Incomes vary widely across the United States, with some people making many times the amount that others earn. If you've ever wondered how your personal finances stack up, and what "class" your income officially puts you in, here's what you need to know.
What income do you need to be upper, middle, or lower class?
Based on 2021 data, here's what you would need to earn in order to be in each class:
- Lower class: This is defined as the bottom 20% of earners. Those in the lower class have an income at or below $28,007.
- Lower middle class: This is defined as individuals in the 20th to 40th percentile of household income. Earnings among this group are between $28,008 and $55,000
- Middle class: The middle class is officially those whose earnings put them in the 40th to 60th percentile of household income. The income range is $55,001 to $89,744.
- Upper middle class: Anyone with earnings in the 60th to 80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $89,745 and $149,131.
- Upper class: Finally, the upper class is the top 20% of earners and they have incomes of $149,132 or higher.
Take a look at these numbers and see where you fall based on your own earnings. And remember, this is a snapshot in time -- your earnings can change throughout your life, and so can your class designation.
Will your success be determined by your income and class?
It's probably not a surprise that those in the upper classes or in the upper middle class do have a higher net worth than those in the lower class or the lower middle class. But the disparity is greater than you might think. While the median net worth of those with incomes of $149,132 or higher is $805,400, the median net worth of those in the lower class is just $12,000.
Your income impacts how easy it is for you to build wealth. If you make more money, it is easier to save it and invest it in a brokerage account where it can work for you. If you make less money, then you may struggle even to cover the necessities out of your checking account, much less to buy valuable assets that help you grow richer over time.
But that doesn't mean people who don't make a lot of money can't be a financial success. A lot depends on what you do with the money you actually have, including how much you spend and how much you save.
There are plenty of people who make over $100,000 a year who live paycheck to paycheck, and plenty of people with incomes that put them squarely in the lower or lower middle class who have diligently saved and grown quite wealthy over many years.
Here's how you can improve your standing
Don't be discouraged if you aren't in the class you hope to be. For one thing, you have opportunities to increase your income by taking the following steps:
- Learning new job skills: You could obtain a certification, take part in a management training program at work, or take some classes to develop skills that may help you get promoted (such as computer training courses or public speaking classes), depending on your industry.
- Take on a side hustle: The average side hustle brings in $483 per month, which is a good amount of extra money that could make a meaningful difference in your income.
- Work some extra hours: If your company allows you to work overtime, take advantage of it, as many people are paid time and a half for overtime hours.
- Negotiate your salary: According to Pew Research, when workers negotiated for higher pay, 28% said they received the extra money they asked for and 38% indicated they were given more than originally offered but less than their ask. Whether you are getting a new job or staying at your current job but feel you're underpaid, it doesn't hurt to make a request for more money -- especially if you can find salary data to back up the fact that others in your industry are paid more.
And even if your earnings never put you in the top 20% of earners, you can still have a rich life and end up with the financial security you deserve -- especially if you prioritize saving as much as you can for as long as you can.
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FAQs
The U.S. Census divides households into quintiles by earnings. The lowest quintile has earnings of $30,000 or less, while the highest has an income of $153,001 or more. The rest of Americans fall within the middle of that range, with the official middle class earning between $58,021 and $94,000.
How do you know if you are upper middle class or upper class? ›
Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131. Upper class: The top 20% of earners, with household incomes of $149,132 or more.
What makes you upper class? ›
The term upper class refers to a group of individuals who occupy the highest place and status in society. Individuals who make up the upper class have higher levels of disposable income and exert more control over the use of natural resources.
What income is considered middle class for a single person? ›
With New Jersey ranking as the top state to make the most money to be considered middle class, other states ranking in the top five requiring salaries exceeding $50,000 to be in this category include Maryland ($63,321) and Massachusetts ($62,986), Hawaii ($61,633) and California ($61,028).
Does middle class mean wealthy? ›
The middle class is the economic stratum between the working class and the wealthy. In the United States, the middle class occupies about half of the population, mainly consisting of people who work in white-collar professions, small businesses, or skilled trades.
What is the difference between upper and lower middle class? ›
The lower middle class is often made up of less educated people with lower incomes, such as managers, small business owners, teachers, and secretaries. The upper middle class is often made up of highly educated business and professional people with high incomes, such as doctors, lawyers, stockbrokers, and CEOs.
How do you define upper class or middle class? ›
Today, concepts of social class often assume three general economic categories: a very wealthy and powerful upper class that owns and controls the means of production; a middle class of professional workers, small business owners and low-level managers; and a lower class, who rely on low-paying jobs for their ...
What makes you middle class? ›
According to the OECD, the middle class refers to households with income between 75% and 200% of the median national income.
What is the middle class now? ›
In a large U.S. city, a middle-class income averages between $52,000 and $155,000. The median household income across all 345 cities is $77,345, making middle-class income limits fall between $51,558 and $154,590.
What makes you lower class? ›
According to the Census Bureau's Income in the United States: 2022 report, the median household income is $74,580 (a 2.3% decline from 2021), while household income levels for each class level are as follows: Lower class: less than or equal to $30,000. Lower-middle class: $30,001 – $58,020.
Upper class in modern societies is the social class composed of people who hold the highest social status, usually are the wealthiest members of class society, and wield the greatest political power.
What are 3 characteristics of the upper class? ›
MANAGERIAL/UPPER-CLASS
- Owning one or multiple homes, travel (including international)
- Dependent on salaries, not investments, to pay bills — mid-level to high-level managerial or professional jobs.
- Education at elite/selective colleges or at public universities often without student loans.
In 2020, according to Pew Research Center analysis, the median for upper income households was around $220,000 and the median for middle income households was slightly above $90,000.
What salary is upper middle class? ›
Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range.
What is a comfortable middle class income? ›
According to the Pew Research Center, you could be considered “middle class” if your household income is two-thirds to double the national median income — so $47,189 to $141,568.
What are the income categories? ›
Types of Income
Three main categories of income that are part of taxation are: ordinary income, capital gain, and tax-exempt income.
What determines working class? ›
What Is the Working Class? "Working class" is a socioeconomic term used to describe persons in a social class marked by jobs that provide low pay, require limited skill, or physical labor. Typically, working-class jobs have reduced education requirements.
Are millionaires upper middle class? ›
60% of those millionaires identify as upper middle class, while 31% interestingly identify themselves as just middle class. Surprisingly, a large number of millionaires reside comfortably in the middle class, revealing an oddly curious disconnect between their sense of self and their financial security.
What is the difference between upper middle-income and lower middle-income? ›
Lower middle-income economies are those with a GNI per capita between $1,136 and $4,465; upper middle-income economies are those with a GNI per capita between $4,466 and $13,845; high-income economies are those with a GNI per capita of $13,846 or more, according to the World Bank Country and Lending Groups.
