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What is the Average Middle Class?

Posted By Jim On 05/04/2010 @ 12:06 pm In Personal Finance | 78 Comments

I’m a sucker for statistics, probably why I enjoy looking at numbers like the average retirement savings [3] or the average tax refund [4], but I never gave the term “middle class” much thought until recently.

Fortunately for us, U.S. News & World Report has compiled some statistics [5] 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 [6] 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?


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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/what-is-the-average-middle-class.html

[3] average retirement savings: http://www.bargaineering.com/articles/average-retirement-savings-by-age.html

[4] average tax refund: http://www.bargaineering.com/articles/average-tax-refund.html

[5] compiled some statistics: http://finance.yahoo.com/banking-budgetingk/article/109155/how-to-gauge-your-middle-class-status

[6] average net worth: http://www.bargaineering.com/articles/average-net-worth-of-an-american-family.html

Thank you for reading!