What Class Do You Actually Belong To? The Income Breakdown Might Shock You
Written by
Jamie Stone
Edited by
Rebekah Evans
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
When it comes to your personal finances, you might think you know exactly where you stand on the economic ladder, but the reality of American income classes might surprise you. Whether you consider yourself middle class, upper-middle class or somewhere else entirely, the actual numbers behind these classifications could completely shift your perspective on your financial standing.
Also here’s how much you need to earn to be “rich” in every state.
The Foundation: America’s Median Household Income
Before diving into class definitions, let’s establish the baseline. According to the U.S. Census Bureau, the median household income in America was $80,610 in 2023, representing a 4.0% increase from 2022. This figure serves as the crucial reference point for determining income classes across the country.
But here’s where it gets interesting: this national average doesn’t tell the whole story. Your actual class status depends heavily on where you live, your household size and local cost-of-living factors that can dramatically shift these thresholds.
The Lower-Income Class: More Americans Than You Think
According to Pew Research Center, lower-income households are defined as those earning less than $56,600 annually for a three-person household. However, this figure is adjusted for metropolitan cost of living and expressed in 2022 dollars.
The shocking reality? A significant portion of Americans fall into this category, even those who might consider themselves middle class. Census data showed that just over 50% of Americans had an annual household income of less than $75,000 in 2023.
The True Middle Class: A Narrower Band Than Expected
The middle class isn’t as expansive as many Americans believe. Pew Research defines middle-income households as those earning between two-thirds and double the median income. For a three-person household, this translates to annual incomes between $56,600 and $169,800.
However, data from DQYDJ suggested that in 2024, middle class encompasses household income from $40,010 to $160,040, using the range from half of median household income to twice the median.
Interestingly, Visual Capitalist reported that the largest share of American households (17%) fall in the $100,000-$150,000 annual salary range, followed by the $50,000-$75,000 category (15.7%).
The Upper-Middle Class: The Sweet Spot Many Aspire To
Upper-middle-class definitions vary, but most sources agree on a general range. A GOBankingRates article shows an income of $106,000 to $150,000 typically lands you in the upper-middle class based on national averages. However, another analysis by New Trader U suggested the range extends from $150,000 to $250,000 annually.
The key factor? Location matters enormously. In California, for example, the threshold jumps to $159,302 due to higher living costs.
The Upper Class: Where the Real Wealth Begins
Upper-income households, according to Pew Research, are those earning more than $169,800 annually for a three-person household. However, true upper-class status often requires significantly more.
GOBankingRates reported that the median household income required to be considered part of the upper class is approximately $156,600 in 2024.
State-by-State Variations: Location Changes Everything
The income required to maintain class status varies dramatically by state. Visual Capitalist’s 2025 analysis showed striking differences:
- Massachusetts: $67,000 to $200,000 for middle class
- High-cost states: Often require 50% to 100% more income for the same class status
- Lower-cost states: May require significantly less
SmartAsset’s data reveals that middle-class income in big cities ranges from $49,478 to $71,359, based on a median household income of $74,225 across 100 of the largest cities.
The Reality Check: Why Your Perception Might Be Wrong
Many Americans misidentify their income class for several reasons below.
Lifestyle Inflation
As incomes rise, so do expenses, making higher earners feel financially stretched despite their actual class status.
Social Comparison
Your peer group heavily influences perception. If you’re surrounded by high earners, a $100,000 salary might feel modest.
Regional Differences
A $150,000 salary in San Francisco feels very different from the same amount in Birmingham, Alabama.
Benefits and Total Compensation
Many people focus only on salary, ignoring health insurance, retirement contributions and other benefits that affect actual economic class.
The Surprising Truth About Income Distribution
Here are some eye-opening facts that might change your perspective:
- The median isn’t the middle: While $80,610 is the median household income, the actual middle-class range is much narrower than most people think.
- Upper-middle class is exclusive: Only about 15% to 20% of American households truly qualify as upper-middle class.
- Geographic arbitrage is real: Moving from a high cost to low-cost area can effectively change your income class overnight.
- Household size matters: Pew Research noted that a household with more than three people needs significantly more income to maintain middle-class status.
How To Determine Your Actual Class
To accurately assess your income class:
- Use your gross household income: Include all earners in your household.
- Consider your location: Use cost-of-living adjusted figures.
- Account for household size: Larger families need more income for the same class status.
- Look at total compensation: Include benefits, not just salary.
U.S. News provided guidelines suggesting that middle-income Americans have annual incomes between $41,392 and $124,176 in 2025, before adjusting for local cost of living and household size.
Class Is More Complex Than You Think
Your income class isn’t just about the number on your paycheck. It’s a complex calculation involving location, household size, cost of living and total compensation. Many Americans who consider themselves middle class might actually be lower-income when properly adjusted for their circumstances, while others might be surprised to learn they’ve achieved upper-middle-class status.
The key takeaway? Don’t assume you know your class based on salary alone. The actual thresholds might shock you and understanding where you truly stand can help you make better financial decisions and set more realistic goals for your economic future.
Whether you’re climbing the ladder or maintaining your current position, knowing your actual class status provides valuable context for financial planning, career decisions and lifestyle choices. The numbers don’t lie, but they might surprise you.
More From GOBankingRates
