Millions of people in the United States are looking for side hustles to pay for their basic needs, while only a small percentage of the population can afford certain luxuries.
According to a Gallup survey from April 2022, around 73% of Americans say they belong to the middle class, while 14% claim to be in the upper middle class, but how accurate is this self-reporting?
What class do you belong to, according to your income?
The United States Census Bureau conducted a study that divided households into five groups according to earnings: upper class, upper middle class, middle class, lower middle class, and lower class.
According to the most recent census data, those who earn $153,001 a year or more belong to the upper class in the country, while those who generate income between $94,000 and $153,000 fall into the upper middle class. Various studies show that only two percent of the population belong to the upper class.
Below is a list of the income you must generate to be part of the upper, middle or lower class in the United States, according to the Census Bureau:
Upper class: $153,001 a year or more
Upper middle class: From $94,000 to $153,000 dollars per year
Middle class: From $58,021 to $94,000 dollars per year
Lower middle class: From $30,001 to $58,020 dollars per year
Lower class: $30,000 a year or less
Data is based on 2022 figures, which comprise the most recent information available*
Other aspects to consider in determining economic class
Although income is an important factor when determining which economic class you belong to, experts say that other aspects that are of similar importance must also be considered. These include the education of individuals, the area in which they reside and even their savings capacity.
For example, a person may fall into the “upper middle class” category in Missouri based on this earning table, but this income would not be enough to maintain the same lifestyle in cities like Chicago or New York.
Upper middle class: From $94,000 to $153,000 dollars per year. Middle class: From $58,021 to $94,000 dollars per year. Lower middle class: From $30,001 to $58,020 dollars per year. Lower class: $30,000 a year or less.
The median household income across all 345 cities is $77,345, making middle-class income limits fall between $51,558 and $154,590. On a state level, it takes the most money to be middle class in New Jersey. A household making between $64,224 and $192,692 would be considered middle class on a state level.
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range. "The upper middle class has grown...and its composition has changed.
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.
One commonly used definition from the Pew Research Center sets a middle-class income between two-thirds and twice the national median income, or $67,819 to $203,458 for a family of four in 2022. Most Americans consider the lower end of that range, $75,000 and $100,000, to be middle class, according to the Post poll.
There's no single definition of “middle class.” According to the Pew Research Center, middle class households have an income that's between two-thirds and twice the U.S. median household income of $70,784. (A $75,000 salary falls easily within this range.) Recommended: What Is a Six-Figure Salary?
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year.
The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau. 21 Using Pew's yardstick, middle income is made up of people who make between $43,350 and $130,000.
How much do you need to earn to be in the top 10% income bracket? A 2022 study by the Economic Policy Institute (EPI) found that the top 10% of earners nationally received an average income of $167,639 in 2021.
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.
“Good income is relative to the average household income in America, which is $78,000 right now.” Real median household income in the U.S. was $78,250 in 2019 and fell to $74,580 in 2022, according to the Census Bureau. "You're not a bad person. You're not a horrible income earner.
“The upper class is characterized by extreme wealth and privilege,” Allen said. “They have access to the best education, healthcare and social connections. Owning multiple properties and having a high level of social status are also hallmarks of this class.”
The upper middle class is often defined as the top 15% to 20% of earners. According to the Social Security Administration's 2022 wage data, the average upper-middle-class income was roughly between $80,000 and $100,000.
According to Schwab's Modern Wealth Survey, Americans said last year that it takes an average net worth of $2.2 million to qualify a person as being wealthy. (Net worth is the sum of your assets minus your liabilities.)
Poverty Class (Bottom 20%): The median net worth is $6,030. This group typically includes younger individuals with significant student debt or low-wage jobs. Lower-Middle Class (Next 20%): The median net worth is $43,760.
As of 2022 (the most recent Census data), the average median household income in the U.S. was $73,914, meaning the national range for the middle class is roughly $49,271 to $147,828.
21 Using Pew's yardstick, middle income is made up of people who make between $43,350 and $130,000. 7 This is a simplistic calculation, however, as it does not account for household size or location.
According to the Census data, here's how household income breaks down in the United States: Households in the lowest quintile: $30,000 or less. Households in the second quintile: $30,001 to $58,020. Households in the third quintile: $58,021 to $94,000.
Based on that number, if you earn between $50,000 and $150,000 a year, you qualify as middle class. Around half of Americans fall into the middle-class category as of 2021, according to the Pew Research Center, but the numbers have been shrinking over time, down from 61% in 1971.
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