Yeah, I agree with that ^^^ and empthsize the "at least" part.
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Upper Middle Class Income in your area?
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I am assuming you are just doing this for conversation sake. But it threw be off until today and some others as we answered what we thought upper middle income would be for the country.
Example, I could live in a shack and the people around me live in cardboard boxes, so my part time job at $8 an hour would put me in the upper middle class.
Zee09
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Well said!
Yeah but the OP was curious about income, not net worth. Which can be a slippery slope and why I like the income number too.
My definition of "upper middle class" - The stage in someone's financial life where they have a net worth sufficient to insulate them from most money problems and an income that allows them to live a certain lifestyle.
Income means nothing - I know a person making $500K per year who is in debt 7-figures with no savings and I know a person making $100K per year with no debt and 7-figures in retirement. What these questions are really asking (most times) is at what point financially am I "safe" from most money problems and at what point can I live a certain lifestyle while still being safe from those problems? The first person has a huge negative net worth and I would argue is not in the upper-middle-class because while they have a high income, they are not safe from money problems because if he didn't work for just a few months he'd be homeless. If the person making $100K per year lost their job at 52, I'm pretty sure they could just retire while keeping their current lifestyle for the rest of their lives. Sure, this person does not live in a $750,000 house in a wealthy town but he owns his $300K house outright in his still very nice town and the security in that is huge.
Hard to say what middle class is these days.....people define these things differently. What is "rich"?
In NJ, property taxes are the killer. While NJ has the 2nd best public school system in the country, if you don't have kids living here may not be worth it to you.
In NJ, property taxes are the killer. While NJ has the 2nd best public school system in the country, if you don't have kids living here may not be worth it to you.
My in-laws live ocean front in MA in what I guess is now a $1.5M home if sold today. They also own home in one of best ski towns in USA that is worth $400k+.
The thing is they get by with no retirement income and living off $30k/year in Social Security. In short they are below poverty line and qualify for food stamps etc.
How can they afford the property taxes on 30k a year?
Net worth is a fantasy unless it’s liquid, many ways to twist net worth.
500k a year is substantial by any income measure in the USA how he cares to spend it or waste it is his business or problem.
Bottom line most Americans would do well on 500k a year but there will always be people who don’t, in your example you assume the 100k worker can retire early but not the 500 k person. The 100 k person could be in worse shape then the 500k
The 500k worker can literally walk away from everything and still have a very sustainable way of life.
The 100k worker walks away from everything and he will be on shaky ground and not retiring with much of anything
I see your point, but It depends on where they are in their working career.
If they have 10 years of work time left, they can prepare for the future.
If they have 2 or 3, then they are likly in deep yogurt.
And remember, any job can be lost at any time.
Wha?! I don't even know where to start. Yeah, sure net worth can be "twisted" if someone wants to lie to themselves or someone else - let's assume I'm talking about a financial person looking at the situation as an outside person with no skin in the game. In my above example, I told you their situations and then you just rewrote them with the opposite outcome. I'm telling you the person making $100K per year is worth 7-figures, has no debt, and could easily retire in the next few years. I'm telling you the guy making $500K lives in a $1.2M house he can't afford, drives cars he can't afford, has little saved for retirement, he has two kids who are done with college and one more to go, he's 57 and it's this way because he spends everything he makes. Multiple big vacations every year, a lake house and a boat. He owns none of it. He is technically financially insecure because if he experiences any changes in cash flow for any reason he is screwed.
My point...income does not mean anything if you spend it all and find yourself "financially insecure" in spite of your large salary.
If you live in an expensive town, the tax rate is low. Also if you're elderly, MA has a law that allows you to defer paying your property taxes and it just accumulates until you die and the property is sold. I think Boston just charges one percent but the max is 8%, interest rate varies by town.
The ski home is $800/year and $6k/year at beach. They make it off the balance. My wife is trying to convince her to apply for state or federal aid.
They can rent their beach home for $4k/week if they needed money during beach season .
The IRS quintiles would let you into the upper middle class (4th quintile) at $101,570 for 2018 numbers, so i'd say $120k a year is where you get in the door of upper middle class speaking in terms of a nationwide average. Give or take for your cost of living.
Top 20% demands 233k a year to start in 2018, so maybe $250k in 2021 numbers is my guess.
IMO you haven't really secured your place in the upper middle class unless your total tax burden (state+federal+property) hits 6 figures. That could be roughly the top 5-10% of earners depending on area. When your paying more in taxes than 60% of the USA makes you are upper middle class for sure.
Top 20% demands 233k a year to start in 2018, so maybe $250k in 2021 numbers is my guess.
IMO you haven't really secured your place in the upper middle class unless your total tax burden (state+federal+property) hits 6 figures. That could be roughly the top 5-10% of earners depending on area. When your paying more in taxes than 60% of the USA makes you are upper middle class for sure.
I think around here it would probably be at least 5M for a family of 4 at 50 year old for the head of household. Maybe 10M if you want to be lower upper class or so, but anything less than 2M would just be middle class and less than 500K would probably be lower middle class.
Yup...I grew up in Darien, CT. My neighbors growing up were Peter Criss of Kiss, the President of Madison Square Garden, and I went to school with Topher Grace and Chloe Sevigny. You belonged to the Country Club of Darien and Wee Burn because they had a better beach club. If you didn't make multiple million you were poor - not really - my father was an attorney who didn't make millions but by the end of his life, he couldn't afford to buy his own house due to the absolutely crazy increase in real estate value.
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@PandaBear where are you located? I think your numbers are pretty high. $5M would equate to owning 50% of a $2M home and $4M in savings and investments. $10M means you got stock options that paid off on top of a huge home net gain. I am not sure many 50 years olds have achieved that.
I am in the poor part of Los Gatos, near the golf course, a few blocks from Monte Sereno.
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