![]() Inflation will be 3% and our expected portfolio returns are 7%.įor Social Security, we’ll simply input Mark’s and Matt’s income into the online quick calculator to arrive at a monthly benefit. Assumptionsįor simplicity and consistency, we’ll use the same assumptions we’ve made in prior blog posts in all our calculations. Since the lower end of this range was covered in a prior blog post, let’s focus on two retirees today: Median Mark, who earns the median income of $74,270 per year, and Upper-Middle Matt, who earns twice that amount and represents the top-end of the middle-class. That gives us a middle-class income range between approximately $49,500 and $148,500 if we’re focusing strictly on this age group. Census data, the median household income for those between ages 55 and 64 is $74,270 per year. ![]() What is “Middle-Class”?Īccording to the Pew Research Center, middle-class households earn between two-thirds and two times the U.S median household income. Be sure to watch until the very end where I discuss the implications of what I found. I found plenty of interesting data, including one item that should concern us all. So, what kind of retirement spending would accurately reflect the average, middle-class American? Again, I dug into the numbers. Indeed, based upon data in the study I used, I believe that the average American’s retirement spending may be more austere than many would prefer. Instead, I needed to focus on what the average American would spend in retirement.Īfter I created that blog post and corresponding video, many people commented that this kind of retirement spending wasn’t nearly high enough. While it was one of my more popular videos, many people let me know that $10,000 per month was way too much. Stick around to find out the answer will surprise you.Ī few months ago, I created a blog post and corresponding video that detailed how much you’d need to save to support $10,000 per month in retirement living expenses. ![]() Upper-Middle Matt, however, earns twice as much.ĭoes that mean that Upper-Middle Matt will be able to retire first? What’s the biggest difference between them? Median Mark earns the median income for his age group: $74,270 a year. Each is 55 years old and wants to retire in ten years. ![]() Let’s call them Median Mark and Upper-Middle Matt. It may be a bit surprising that even earning $232,000 - what some might consider upper class earnings - you'd still be considered middle class in the Bay Area.Let me tell you a story about two middle-class Americans planning for retirement. San Francisco, Oakland, Berkeley Low-End Middle Class Income San Diego, Chula Vista, Carlsbad Low-End Middle Class Income Riverside, San Bernardino, Ontario Low-End Middle Class Income With high demand and low supply for housing, rent or mortgages in these SoCal metros would quickly eat up the low-end middle class income amount. Here's what you'd have to make in several California cities to be considered "middle class." Los Angeles, Long Beach, Anaheimįor these LA and Orange county cities, it's not entirely surprising that you'd fall within middle class range earning these amounts, if you could survive on $55,000. But there are lots of factors to take into account in each city, as there are drastic cost of living fluctuations throughout such a large nation like the U.S.ĬNBC looked at 20 metro locations across the U.S. If you earn between $47,189 and up to $141,568 in America, you are considered middle class. There are many arguable definitions to what "middle class" constitutes, but according to Pew, it's defined as as those earning between two-thirds and twice the median American household income, which in 2021 was $70,784, according to the United States Census Bureau. Get Southern California news, weather forecasts and entertainment stories to your inbox.
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