Personal Finance 

What is the Average Middle Class?

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I’m a sucker for statistics, probably why I enjoy looking at numbers like the average retirement savings or the average tax refund, but I never gave the term “middle class” much thought until recently.

Fortunately for us, U.S. News & World Report has compiled some statistics on what the “average” is for a lot of money related statistics, like income, hours worked, etc.

Let’s take a look…

Average Income

For a two parent, four person household, the average income is between $51,000 to $123,000. The median is $81,000. That’s higher than I would’ve expected as the “typical” household has a sole breadwinner and one homemaker (it turns out 76% of two-parent families have both parents working). The case for this arrangement is pretty clear for anyone who has looked at the cost of daycare!

The range of this metric, $51k to $123k, really illustrates how meaningless it is without additional information. $123k in a low cost of living area is not the same as in a higher cost of living area. Unless it’s normalized for cost of living, it’s really difficult to find value in it.

That being said, would you consider someone earning $123,000 to be “middle class?” That’s $10,000 a month, pre-tax.

Other Average Statistics

Here are some other “middle class stats:”

  • Average home is worth $231,000 with $17,600 in payments a year. That comes out to $1466.67 a month in housing costs.
  • The average home is around 2,300 square feet.
  • On cars, the typical family spends $12,400 a year on two cars.
  • That median income family puts away around $2,600 per year for retirement.
  • $14,200 a year on clothes, food, utilities, entertainment, and other living expenses.
  • 18% of income goes towards some form of debt – auto loans, mortgage, credit cards, etc.

Finally, average net worth is around $84,000 according to the Federal Reserve (in 2007 the figure was $120,300).

What do you think of the statistics? Did any surprise you? Would you consider income of $123,000 to be middle class?

{ 78 comments, please add your thoughts now! }

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78 Responses to “What is the Average Middle Class?”

  1. Richard inTexas says:

    I am Texas resident and my wife and I are a one income family, we went to one income after we adopted our first child. Altough my income has changed quite drastically in the last five years I would have considered us to be in the upper middle class level of living. When our 1 income was +/- 100K we lived well in our 3200 Sqft home. Now that it is 400k we still live in the same home but with out a mortgage. I still consider my self middle class since nothing has changed other than we have paid off our debt. What makes your class standing change? The money you make or the money you have saved? The type of house you live in or the amount you owe on the house you live in? Is it net worth or fross debt? My friends and neighbors are still the same people thye were 10 years ago so why would I be any different than they are?

    • Dean says:

      I agree that a new definition of *middle class* is needed. My wife and I do not have children and we have a combined income of $152,000 per year and I own rental property which provides another $1850 a month. All of our vehicles are paid for and I have another 17 years of working life ahead of me. Total net worth in cash is $400,000. However, I feel completely average and consider myself middle class. I think the definition of middle class should be raised to $250,000 net income per year. I live in Denver. ==Dean

    • Matt says:

      The more accurate terminology is “Middle Income,” which you are not. Lower Middle Class is paycheck to paycheck while living comfortably. You are upper class, even if you don’t live that lifestyle.

      • jason says:

        agree, middle class means decent living from pay check to pay check with maybe up to 6 month of salary saved up, While upper/middle class would be someone who have paid off his/her house and with a substantial amount in saving. Upper class refers to those who have the financial freedom of not have to work and still living well til the day he or she dies.

  2. nick says:

    I just don’t get how a household who brings in 120K a year can have a net worth of only 80K. …but have a house worth $250000. It makes me think that people spend money on realy dumb things and let their debts get out of control.

    I’m 26, and I take home 30k a yr after taxes which is a quarter of this “average” 120K income….yet my net worth is double the average, my house and car are paid in full, I go on nice trips and have a very nice quality of life. I drive an 07 saturn sure its nothing fancy but I enjoy it, I live in a modest house in a lower middle class neighborhood, but I live alone I don’t need a huge 4 beedroom house. I know what I want and need and what I can aford, I don’t believe in debt especiialy not takeing on debt so I can “keep up with the jones” peaople need to learn to live with in their means and stop this buy now pay way later atitude…that’s what screwed our economy in the 20s and is gotten us in the mess we are in now!

    • mary says:

      Pleasesomespelling and grammar

    • Luis says:

      I dont think you are being honest or atleast you are withholding some information. You are 26 and even if you have been working since you were 16 and have always made 30k a year there is no way that the math adds up to you buying a home and paid off and a car and travel and living expenses and treveling. Liar

  3. Diva in Denver Area says:

    123K/yr is middle class, IMO. I’m also middle class: single, no kids, 137K salary, 2700 sq ft home, Net Worth $1.09M, with zero debts.

