Here’s the Minimum Net Worth To Be Considered Upper Middle Class in Your 60s
Written by
John Csiszar
Edited by
Zuri Anderson
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American society is built around “keeping up with the Joneses,” and it naturally makes Americans curious about how their friends, neighbors and colleagues are doing financially. This is particularly true when it comes to retirement funding, particularly for people in their 60s.
At that age, most pre-retirees are wondering if they’ve amassed enough wealth to achieve upper middle class status, which is generally enough to lead a comfortable retirement. While there’s no official definition, data from the Federal Reserve, the U.S. Census Bureau and various financial services firms can provide a reasonable framework for what “upper middle class” really means.
Net Worth — Not Income — Defines Class in Retirement
Throughout your career, you likely used income as a way to define your economic class. After all, those with higher incomes are able to live a more luxurious lifestyle, while those with lower earnings are likely struggling to get by. However, by the time you retire, net worth is usually a far more meaningful figure.
This is because your net worth — your total assets minus your total liabilities — defines how long you can fund your retirement lifestyle. It also defines how much you need to rely on Social Security and how susceptible you are to unexpected financial emergencies, such as market volatility or healthcare costs like long-term care.
How To Define ‘Upper Middle Class’
The upper middle class is something of a nebulous concept, as there isn’t much direct data about where that dividing line begins and ends. But the range is bounded on the bottom by the middle class and on the top by the upper class. So, that’s a good place to start if you’re looking for the minimum net worth to be considered upper middle class.
According to the Federal Reserve’s most recent Survey of Consumer Finances:
- The median net worth for households aged 55-64 is $364,500
- For households aged 65 to 74, it rises slightly to $409,900
These figures help define the true middle class in America, at least in terms of net worth. For the upper class boundary, U.S. Census Bureau data shows that the entry level starts at about $1.8 million.
Taking all of this data as a whole, here’s where the American upper middle class falls:
- Net worth of $350,000 to $1 million: Middle class
- Net worth of $1 million to $1.8 million: Upper middle class
- Net worth of over $1.8 million: Upper class
These ranges are necessarily broad, as where people live and which type of lifestyle they choose can dramatically affect how long their money will last. But in a general sense, these averages give a good indication of where class divides begin and end.
What Are the Financial and Economic Ramifications of Being Upper Middle Class?
Crossing the $1 million threshold is more than a token milestone. For most households, some or all of these financial effects occur:
- Social Security becomes less important in terms of being a primary source of income
- Budgets expand to include more room for hobbies, travel, family assistance, or other discretionary expenses
- Greater capacity to withstand financial emergencies or unexpected expenses
- Ability to generate sizable income through investments
In other words, once you have a net worth of at least $1 million — at the lower boundary of upper middle class — you likely have much less financial stress. While every household is different, the average upper middle class household headed by someone in their 60s is likely ready for a successful and prosperous retirement, given good financial management skills.
The Bottom Line
There’s no widely accepted definition of what it means to be upper middle class in your 60s. But using data for middle-class and upper-class households is a good way to derive an estimate.
Once you reach upper middle class status, you can likely enjoy a secure retirement that’s flexible enough to give you options as to how you want to spend your money. But having a sustainable retirement withdrawal plan and drafting a good budget are still important steps to make sure you don’t outlive your money.
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