The Average American's Income Might Shock You

The average American earns about $67,080 per year, according to Federal Reserve data.

If you think that sounds higher than expected, you're not alone.

Most people compare themselves to friends, coworkers, or neighbors. But when economists calculate the average, a small number of very high earners can pull the number far above what most households actually make.

Why the average income looks so high

That $67,000 number is the mean income, which simply adds up all income and divides it by the number of people.

The problem is that the mean is heavily influenced by very high earners.

If nine people earn $50,000 and one person earns $1 million, the average income becomes $145,000. But almost nobody in that group actually earns that much.

The United States has a relatively small group of extremely high earners. Those incomes pull the average upward and make it look like the typical household makes more than it actually does.

That's why economists and financial planners almost always look at the median number instead.

The median tells a more realistic story

The median income is the point where half of people earn more and half earn less.

Because it sits in the middle of the distribution, it's much less affected by billionaires, CEOs, and other unusually high incomes.

For example, U.S. Census data puts median household income around the mid-$70,000 range, depending on the year. Median individual earnings are lower.

That's why the median reflects the financial reality of ordinary households much more closely than the average does.

Your bank account matters more than you think

If you want your money to grow faster, the easiest place to start is usually your savings account.

The national average saving rate is around 0.40%, and most of the biggest banks pay closer to 0.01%. Meanwhile, some of the best high-yield savings accounts are paying around 4.00% APY right now.

You can compare some of the top high-yield savings accounts available today to see how much more your emergency fund could earn.

Income alone doesn't tell you very much

Even median income can be misleading if you look at it in isolation.

Two households can earn the exact same salary but live completely different financial lives depending on factors like:

• Cost of living
• Debt payments
• Household size
• Savings habits
• Access to employer benefits

Someone earning $80,000 in a high-cost coastal city might feel stretched thin. Someone earning the same amount in a lower-cost area might feel comfortable and able to save aggressively.

The numbers that matter more

Instead of focusing only on income, financial health is often better measured through a few other metrics.

Savings rate

• How much of your income you keep matters far more than how much you earn. A household saving 20% of a $70,000 income is building wealth faster than someone saving 2% of a $120,000 income. And remember to earn around 10x the national average savings rate with one of the best high-yield savings accounts.

Net worth

• Your assets minus your debts gives a clearer snapshot of your financial progress than income alone.

Financial flexibility

• Emergency savings, manageable debt, and consistent investing tend to matter more than headline salary numbers.

In other words, income is a tool. What you do with it is what ultimately shapes your financial life.

The takeaway

The average American income can look surprisingly high because it's pulled upward by top earners.

That's why economists tend to focus on median income, which better reflects what the middle of the country actually earns.

Ultimately, the most meaningful financial metric isn't your income at all. It's whether your money is building long-term stability through savings, investing, and manageable spending.