Do I fall in America's lower, middle, or upper class? Here's how your income measures up in the US economic system

Moneywise
Do I fall in America's lower, middle, or upper class? Here's how your income measures up in the US economic system
Do I fall in America's lower, middle, or upper class? Here's how your income measures up in the US economic system

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.

The lines that divide Americans by economic class have always been blurry. For many households, where they stand on the income ladder comes down to a feeling rather than numbers.

But how can you know if your feelings line up with reality?

Don't miss

Pew Research Center’s income calculator is the quickest way to find the answer to that question.

But after you find out how you stack up, you may find the more important question is what do you do with that information so you can make the most of your earnings no matter where you fall.

Upper

Based on Pew’s analysis, a household of three needs an income of $156,600 to meet the definition of upper class, which amounts to more than double the national median.

In analyzing the trends, Pew points out that the wealthiest households are the only ones to have seen gains in wealth after the start of the Great Recession. Between 2007 and 2016, the median net worth of the top 20% increased 13% to $1.2 million.

Of course, it’s still important to protect your wealth regardless of what economic tier you fall under. By having a diversified portfolio, those in the upper class can maintain their position.

Those that meet this criteria might want to focus on hedging against inflation and investing in assets that have a low correlation with traditional holdings.

Commercial real estate is a solid option for inflation hedging. And private equity firm First National Realty Partners makes investing in this asset accessible.

With FNRP, accredited investors can collect quarterly cash flow through a diverse portfolio of grocery-anchored real estate. FNRP’s team of experts manages every component of the investment life cycle for you, vetting each investment opportunity that comes your way.

Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024

Middle

Many Americans associate themselves with the middle class. A Gallup survey in 2022 shows that just over half of respondents identified as either middle or upper middle class.

Based on Pew’s calculator, middle class earners are actually those whose income falls between $52,200 and $156,600, or two-thirds to double the national median when adjusted for local cost of living and household size. In 2021, the median income was $70,784, according to Census Bureau data.

If you fall in this bracket, investing your earnings is important and can help increase your wealth and build a cushion of savings.

One option to consider is Compound Real Estate Bonds, a real estate company that offers an opportunity to earn 8.5% APY through their SEC-qualified Real Estate Savings Bonds.

Compound has a strong focus on income producing real estate and real estate private credit, that can help you diversify your portfolio while helping to hedge it against inflation.

By choosing to invest with Compound, you can boost your retirement nest egg or savings over time and also enjoy the freedom of no fees or lock-in periods, so you have the flexibility to withdraw your funds whenever you need to.

However, if you’re unsure about where to begin when it comes to investing or navigating other aspects of your finances, consider working with a professional.

WiserAdvisor’s free matching service helps you find a financial adviser that can help you reach your goals. All it takes is a few minutes to answer some questions about yourself, and WiserAdvisor will provide you with a personalized match of two to three advisers.

Lower

Based on Pew’s analysis, a three-person household would be considered low income if they’re bringing in less than $52,200 a year. This group makes up a significant chunk of the U.S. population, with about 38% of households making less than $50,000 in 2021.

It’s important to highlight the disparity in opportunities for advancement for low-income households. While middle-class households rely on home equity to build their net worth and upper-class families rely on financial assets and investments to build their wealth, Pew found lower-income earners have fewer options to get ahead.

But not all hope is for lower-income earners, as there are ways to optimize your income and build up your wealth no matter where you stand.

First, storing your cash in a high-interest savings account could deliver returns of over 4%, while the U.S. Bank's standard savings APY of 0.01%.

Your economic status doesn’t have to determine whether you can become an investor either. With Acorns — an automated investing platform — investors of all levels can build their portfolios.

When you make a purchase on your credit or debit card, Acorns automatically rounds up the price to the nearest dollar and places the excess into a smart investment portfolio.

Start now and you can get a $20 bonus investment tp help you effortlessly save money and watch your wealth grow.

And if you’re looking to start diversifying your portfolio, Arrived makes real estate investing accessible to all types of investors.

Basked by world-class investors like Jeff Bezos, Arrived allows you to invest in fractional shares of rental and vacation properties, sparing you the burden of property management.

You can start by browsing through their curated selection of properties, each vetted for potential appreciation and income generation. Then, you can choose the number of shares you’d like to buy and start investing with as little as $100.

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement