8 Key Signs You’ve Made It to the Upper Middle Class

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There’s a distinction between the lower, middle and upper classes, but did you know that there’s also a category in between the latter two called the “upper middle” class? While those in the middle class are often considered fairly financially stable, the upper middle class tend to have a higher net worth and even more financial security — just perhaps not quite as much as the truly wealthy.

As you start improving your income and building your net worth, you may be wondering just when you’ve gone from the middle to upper middle class. While there’s no one-size-fits-all definition, and monetary amounts tend to vary, there are certain signs that you’ve made the jump. Here’s what the upper middle class is, and the top signs that you’re there.

Upper Middle Class Defined

People in the middle class and the upper middle class may both benefit from a higher standard of living, less financial stress, and more financial freedom or stability. However, there are some differences between the two tiers.

Here’s how Nicole Nicolet, owner of Let’s Make Life Great, defined the two categories.

“The middle class can be defined as anyone who is able to afford a reasonable standard of living, including owning a home, going on yearly or bi-yearly vacations, and being able to support future investments like part of a college education for their children. In most cases, they will have to work up to the expected retirement age. The upper middle class is able to afford a little above the standard of living of the middle class.”

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The upper middle class often gets to enjoy more vacations, has minimal to no debt, and is on track to retire — and live comfortably once retired — without issue.

“Middle class typically involves stable income and some savings, with incomes between $50,000 and $125,000, according to the U.S. Census Bureau. Upper middle class might mean earning 15-50% above the median with a comfortable financial cushion, while the upper class generally refers to the top 1-3% earners with substantial wealth and investment-derived income,” said Jeff Rose, CFP and founder of GoodFinancialCents.com.

Some sources define upper middle class as anyone who’s making a lot of money but hasn’t quite crossed the threshold to become truly wealthy yet. These individuals often have a net worth of at least $500,000 to $2 million.

Key Signs You’re in the Upper Middle Class

In addition to having a high income and net worth, here are eight other key signs that you’ve made it to the upper middle class.

You Have Extra Money After Investments and Expenses

People in the middle class often have disposable income, but those in the upper middle class have money left over even after they’ve maxed out their retirement account contributions and taken care of their other major investments and expenses. They also have far less concern or stress about using said money since they’re more financially secure.

“Cracking into the upper middle class? You’ll probably notice a few key things,” said Rose. “First off, you’ve got some wiggle room in your budget for the fun stuff — think vacations and regular nights out. You’re not just socking money away for retirement, but you’ve got a mix of investments like stocks or maybe even a rental property.”

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You Own a Mix of Assets

When you’re in the upper middle class, you have more than just cash at your disposal. You also have a diversified portfolio with assets such as stocks and rental properties that can boost your income and enhance your financial security. Even if your total net worth is distributed across multiple assets, it still adds up to a significant amount.

You may also have fully paid off your mortgage, though this isn’t necessarily required. “One sign that you are in the upper middle class may include being able to pay off big investments, like a mortgage, years early, without restricting your lifestyle,” said Nicolet.

If you do have a mortgage, it’s one that you’re very comfortable with and isn’t dragging you down financially.

You Live in a More Expensive Neighborhood

Another way to see if you’ve made it to upper middle class is to simply take a look at where you live. According to Rose, if “your home is in a ZIP code where folks want to live,” that’s a good sign that you’re there.

Keep in mind that it’s not all about appearances. People in the middle class might try to keep up with the Joneses — that is, they might compare themselves with their neighbors and try to match their level of wealth or status. Those in the upper middle class, however, do not. They don’t need to worry about whether their house is big enough or their car is luxurious enough. They can afford many of these high-end things without needing to stretch their financial means.

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You Have Minimal Financial Stress

One of the biggest indicators that you’ve made it to the upper middle class is if you have little to no stress when faced with an unexpected bill or expense. If a financial emergency does come up, you also know that you can cover it without a problem.

“If an unexpected bill popped up, you could cover it without panicking,” said Rose.

You’ve Experienced Positive Lifestyle Changes

Having significantly more disposable income and a higher net worth often comes with major lifestyle changes. This doesn’t mean you’re suddenly living above your means. Rather, it means you can afford more than you ever could before, including goods and services that you used to view as being a luxury or out of reach. It also means you can afford things like medical expenses, travel, and more expensive hobbies or interests.

“Being in the upper class means almost no restrictions on lifestyle. Not billionaire rich, but certainly without any limitations to enjoy most standards of living,” said Nicolet. “Additionally, being in the upper middle class means that you are able to easily afford more leisure purchases like recreational vehicles, sporty cars, and maybe even a small vacation home in popular vacation spots.”

This is similar to what you might experience in the upper class, but perhaps a tier lower.

“If you are in the upper class, then you will be able to afford essentially any purchase you want, without ever having to choose a payment plan or worry about future financial deficits,” added Nicolet. “The upper class is an interest-free, and interesting life.”

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You Can Afford Higher Education

The cost of higher education is high, and many people who go to college or university end up with student loan debt. Those in the upper middle class, meanwhile, can afford to attend college — or send their children to college — without having to take on this debt.

“You can swing the better educational opportunities for your kids (or yourself!) without sweating over the price tag,” said Rose. “These are all little financial wins that hint you’re sitting pretty in the upper middle class.”

You Can Retire Early

Retiring early is the dream for many people, but it might not feel that achievable if you’re struggling with debt or everyday expenses. For the upper middle class, this isn’t as much of an issue due to factors like diversified investments, passive income, and overall financial security.

“In most cases, being in the upper middle class also signifies that you can retire early, without much concern for financial troubles down the road,” said Nicolet.

You Have Multiple Income Streams

While those in the lower and middle classes may only have one source of income, wealthier individuals almost always have two or more income streams. This could include a high-paying job. But it could also include owning a business or having a passive income source like dividends from investments or rental property income.

Bottom Line

By no means is this a comprehensive list of signs that you’ve made it to the upper middle class. Everyone’s situation is different, and definitions of class vary broadly. What one person might consider as upper middle class could be a tier higher or lower than another’s definition of it.

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What matters is determining where you’re at right now financially, and where you want to be. If there are still things that stress you out financially, you might still have a ways to go. But if you’re living comfortably and enjoying the lifestyle of your dreams, chances are you’re already where you want to be.

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