IS 200k household income "middle income" these days? Has that threshold increased?

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panchilly
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IS 200k household income "middle income" these days? Has that threshold increased?

Post by panchilly » Mon Apr 03, 2017 3:59 pm

It's hard to get a read on what is "middle class" vs "upper middle class" vs "working class" with respect to income. it's always a moving target and year to year wages fluctuate wildly. These days it seems there are a LOT of folks earning well over 100k individually, even relatively inexperienced folks in corporate professions. My gut feel is that wages have inflated higher than what the CPI numbers are telling us. Maybe inflation is right around the corner?

Our situation:
Boston area
early 30s couple
me: software engineer 195k total comp (rough breakdown is 145k base, 15% target bonus, 30k stock) work at a large firm
wife: employee at non profit 50k/year base only
total: 245k

what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.

SO what is middle class?

mptfan
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by mptfan » Mon Apr 03, 2017 4:03 pm

panchilly wrote:My gut feel is that wages have inflated higher than what the CPI numbers are telling us.
Your gut feeling that wages have inflated more than the price of goods and services is correct, but the CPI numbers do not tell us that because the CPI numbers do not measure wage inflation, they measure price inflation. Wage inflation is measured by the National Average Wage Index, and it has generally shown a higher wage inflation as compared to price inflation as measured by the CPI-U. Basically wages (the national average wage index) have increased more than inflation (the price of goods and services) over the last several years.
Last edited by mptfan on Mon Apr 03, 2017 4:05 pm, edited 1 time in total.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by KyleAAA » Mon Apr 03, 2017 4:04 pm

$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.

mptfan
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by mptfan » Mon Apr 03, 2017 4:06 pm

KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?

pennywise
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by pennywise » Mon Apr 03, 2017 4:08 pm

No it is not, in no universe is $250K considered a middle income other than for an extremely highly compensated techie in a high cost of living metropolitan area :)

You are welcome

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by evancox10 » Mon Apr 03, 2017 4:08 pm

Well according to the American Community Survey (http://www.deptofnumbers.com/income/mas ... ts/boston/) from the census, the median household income in Boston was just under $100,000 for 2015. At 2.5x that amount, I would say that places you solidly in the upper-middle, if not upper, class.
Last edited by evancox10 on Mon Apr 03, 2017 4:09 pm, edited 1 time in total.

panchilly
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by panchilly » Mon Apr 03, 2017 4:09 pm

mptfan wrote:
panchilly wrote:My gut feel is that wages have inflated higher than what the CPI numbers are telling us.
Your gut feeling that wages have inflated more than the price of goods and services is correct, but the CPI numbers do not tell us that because the CPI numbers do not measure wage inflation, they measure price inflation. Wage inflation is measured by the National Average Wage Index, and it has generally shown a higher wage inflation as compared to price inflation as measured by the CPI-U. Basically wages (the national average wage index) have increased more than inflation (the price of goods and services) over the last several years.
i think i have read somewhere that inflation in wages is a leading indicator of upcoming CPI inflation. I look around and it really is ridiculous. 200k is the new 100k in Software Development right now in major markets (boston, nyc) and in SIlicon Valley its more like 250k

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by delamer » Mon Apr 03, 2017 4:11 pm

mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle - the classification has nothing to do with what you spend; it is based on income.

student
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by student » Mon Apr 03, 2017 4:12 pm

Try this calculator. It takes into account of the location and the size of the household.

http://www.pewsocialtrends.org/2016/05/ ... dle-class/

Fclevz
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Fclevz » Mon Apr 03, 2017 4:12 pm

According to the latest numbers from the U.S. Census bureau:

Lowest median income is for female householders at $29,022
Highest median income is for married couples at $84,626
Median income for all households is $56,516

mptfan
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by mptfan » Mon Apr 03, 2017 4:13 pm

delamer wrote:
mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle - the classification has nothing to do with what you spend; it is based on income.
Perhaps we could say they have an upper middle class income but live a middle class lifestyle?