    $250K/yr is NOT middle class if net worth is proportionate (e.g over $2M). Those earning this much can and should pay pre-Reagan taxes (39.6%) for amounts over $250K. That extra 3 percent will not break them, if they are not living beyond their means and will help pay for needed services.

  4. william says:

    Just to think when I was raised up in a one story 1100 sq ft home with one car and TV was middle class and saving 15% of pay in savings.
    Maybe thats why there has been a lot of foreclosures in these times.
    I did listen to my dad I have a 1300 sq ft home, 2 used cars paid cash as well as one main TV and a 19 inch TV that I traded 4 fishing reel for. Life seems to be good and I save 15%v of my pay in retirements.

  5. Danial Davidson says:

    Kids are on their own and the wife and I gross 160k per year. House is paid for, cars are paid for, Have 60k in a credit union account for emergencies. We retire 12/24/11 and our combined pensions will provide us with a yearly income of 135k. The tax differed accounts will not be touched unless of emergencies. Prior planning helps.

    • scooter says:

      60K in savings ??????That could bed be one bad surgery my freind ???? So your real estate taxes utilities .travel & entertainment,fuel, ALL insurances costs ,aLL needed maintenance on your home ,cars, ,appliances and other annual maintanece expenses , doctor visits clothing, food, contributions,medicine ETC,ETC,. , Dan ,ithink you probably should stay @ work pal lol,

      • Fish says:

        Dan is doing better than most, I’d be happy with that. If he is old enough for medicare, he’ll be just fine.

        Dan is rich.

  6. Kevin Miller says:

    Another piece of the puzzle I’d like to know is how much middle class households contribute to charitable causes, whether through church/temple/mosque or otherwise, and how that has trended over the decades. My sense is that our parents and grandparents gave more generously than we do.

  7. matthewilliam says:

    Yes, I. Would like to thank every one who posted. Very interesting to see outhers views on the matters of finances and incomes. I need to start thinking more about mine! And it helps to see what real people have to say on the topics above.

  8. Guy says:

    Cost of living doesn’t matter. If I bought a house in Beverly Hills that I can barely pay the mortgage on and I make 500,000$ and someone makes 100,000$ and buys a bigger house a few miles away in a cheaper area does that make us both middle class? No, just makes me an idiot for spending money on an area that I can’t afford to live in. People can’t buy houses in expensive areas and then wonder why they don’t have money. You are paying a premium for living near a city that has things like plays, music, art, etc. A person in fly over country doesn’t have access to those things and so don’t have to spend as much for their living space. People buy houses above their means and then act like they are poor. You’re not. Just stupid. 🙂

  9. Tak Nomura says:

    My wife and I are both retired, and live on about $75k/year from social security and our retirement savings. I majored in Accounting, but worked in management positions for most of my working career. My wife was an RN, and worked about 45 years. We have no debts, and pay off our credit cards every month. I travel around the world about 5 or 6 times a year, and still have a few dollars left for “luxuries.” I drive a 2006 Acura TL, a good car that only requires oil change and petrol, but I only drive a bit over 5,000 miles/year. I’m now 76 years old, and plan to keep my car for the duration. Our retirement savings is way beyond what you show as “average,” but my wife and I saved 15 to 20% of our income when we both worked.

    In 2008 when most people lost 40% (average), my wife lost 11% and I lost 17%. Otherwise our retirement investments have remained pretty level even after taking out more than RMD’s every year.

    I guess we are “middle class” living in Silicon Valley. We did a total renovation of our home that cost $100k in 2008, because my wife do not want to move.

    Conservative investments in funds did the trick for us. I also had income property that I sold when I retired, because I didn’t want to manage anything in retirement.

    I sold 50% of my intermediate bond funds last June and purchased equities, because interest rates aren’t keeping up with inflation. I’ve been fortunate in the timing of our investments, because when it was above 14,000, I sold 37% and repurchased my funds when the DOW hit 8,500.

    Finally, we purchased our home for $50k back in the early 50’s, and it’s now worth over $1 million.

    Some of us have luck on our side.

  10. Sandra says:

    Tak, you certainly had good luck on your side. A lot of people have not! I went the safe route and invested a lot in real estate. Katrina caused a huge loss there. After rebounding somewhat from that disaster, the housing bubble burst. Luck wasn’t in my cards.

  11. robin in florida says:

    Guess that I am considered poverty almost as I make less than 21,00 a year. But my house is paid for , my truck is paid for and I do enjoy life even at my job. Good luck to those that feel that money makes who you are !!

