What is Middle Class....Really?
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Anonymous
mainly: a college fund for the kids, not just a bs, maybe an ms, jd, or md. retirement savings so that parents can be independent into old age and not have to expect children to help out tutors/clubs/activities for kids not worrying so much about unexpected expenses, not relying on others for help, etc... |
Anonymous
How much are you saving annually for retirement, and what age do you hope to retire - before 65? At 250K, you would be expected to fund all of your childrens' college costs; at $100,000, you will be able to get some loans and perhaps even some scholarships. When you say you vacation, is it camping down the shore or ten days in Italy? |
Anonymous
I honestly don't think I will get need based college fund at 100k. But I'd love to be wrong. Vacations in the past few years have been England/France (one week), Adirondacks, Disney and Sanibel Island. Retirement will be mid-60s I hope. |
Anonymous
DP, but I earn just under $110,000 and live very well, too. I'm single with no young kids - so that makes a difference,I suppose - and own a rather upscale $600,000 townhouse in a nice neighborhood, eat out at least three times a week with friends, go to movies or a play maybe three times a month, buy whatever clothes I feel like, belong to a tennis club (I'm getting better!), take a couple of mini-vacations a year (like three nights at Ocean City) and one big trip (like a 10-day Panama Canal cruise, which I did last winter), and still manage to save 10% of my income for retirement. I have one young adult child and give her nice gifts, too, (including treating her to the cruise I just mentioned.) I think I'm living a very nice life, too. What else would I need? |
Anonymous
Um yeah, single with just one child (and it sounds like she doesn't live with you) would have a totally different lifestyle than a family of 4 making the same amount...sounds like you have a nice life though, I'm jealous 
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Anonymous
Well, you can be jealous NOW....but I had to watch my spending closely in my earlier years, when I was earning less - and had a child still at home. The last several years have been easy, though. |
Anonymous
So are you saving enough to fund most of your childrens' college costs (if you wanted to pay for college)? Will you retire on social security mainly? The point of these questions is that if you had a $250K HHI, you might wish to retire at 60 rather than 65, and you might expect to fund your retirement mainly out of earnings from investment rather than social security. Not much difference in your day to day lifestyle now. |
Anonymous
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OK.....here's where I think the dividing line is between middle-class and lower-middle (or even lower class) for ONE person, based on my own observation of how far money goes in the DC suburbs. (NOT the city.)
I have a friend who had been earning $65,000 in an administrative assistant type job. (She did not go to college.) Sometimes she would complain about money being tight, but she still managed to go for pedicures, buy a new car, eat at pretty nice restaurants, and go on mid-priced vacations, while renting an apartment in an OK neighborhood. (I have no idea if she was saving any money, but honestly....I doubt it was much.) But two years ago, at age 57, she lost that job and spent a long time finding a replacement. She finally did, but it's for $45,000. She wasn't happy with the salary, but she took it, realizing how hard it is for someone late 50s to find a job. Boy, has her life changed. She no longer can afford to go to the theater, does her own toe nails, cooks and eats at home, does not travel at all, and has even told me she could not afford to meet me at this very reasonable place for lunch. (I treated her.) so I'd say the dividing line between middle class and "just getting by" is $65,000 vs $45,000. |
Anonymous
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Middle class = enough to live a nice life today
Upper middle class = if smart and frugal, enough to maintain a good standard of living in retirement without counting on social security |
Anonymous
I agree - this is a pretty good definition. |
Anonymous
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When I was being taught how to fundraise, the grizzled old consultant asked a question to the group of trainees (all fresh out of college). The whole room guessed and guessed.
"100k per year." No. "200k per year" No. "300k per year." No. ... "1m per year?" Answer: 20m in the bank. Why? As this fundraising consultant put it. "For most families you can really feel income increases up to about 80 grand per year, give or take. Below that, its hard to make ends meet. Above that, you can essentially afford to live, but it becomes a question of gradations of nice. As income goes up public school ----> becomes public schools in an expensive boundry ----> becomes catholic school ----> becomes private school ----> becomes boarding school. Your families one used honda civic becomes ----> 2 used civics ---->becomes 2 VWs ----> becomes 2+ Audi/BMW/Mercedes/Lexus type cars ---> becomes 4-5 nice cars include possibly a total "toy" of a sports car. Your YMCA membership ----> becomes a Vida membership becomes ----> country club membership ----> multiple club ----> Yosemite club membership. A 3br TH ----> becomes a 4br SFH ----> 8000 sf mc mansion ----> 8000 sf + vacation homes. 20 million in the bank is the point at which the average person can't accidentally slide their way into higher COH spending it all without going nuts. Between 80k/year and 20 million in the bank...the rest just comes down to how good of a saver you are / how good your financial decisions are. Thats why some people say "we live a great life off 180k HHI here" and others might say "we have 430k HHI and can't afford extras." The latter typifies the effect he was describing. The former are people who are learning to build wealth / live as if they are "upper class." The latter will always feel poor no matter how much they make...until they have about 20m in the bank. Then -- barring a crazy coke problem -- they should have trouble spending it. |
Anonymous
Are you saying between 80k and 20 million in the bank is middle class?? |
Anonymous
PP here. No I am saying that between 80k and 20 million net worth the gradations (lower middle, middle, upper middle, wealthy but feels middle class, etc) become more subjective and largely based on how much you save/how wise you are financially and less about actual income. So someone making 180k could be well on their way to wealthy while someone making 400k could feel constantly broke. |
Anonymous
Anonymous
According to the author, "they are living comfortably, but not large." |