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Christine_NM » Mon Apr 03, 2017 4:16 pm

Maybe inflation is right around the corner?
Wage inflation means competition for employees. Classically, I think wage inflation suggests we are near full employment, and from there we get no increase in growth, so the most likely next economic stop is recession or at best a soft landing. Hard to tell if today's circumstances are the rule or some kind of exception. Cheers! They don't call it the dismal science for nothing. Take your pick, inflation or recession or both.
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delamer
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by delamer » Mon Apr 03, 2017 4:18 pm

panchilly wrote:It's hard to get a read on what is "middle class" vs "upper middle class" vs "working class" with respect to income. it's always a moving target and year to year wages fluctuate wildly. These days it seems there are a LOT of folks earning well over 100k individually, even relatively inexperienced folks in corporate professions. My gut feel is that wages have inflated higher than what the CPI numbers are telling us. Maybe inflation is right around the corner?

Our situation:
Boston area
early 30s couple
me: software engineer 195k total comp (rough breakdown is 145k base, 15% target bonus, 30k stock) work at a large firm
wife: employee at non profit 50k/year base only
total: 245k

what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.

SO what is middle class?
It is natural to use your personal situation -- and that of your educational and employment peers -- as a frame of reference. And I am sure that you don't feel wealthy with your income in a HCOL area like Boston. But I bet you are comfortably in the top 10% of income even in your area.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by randomguy » Mon Apr 03, 2017 4:18 pm

mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle pretending to be middle class;). Heck 50k of spending alone even without the savings is almost enough to get you to the bottom of the upper middle class for some definitions.

The OP is suffering from clustering like most of us do. You hang out with coworkers making 100k+ and living in communities where rents make sure everyone is also making 100k+. It leads to a distorted world view.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by deltaneutral83 » Mon Apr 03, 2017 4:19 pm

mptfan wrote: What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Well over 20-30 years they certainly won't be middle class in retirement as they'll have millions invested appropriately!

student
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by student » Mon Apr 03, 2017 4:21 pm

If you want to look at income statistics at the local township/city level, try http://statisticalatlas.com/United-States/Overview

delamer
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by delamer » Mon Apr 03, 2017 4:23 pm

mptfan wrote:
delamer wrote:
mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle - the classification has nothing to do with what you spend; it is based on income.
Perhaps we could say they have an upper middle class income but live a middle class lifestyle?
That sounds reasonable for your hypothetical.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by stoptothink » Mon Apr 03, 2017 4:23 pm

KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
Only on Bogleheads is this question even asked.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Loik098 » Mon Apr 03, 2017 4:24 pm

panchilly wrote:These days it seems there are a LOT of folks earning well over 100k individually, even relatively inexperienced folks in corporate professions. My gut feel is that wages have inflated higher than what the CPI numbers are telling us.
Confirmation bias!! Unless you personally know thousands of people and their salary trends, a "gut feel" is, unfortunately, meaningless. I'm sure an employee of McDonalds living and working in the slums wouldn't agree with you.

What is middle class? Who knows. As demonstrated here, anyone can pull a random factoid from somewhere, but few will agree on it.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by munemaker » Mon Apr 03, 2017 4:26 pm

Fclevz wrote:According to the latest numbers from the U.S. Census bureau:

Lowest median income is for female householders at $29,022
Highest median income is for married couples at $84,626
Median income for all households is $56,516
Nationally I would have guessed $55K for median family income, so this sounds right for me.

