Some 67.5 million American adults live in a household with annual income of at least $100,000 (“affluents”), a 5 million (or 8%) increase from last year, details Ipsos in its latest annual study of the affluent population. As such, 28% of the adult population can be classified as affluent, as can 23% of all US households. So who are these affluents?
According to the Ipsos study, the average age of an affluent adult is 46.1, not far off the general population average of 46.7. The wealthy (household income of at least $500,000), by comparison, skew older, with an average age of 50.5.
While Millennials (18-32) comprise 22% share of affluents, roughly two-thirds of affluent Millennials qualify on the basis of their parents’ income rather than their own. (The definition of affluence is based on living in a household with annual income of at least $100,000, rather than personal income of that level.) The most highly represented generation is Boomers (50-68), who represent 38% of the affluent population. (For details on advertising to this prized segment, see the MarketingCharts Debrief, “Advertising to Baby Boomers: The Why and How.”)
The affluent and wealthy also are far more likely than the general adult population to have postgraduate coursework (study or degree), with 31% of affluent adults and 43% of the wealthy having at least 5 years of college, versus 10% of the adult population at-large.
Somewhat unsurprisingly, these high-income adults also tend to be in managerial and professional positions: 63% of affluent adults and 66% of wealthy adults hold these roles, compared to 23% of adults in general.
When it comes to race/ethnicity, the data indicates that the affluent and wealthy adult populations are less diverse than the population at-large:
- 84% of affluents and 83% of wealthy adults are white, compared to 79% of general population adults;
- 6% of affluents and 5% of the wealthy are black/African American, versus 12% of the adult population; and
- 8% of affluents and the wealthy are of Hispanic descent, compared to 15% of the general adult population.
Not surprisingly given their career paths, minorities’ under-representation in the affluent population is mirrored to some degree by their below-average representation in the B2B buyer and decision-maker population, as detailed in MarketingCharts’ Debrief looking at these individuals. In fact, the Ipsos study notes that 40% of affluents are responsible for procuring products and services at work.
One race is over-represented in both the affluent and wealthy segments: Asian-Americans, who comprise 5% of the adult population but an outsized 8% of affluents and 10% of wealthy adults.
As one might expect, meanwhile, the West and Northeast regions of the US over-index in concentration of affluent and wealthy adults. (See here for the top 10 markets by concentration of wealthy Millennials.)
Turning to their spending patterns, the Ipsos research finds that total spending across 15 defined categories hit $2 trillion in this year’s study, up 5% year-over-year. Past-year affluent spending was greatest for the following categories:
- Automotive – including the purchase price of vehicles and motorcycles, as well as auto maintenance and supplies ($398 billion in aggregate spending; 20% of total spend);
- Personal insurance ($227B; 11% share);
- Home & garden ($208B; 10% share);
- Education expenses ($201B; 10% share); and
- Groceries ($193B; 9% share).
While total spend on automotive, education, alcoholic beverages and groceries grew the fastest, those aggregate increases were driven more by the increase in affluent population size than to average spending per affluent, which decreased across most categories.
About the Data: The 2014 Ipsos Affluent Survey process began by developing an address-based sampling frame that covered the vast majority of the Affluent population. Starting in February, 28-page surveys were mailed to a randomly-drawn sample from this sampling frame, along with a $10 incentive, followed by several reminders to minimize non-response. Before the July 11 fielding deadline, 12,747 eligible surveys were returned by adults whose annual household income (HHI) was at least $100,000 ”“ the definition of “Affluent” and the criterion for inclusion in the study. The results were weighted to demographic targets from the U.S. Census to further ensure representativeness of the sample.