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July 30, 2024 • 7 minutes
The term “middle class” is often used in conversations about economics, politics, and social status, but its definition can vary widely depending on context. Generally, the middle class represents a segment of society that falls between the working class and the upper class.
While most people think of middle class as an economic reality, there are many below and above the middle class income levels who identify as being in this group.
Let’s explore 9 ways that define what being middle class means.
From an economic standpoint, middle class is often defined by income. According to Pew Research, a household earning between two-thirds and double the median household income in a given area is considered middle class. This range adjusts based on local cost of living, making the middle class in a major city different from that in a rural area.
That formula resulted in the typical middle class family earning a little more than $106,000 in 2022, compared to about $257,000 for an upper income family and $35,000 for those making a lower income.
According to Pew, in 2023 roughly half (51%) of Americans were middle income, while 30% were lower income and 19% were upper.
In 1971, 61% of Americans lived in middle-class households.
The financial reality of being middle (or any) class really does go beyond income. From the perspective of good personal finance habits, one might be considered middle class if you are able to balance your personal budgets each month while also saving for your future. Financial wellness is determined by a whole host of factors related to how well you are doing today and how prepared you are for retirement (debt, savings levels, risk management, home ownership and so much more) .
NEW: Have you checked your Financial Wellness Assessment in the Boldin Retirement Planner?
This group might be defined as being lucky enough to have a measure of stability in their lives. Whether it is having family dinner every night, access to healthcare, a working car, or a stable job, stability and consistency can reduce stress in your life.
The realities of your finances aside, you might identify as a member of this group if you embody certain values such as hard work, responsibility, and self-sufficiency. People with a middle class mindset also tend to engage in cultural activities and hobbies that reflect a balanced work-life dynamic. Education and family are valued.
Growing up, the reality of my parents’ divorce probably meant that we were among the working poor. However, I thought I was middle class. It didn’t matter that we didn’t actually have a middle class income, I felt a sense of belonging among better off peers.
Conversely, I now live in a town full of million dollar homes with peers earning hundreds of thousands every year. The community is objectively upper class, but identifies as middle.
Education plays a crucial role in defining the this group. Many individuals in this segment have completed some level of higher education, which typically correlates with better-paying jobs, but college costs can also strangle households with student loan debt, tanking the economic prospects of the household.
Pew reports that among Americans ages 25 and older in 2022, 52% of those with a bachelor’s degree or higher level of education lived in middle-class households and another 35% lived in upper-income households.
Is college still worth the cost of tuition?
So, what makes a middle class profession? The answer is more complicated than you might initially imagine.
A middle class profession might be defined by income. According to Pew, the six industries with the largest share of middle income workers include:
However, there are many other ways that someone might identify as having a middle class job:
Home ownership is often seen as a cornerstone of the American dream, symbolizing financial stability, independence, and long-term investment—especially for this segment of the population.
For many, owning a home represents not only a place to live but also a significant milestone in achieving economic security. It provides a sense of pride and accomplishment, allowing individuals to build equity over time and potentially pass on wealth to future generations. Moreover, home ownership offers stability and a sense of community, as homeowners are more likely to stay in one place and contribute to the local area.
Despite the challenges of rising housing costs and economic fluctuations, owning a home remains a key aspiration for many middle-class families, embodying the promise of a better, more secure future.
Savings play a crucial role in defining this segments experience, providing a financial cushion and a pathway to future opportunities. For these families, having a robust savings account means security against unexpected expenses, such as medical emergencies or car repairs, and the ability to invest in significant life goals like education, homeownership, and retirement. Are you wealthy? Check your savings account because you may have more wealth than you realize.
Learn more about average household savings.
While the American Dream may be evolving, it has typically encompassed the freedom to pursue happiness, whether through entrepreneurship, raising a family, or simply enjoying a comfortable lifestyle. Despite its diverse interpretations, the common thread for the middle class is the aspiration for a secure and fulfilling life, where hard work and determination yield tangible rewards. This dream adapts to personal values and circumstances, reflecting the unique aspirations of each individual while collectively driving the ethos of middle-class America.
No matter your “class,” if you want to do better financially, you would do well by creating and managing a holistic financial plan. The Boldin Retirement Planner enables you to
1) Get organized and set goals
2) Assess your financial strengths and weaknesses
3) Learn how to do better through considered decision making and personalized tips from a digital coach
4) Stay on track by enabling you to monitor your plan and make updates over time
A: Income levels alone do not define the middle class. First, people often use 66–200% of the median household income. But financial wellness also matters. For example, having savings, low debt, and stable spending habits contributes to being middle class. These factors shape real financial security.
A: Education plays a big role in class identity. Many middle-class individuals hold college or professional degrees. However, student loan debt may impact financial status. Therefore, education can both boost earnings and strain finances.
A: Middle-class jobs often include teaching, healthcare, public administration, and skilled trades. These occupations generally offer stable income and benefits. Moreover, they support the lifestyle many people consider “middle class.”
A: Home ownership is often seen as a key sign of middle-class stability. Owning a home signals equity and long-term planning. Still, it depends on location and expenses. For example, rising housing costs can challenge middle-class families.
A: Experts suggest having 3–6 months of living expenses in an emergency fund. In addition, a retirement savings of around $100,000–$200,000 is common for many middle-class households. However, savings needs depend on individual goals.
Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.
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There is a lot of buzz around “financial wellness.” But unlike many fads, financial wellness is definitely a worthwhile pursuit.
