) calculator.

That's assuming an 8% annual rate of return and a 50% employer match with a maximum contribution of 6%.

In another scenario, you make $100,000 but manage to save $15,000 per year, which gives you approximately $3,234,529 in your plan when you retire, or about $500,000 more.

That's a pretty strong case for saving.

Most of us are a long way off from the 1% club.

But if we spend less of our hard-earned money on assets that decline in value, more of it on assets that increase and save all that we can, we'll get closer.