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
Upper-middle class: $94,001 – $153,000. Upper class: greater than $153,000.
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 someone upper class? ›
The upper class comprises households with substantial income from wealth or entrepreneurial activity, or in which the breadwinner is in managerial or professional employment. At the top, with incomes well above the mean, is an upper class comprising people with assets or skills that are internationally transferable.
What income level is middle class? ›
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.
Does upper middle class mean rich? ›
Some sources define the upper middle class as anyone making a lot of money but haven't crossed the threshold to become truly wealthy. These individuals often have a net worth of at least $500,000 to $2 million.
Are millionaires upper class? ›
According to research from Ameriprise Financial, 91% of U.S. millionaires don't classify themselves as upper-class rich. The study also found that 60% and 31% of investors with $1 million or more surveyed consider themselves as “upper middle class” and “part of the middle class,” respectively.
How do you differentiate the upper middle and lower 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 net worth is upper class? ›
The Federal Reserve provides the median net worth for these groups in its 2022 Survey of Consumer Finances. Here's the much each group has: The upper class starts with an average net worth of $793,120. That's for the top 80% to 90% of earners.
What is the definition of lower class? ›
a class of people below the middle class, having the lowest social rank or standing due to low income, lack of skills or education, and the like.
Who belongs to upper class? ›
The term upper class is a socioeconomic term used to describe those who reside on the highest levels of the social ladder above the middle and working or lower classes. They generally have the highest status in society and hold a great deal of wealth.
Members of the upper class in American society are commonly distinguished by their extensive education and affiliations with prestigious institutions, such as the Ivy League and other private universities.
What makes you lower class? ›
The lower class is typified by poverty, homelessness, and unemployment. People of this class, few of whom have finished high school, suffer from lack of medical care, adequate housing and food, decent clothing, safety, and vocational training.
Am I upper or middle class? ›
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 income is considered upper class for a single person? ›
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.
What is the top 1 income in the world? ›
If you earn $60,000 a year after tax and you don't have kids, you're in the richest 1 percent of the world's population. If you have a household income of $130,000 after tax and you've got a partner and one kid, you're also in the richest 1 percent.
What income is considered wealthy? ›
According to IRS standards, a monthly income of approximately $45,000 qualifies someone as wealthy. However, if you're aiming for the top 1% as measured by the Economic Policy Institute (EPI), you'd need to earn about $68,277 monthly.
What net worth makes you upper class? ›
The upper class has an average net worth of $793,120 to $2.65 million, while the lower class has $16,900. The middle class ranges from $58,550 to $300,800. You can grow your net worth by saving and investing consistently, investing in the stock market, and being careful about taking on debt.
Does income determine social class? ›
Objective social class is generally operationalized in terms of wealth and income, educational attainment, and occupation.
Do upper class pay more taxes? ›
According to a 2021 White House study, the wealthiest 400 billionaire families in the U.S. paid an average federal individual tax rate of just 8.2 percent. For comparison, the average American taxpayer in the same year paid 13 percent.