  12. Craig says:

    First, yes $123K is middle class, so is $150. Middle class is more of a mindset. Most people spend most of what they make and invest very little and that is a middle class mindset. Note that the average middle class family only saves $2600/yr. The wealthy make money and invest it and on thier way up don’t care about stuff like cars. The decrease in the average net worth is due to the decrease in housing prices. My home is worth $100k less than it was 4 years ago.

  13. Sandi says:

    You are just like us except you have the resources to put you and your children in a much more comfortable position than the rest of us. The 110 mil adults (over 18) live on $50,000 a year or less.

    Jobs by Salary Ranges
    Six Figure Income jobs ($100,000+)
    High Income jobs ($80,000 – $100,000)
    Upper Middle Income jobs ($50,000
    Middle Income jobs ($30,000 – $50,000)
    Entry Level Income jobs ($10,000 – $30,000)

    When you are raising a family on much less.
    This is what a majority of real people and families make a year. We won’t even go into minimum wage.
    $8.00 hr (hopefully x2) $18,640
    $10.00 hr $20,000
    $12.00 hr $24,960 now your getting into the good money!

    Here it is the golden key $24.00 hr $50,000 a year!
    That is how the rest of us live just one rung below you. You know the ones that those above us think are sucking off the system and living off their dime. We try to maintain a life style similar to yours.
    On this income there is no paying off the mortgage (just keeping the house is a challenge sometimes) is not likely, pay off the car (maybe depending on how many dependents you have also), no boat, no motor home (unless you live in it). We are the majority down here in the trenches everyday keeping the engines of this country running making money that goes up the ladder NOT the other way around. Yet there are those who think we don’t think there should be programs to help us have a better live now and for our children???

  14. Doris says:

    I use to feel anyone making 25,000 to 50,000 middle class. I believe I am lower than middle as I have been making less & less each year. And taxes keep going up & up & up. I paid my house off after 32 years, now my Taxes & insurance are higher than my house payment was.

  15. Allan says:

    My wife and I always spent less than we made, starting our retirement planning in our early 30’s. We generally saved 12% or more of our gross pay each year. We bought new cars only about each eight years on the average, going for mid-size, less expensive makes. I did my own lawn and auto maintenance until we retired. We invested in equities early, building a balanced portfolio now having a value of about $1.85 million on combined peak pay of about $135,000 per year when we retired. We retired seven years ago and live on our pension and Social Security incomes of about $105,000 per year, that providing more than we spend by about $30,000 per year. In other words, we are still saving. We are not planning to downsize from our mortgage-free 4200 sq. ft. home as we like it here in north GA our golf course community with a polo field that is quite rural and close to the trailhead for the Appalachian Trail. I consider us to be upper middle class people.

  16. Fish says:

    I don’t have a dime saved and lived paycheck to paycheck. I am the real middle class.

  17. Fish says:

    I am middle class. I don’t have any money saved and live paycheck to paycheck. However; I never starve.

  18. LC says:

    The good thing about America is that no matter what class you are, if you set your mind to it, you can move forward. I started out of high school making less than 20k a year. No college, just hard work, learning the game (because it is one), networking and bugging everyone I knew about a job. I’ve been out of HS for 8 years now and I’m at 65k a year. If you’re not happy in your circumstance, do something about it.

    • Michele says:

      With downsizing and outsourcing to other countries, this is no longer available to many people. It’s hard for those of us who have been somewhat successful in life to realize that our country has changed, and not for the better.

  19. DR ROBBINS says:

    I worked for 35 years before becoming disabled at 53 yoa. I made over $100k/year for the last 20 years of my career. With 401k and investment, my net worth was over $1.2M in 2008. Now, 5 years later and on SSDI, my net worth is about $600K and I receive $28k in SSDI income each year. Having two young children from my prior marriage I rely on my new wife(has her own business) to help support us financially. The children share 50/50 custody with us and my ex. It has been a huge adjustment to go from $150k/yr to $28k/yr. A huge chunk of my net worth was spent with divorce lawyers in property/custody battles. At least the children have 529 accounts and I have lived a good life. After all, it’s really about their welfare now. As you can imagine, I can’t get life insurance. Their Mother just might have to get a job, unless by some miracle of science, I am brought back to full health and reenter the workplace.

  20. Fish2 says:

    Hey fish, I started with a job making 15k a year. Quite after 3 years, and retired. No old money. I simply saved 50% of my income and lived cheap. Now I’m above the average and still retired. I still save 50% of all my investment returns. I was 26 when I retired. I’m 38 now. Stop spending what you do make. Live cheaper. Life will be better.

  21. Anonymous says:

    yes123000is upper

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