$200K is well above middle income for a family.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by linguini » Mon Apr 03, 2017 4:34 pm

mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
I don't like using the word "class" when talking about income because it conflates two concepts. Social class implies more than just pure income and wealth: some sort of inherited station, education level, different cultural influences, consumption-based status-signaling, etc. But a family that earns $200k+ a year is a high income family, regardless of what it spends.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by greg24 » Mon Apr 03, 2017 4:37 pm

panchilly wrote:These days it seems there are a LOT of folks earning well over 100k individually
That indicates you are upper middle class and associate with a lot of folks who also make a lot of money. Congrats. :sharebeer

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Pajamas » Mon Apr 03, 2017 4:40 pm

panchilly wrote: total: 245k
That is well into the top 5% of household incomes in the U.S. If you think that is a middle income, your perspective is distorted, even if you are in a high cost of living area. It is easy to compare yourself to even higher wage earners, but it would probably benefit you to make a deliberate effort to spend some time with people with low and middle incomes even if you have to volunteer to do it.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by bigred77 » Mon Apr 03, 2017 4:43 pm

A single person earning 100k annually is in the top 10% of individual income earners in the US.

A household earning 200k annually is in the top 6% or so of households in the US.

That income is not middle anything. Even in very HCOL locations it is not middle class. Now it may be middle of the pack in your circle of friends and family, which can distort your perception of things, but it is not middle class.

I fully admit to falling into this trap as well. My income is lower than the median for my neighborhood. Sometimes it feels like I should be doing better financially but when I take a step back I realize it's just my own skewed perception.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by bradshaw1965 » Mon Apr 03, 2017 4:47 pm

It's decidedly Upper Middle Class. You can argue about Upper Middle Class having more to do with professions and Upper Class having to do with allocating capital more so then income, but 2.5x the median puts this income well outside Middle Class.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by reriodan » Mon Apr 03, 2017 4:53 pm

panchilly wrote:what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.
Hahahaha. I think EVEN on Bogleheads that will be considered a lot, and that is saying something.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by TheTimeLord » Mon Apr 03, 2017 4:54 pm

panchilly wrote:SO what is middle class?
http://www.pewsocialtrends.org/2015/12/ ... -class-02/

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by sometimesinvestor » Mon Apr 03, 2017 5:21 pm

In theory , in my opinion middle class income varies by state but is in the range of median income for the state or in a few cases city (Boston would be one)+/- 10%. However it is important to note that in surveys the number of people who indicate in response to a question that they are in the middle class is VERY LARGE and includes some people you and I would consider rich and some we would consider not well off.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Pinotage » Mon Apr 03, 2017 5:25 pm

reriodan wrote:
panchilly wrote:what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.
Hahahaha. I think EVEN on Bogleheads that will be considered a lot, and that is saying something.
lol yeah.

Not to pile on, but I guess I'm piling on.

A sustained household income of 200-250K, esp. with upward trajectory, is most certainly a lot. The fact that you've managed to stir up this group should tell you something. :wink:

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by NotWhoYouThink » Mon Apr 03, 2017 5:30 pm

Why do you ask?

$200K is not enough to pay for everything you think you should have and have money left over to save adequately for college and retirement. Neither is $500K. Whatever you make, you'll find more ways to spend it than you can afford. Taxes go up, lifestyle expectations go up.

It is easier to stay out of debt than to get out of debt. Avoid introducing spending habits you cannot maintain and $200K a year is more than enough.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by ribonucleic » Mon Apr 03, 2017 5:31 pm

For what it's worth, class in America is a complicated formula in which money is only a single - and not necessarily the most important - factor.

There is also a documented tendency on either side of the income scale to believe oneself "middle class" when one is not.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by knpstr » Mon Apr 03, 2017 5:32 pm

http://www.cnbc.com/2017/03/20/heres-ho ... class.html

here ya go!

(OP, you are in the Upper Class by a margin of about 2x the income requirement)

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by HomerJ » Mon Apr 03, 2017 5:35 pm

panchilly wrote:what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.
When the Revolution comes, and most of us top 5% are guillotined, it will be comments like this that are used to justify it...

:)

Almost as good as "Let them eat cake".

