64% of Americans Have Discretionary Income

November 12, 2007

This article is included in these additional categories:

Financial Services

About 73 million US households now have discretionary income, up from about 57 million in 2002, according to a report by The Conference Board. The proportion of the US population with discretionary income has increased to nearly 64%, up from 52% in 2002.

Households with discretionary income, as defined by the study, are those whose spendable income exceeds that held by households with similar demographic features.

Total discretionary income in the US topped $1.7 trillion in 2006, with the household average at $24,335. Per capita income stood at $9,148.


“While the percentage of households with discretionary income has risen over the past several years, purchasing power remains concentrated in the wallets of the affluent,” said Lynn Franco, director of The Conference Board Consumer Research Center.

Nearly 78% of all discretionary income is held by households earning more than $100,000. Average discretionary income for this segment, $66,451, is 2.7 times the national average.

Below, some highlights of The Conference Board report:

Top regions


  • The region with the wealthiest concentration of households is New England (including Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont). About 63% of households have discretionary income, with an average amount of $27,337.
  • Household discretionary income is lowest in the West North Central region (including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota). Average household discretionary income in the region is $20,749.

Top states

  • California, the most populous state, is also the state with the largest number of households with discretionary income: 8 million. These households hold $224.7 billion in total discretionary income.
  • Texas has the second-highest number of households with discretionary income – more than 5 million, with $136.8 billion in total discretionary income.
  • Other top states are Florida, with almost 4.7 million households holding $126.1 billion, and New York, with about 4.6 million households holding $119.4 billion in discretionary income.

Other findings:

  • The top end of the affluent group (households with earnings of at least $200,000) accounts for only 3% of total households and 5% of households with discretionary income. This group, however, has 38% of total discretionary income with an average of $173,613 – more than seven times the national average.
  • Households with earnings of less than $50,000 account for nearly 60% of all households and 29% of households with discretionary income.
    • However, they account for only 3% of aggregate discretionary income.
    • Average discretionary income among this market is about $1,900.
  • In terms of generations:
    • Baby Boomers (born between 1946 and 1964) are the largest group, with 43.7 million households.
    • More than two-thirds of Boomers have discretionary income; they have the highest average discretionary income, at $29,754.
    • Generation X (born between 1965 and 1981) is the second-largest group, with 34 million households.
    • Slightly less than two-thirds of Gen X-ers have discretionary income; they have the second-highest average discretionary income, at $22,562.
  • Householders in management, business and financial occupations tend to have the most discretionary income. Almost 87% of households in this group have discretionary income; the average amount is $41,922.
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