7 Key Signs You’ve Made It to the Middle Class
Written by
Sean Bryant
Edited by
Caitlyn Moorhead
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Have you started feeling that sense of financial stability that was once a distant dream? Maybe you don’t have to stress as much about bills or living paycheck to paycheck. You can enjoy little luxuries or finally take that long-desired vacation without worrying constantly about money. If this sounds familiar, you may have finally reached the middle class.
While the definition is fluid, for many the middle class represents that elusive yet comforting feeling of finally having “made it” financially. According to a 2021 report from Pew Research Center, 50% of Americans would be considered part of the middle class. This is down from 61% in 1971. While the percentage of middle class Americans has been decreasing, the median income of these individuals has also been increasing slower than that of those classified as upper class.
Even though there is no set definition for what makes someone part of the middle class, certain benchmarks help define what they might look like. Below, we will explore seven key signs indicating you’ve climbed the economic ladder and settled comfortably into the middle class.
1. Home Ownership
For decades, home ownership has been the American dream for many people. Being able to go from renting your home to owning it yourself is considered by many to be a great achievement. However, this goal has become harder to achieve in recent years. With home prices in certain parts of the country rising faster than incomes, it’s become extremely difficult to become a first-time home buyer.
2. The Ability To Build a Retirement Plan
Retirement is something that most people want to achieve at some point in their lives. Doing this requires saving a significant amount of money during your working years to live comfortably. Unfortunately, most lower-income individuals do not have the ability to save for retirement because most of their income is used to cover basic living expenses. When you get to a point when you have the disposable income to put toward your retirement, it could be a sign you’ve made it into the middle class.
3. Quality Healthcare Coverage
Affordable healthcare coverage has become more accessible through the Affordable Care Act. Subsidies from the United States government have made it possible for more Americans than ever to have health insurance. Unfortunately, a lot of these plans have high deductibles and out-of-pocket maximums.
However, those with steady jobs tend to have access to employer-sponsored healthcare plans, which are not only affordable but also tend to be of higher quality. With lower deductibles and out-of-pocket costs, any healthcare emergency is less likely to strain these individuals financially.
4. You Have To File a Tax Return
Tax season creates a lot of anxiety for many people. However, needing to file a tax return isn’t necessarily a bad thing. It means you’ve earned enough income during the year that the Internal Revenue Service (IRS) feels it’s necessary for you to document your earnings. It also means you potentially had enough income that you’ve been able to invest throughout the year and had a reasonable number of expenses.
5. Your Kids Have a College Education Fund
One priority for many middle-class families is to make sure their kids are set up for their future. Part of this means they can go to college so they can have the best opportunity to find a high-paying job. Having the ability to start a college fund to pay for part or all of your child’s college education is a significant sign you’re part of the middle class.
6. You Own a Car
Owning your car means you no longer need to deal with long, crowded commutes to work with public transportation, especially in locations where this isn’t a common form of commuting. Owning your car means you have the funds and credit score to afford the monthly payments that owning a car requires.
7. You Can Take Family Vacations
Being able to take a family vacation means you have the disposable income necessary to take time off work without feeling a financial strain. Middle-class families tend to stay at modest accommodations instead of the more expensive luxury hotels and resorts that upper-class families might enjoy.
The Bottom Line
While there are no set standards to declare someone to be middle class, those who own their own home, have started contributing money into a retirement account, have quality healthcare coverage, file a tax return each year, have started saving for their child’s college education, own their car and can take family vacations would be thought to have reached middle-class status.
More From GOBankingRates