Seriously though... it's good to get some perspective. You are definitely in the top 10%, probably 5% of households. Sure, that's still millions and millions of households, so it's not surprising you know plenty of people in your circle making the same kind of money.

But that kind of income is not middle-class. You have no idea how many other families and children live on far far less. You should count your blessings. Look around more.

You put in the hard work; you earned that salary. You should be proud of how well you are doing. But, more importantly, you should, at least, be AWARE of how well you are doing.
Last edited by HomerJ on Mon Apr 03, 2017 5:36 pm, edited 1 time in total.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by KlangFool » Mon Apr 03, 2017 5:36 pm

OP,

I live in a neighborhood with annual median income of 150K. I know that I am not middle class. I know that I live in a bubble.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by perl » Mon Apr 03, 2017 5:55 pm

You have a high income - income in the top 10% of US households is high. 'Upper middle class' is a euphemism that means 'wealthy but trying to pretend we're not wealthy because really we're just regular normal folks.'

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by amphora » Mon Apr 03, 2017 5:57 pm

As someone familiar with Boston, I understand where OP is coming from but 200 - 250 K is upper middle class, whatever that means. Certainly housing prices have inflated A LOT in the Boston area over the last decade. What I think OP is noticing is that in many suburbs of Boston, the average family income is above 150 K and it is even higher among new arrivals in those suburbs. So you may very well be in the "middle" of the income distribution in your town but not in the state or country.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by jharkin » Mon Apr 03, 2017 5:59 pm

Nationally you are nowhere near middle class or even upper middle. You are top 4-5%. Data is easily available online:

https://en.m.wikipedia.org/wiki/Househo ... ensus_data


Living in the same area and also working in tech I know you probably don't feel upper class due to the cost of living here, but yet you are.
Last edited by jharkin on Mon Apr 03, 2017 6:04 pm, edited 1 time in total.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by The Wizard » Mon Apr 03, 2017 6:01 pm

I'm pretty sure that the key distinction between classes is the size of your boat.
That Paul Allen guy from Microsoft has a boat bigger than my house lot, so he qualifies as Upper Upper Class...
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by onourway » Mon Apr 03, 2017 6:18 pm

There is also the fact that when you compare yourself directly to your peers, the only things you can usually compare is house size and location, cars, vacations, toys, schools, etc. Many of these things are available easily on credit, and, statistically speaking, most of your peers are probably not saving in a Boglehead manner and are also probably spending a lot on credit, both of which combine to make you feel less well off than you really are if you are living in less home than you can afford and saving 20-50% of your income. I suspect if your actual net worth were publicly broadcast as material things are, the feeling would be quite different.

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by Grt2bOutdoors » Mon Apr 03, 2017 6:22 pm

mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle class. Your income whether it is saved or spent determined your income class, not your savings.
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by dbr » Mon Apr 03, 2017 6:24 pm

panchilly wrote:
what is 200-250k for a married couple these days? It feels like this is a middle class wage nowadays. It really isn't much.
You have a horribly distorted perception of economic reality.

Also, there is not some remarkable annual change in the income structure of the American population. Probably the striking trend in incomes is the continually increasing income inequality in this country. http://inequality.org/income-inequality/

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Re: IS 200k household income "middle income" these days? Has that threshold increased?

Post by The Wizard » Mon Apr 03, 2017 6:25 pm

Grt2bOutdoors wrote:
mptfan wrote:
KyleAAA wrote:$200-250k definitely isn't middle class, not even in places like Manhattan or San Francisco. That's solidly upper-middle class, bordering on upper class depending on which definition you use.
What if someone makes $200k and lives in a low cost of living area and spends $50k a year and saves the rest (after taxes). Is that person middle class or upper middle class?
Upper middle class. Your income whether it is saved or spent determined your income class, not your savings.
Are you saying that Conspicuous Consumption is then meaningless? Just a pretentious sham?
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Re: IS 200k household income "middle income" these days? Has that threshold increased?

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