One often hears complaints that Social Security is not enough to live comfortably in retirement. To be fair. SS was not conceived as a replacement for a retirement plan. It is a device to keep people from abject poverty and nothing more. People need to accept some responsibility for their own well-being.

Consider a couple who have worked 50 & 30 years at the US minimum wage. Their SSI income will be about $16,330 while both live. The survivor's allotment will drop to $10,380. Persons working longer or at higher wages will get more. Regardless of the details, living on SSI is not much of a plan for one's old age.

A Penny Saved...

Now assume the couple has put ten percent of earnings into savings each month while working. At retirement, their savings will amount to $408,776.

A consistent 5% return in a well managed portfolio will potentially add just over $20,000 to their income for a total of $36,330 while both are living and $30,380 for a survivor alone. That is without touching the principal, which remains as an emergency fund and/or a legacy.

They need an income throughout the total years of life in retirement, which is 30 years. Let's assume a safe retirement budget is $4,000 per month (not in NYC or SFO, of course, let's not quibble), giving 60% for rent & food and 40% for everything else and that Medicare covers most health related costs.

For a combined lifetime of 30 years, they can withdraw only about $3,500 per month or $42,000 per year, which puts them in a low income category but does not descend to destitution. In most counties, the couple will qualify for Section Eight or other subsidized housing. This will still be insufficient in certain large urban areas.

The real crime here is not Social Security, whether niggardly or generous, but the lack of financial education of most citizens coupled with low wages for the working class. If the minimum wage were, say $30 per hour, the whole argument would just go away.

What If We Changed the System?

We asked a major AI platform to do the homework regarding redirecting the share of US income going to the top 1% if minimum wage rises to $20/hour or $30/hour, with all other wages going up at the same rate.

Current Top 1% Income Share

- As of 2022, the top 1% of households in the US captured about 22.4% of all adjusted gross income; this figure tracks the share of pretax national income flowing to the top 1%.
- Entry to the top 1% required annual household income of roughly $731,000.

Impact of Raising the Minimum Wage to $20/Hour

- A federal minimum wage set at $20/hour would raise annual full-time wage earnings to about **$41,600** before taxes[4].
- If all low and middle wages in the economy were adjusted up by the same relative factor as this minimum wage hike (from $7.25 to $20/hr is roughly a 2.76x increase), the collective share of income received by the bottom 90% would surge significantly while the share going to the top 1% would shrink.

Estimated Top 1% Share After a $20 Minimum Wage

- Assuming top incomes remain constant while all other earnings (for the remaining 99%) rise proportionally, the **top 1% share of total income would drop to about 8.4%.
- This is based on recalculating the income distribution so that the $20/hour wage lifts all earnings outside the top 1% by 2.76x, while the income of the top 1% does not change (i.e., a simplified, static model; in reality, some high earners' incomes might also rise, so this is an estimate).
- Compared to the scenario with a $30/hr minimum wage (where the top 1% share fell to ~5.7%), a $20/hr minimum wage would still sharply diminish income concentration, but less dramatically.

Key Points

- Income concentration at the top would fall substantially if the minimum wage rose to $20/hr and all other wages moved up comparably.
- The bottom 90% of earners would receive a much larger share of total income.
- Actual results would depend on broader economic reactions, including potential changes in upper-level earnings, capital gains, or shifts in employment, but the trend toward reduced inequality would be robust under this scenario.

This scenario highlights how broad-based wage increases focused on the lower and middle segments of the workforce could significantly alter US income distribution, lowering the share flowing to the wealthiest Americans.

Note that this effect would not change the situation of households that are already wealth, which would retain their social and economic power and perhaps even see it increase, but that's a question for another day.

Who's in the Top One Percent?

Required income to Join the top 1% in the $20 minimum wage scenario changes with the other income ranges.

National Threshold (2025 Baseline)

- As of 2025, the average annual income needed to be in the top 1% of wage earners in the United States is approximately $731,000 to $794,000.
- This figure reflects recent IRS and financial industry analysis of U.S. income data.

Impact of a $20 Minimum Wage and Proportionate Wage Increase

- In this scenario, the U.S. minimum wage rises from $7.25 to $20/hour (a 2.76x increase), and all wages outside the current top 1% are assumed to rise at the same multiple.
- If the top 1% incomes do not increase, but everyone else’s do, the cutoff for entering the top 1% would remain at roughly $731,000–$794,000—but this would now represent a far smaller multiple of the new full-time minimum wage:
- Old ratio (using $7.25/hr): $794,000 / $15,080 ≈ 53 times minimum wage.
- New ratio (using $20/hr): $794,000 / $41,600 ≈ 19 times minimum wage.

Scenario Adjustment

- If high-end incomes also adjust upward in line with the 2.76x multiple, the new threshold to be in the top 1% would also increase by 2.76x:
- Adjusted 1% cutoff: $794,000 × 2.76 ≈ $2,190,000 annual income.

Key Takeaways

- For this scenario (if the top 1% threshold increases along with all other earnings), an individual would need an annual wage income of about $2.2 million to be in the top 1% of earners in the United States in 2025.
- If the top 1% threshold stays fixed while all other wages rise, $731,000–$794,000 would remain the cutoff, but far more people would approach or exceed this level, dramatically widening access to top percentiles and reducing inequality.

*All figures reflect the most recent available wage and IRS data for 2025 recalculated for the scenario described.