A new study conducted by Ameriprise Financial shows that even when Americans have stashed sizable sums of money into their investment accounts, they still might not see themselves as wealthy.
The financial group surveyed hundreds of Americans with $1 million or more in assets and found some surprising results, including that 31% say they are "middle class." That may come as a shock to many Americans who have assets worth far less than that. Among the group of millionaires, 60% say they are "upper middle class," and just 8% consider themselves "wealthy."
Why is there a difference in how the respondents defined their personal finances? It may be because everyone has a different perspective on what they think wealth is. The survey showed that most investors (85%) define wealth as financial security. Others thought wealth was being able to provide for themselves and their family, while some said it was the "freedom to do what I want."
Definitions of the middle class vary
You might excuse the surveyed millionaires for not knowing whether they're middle class, partly because there are many different ways to define it.
For example, the Pew Research Center says someone is middle class if they have an annual household income that is two-thirds to double the national median income. The national median household income was $74,580 in 2022, which means a middle-class household earns between $49,720 and $149,160 under this definition.
However, the Brookings Institute says there are three separate definitions of the middle class, and it doesn't even require a household to earn a specific income. Instead, it says the term can refer to a person's professional credentials, their culture, or the amount of money they have.
How millionaires recommend building wealth
No matter how you define being middle class, there are some practical lessons all of us can take from those who've accumulated substantial wealth. The Ameriprise survey respondents mentioned three top factors that helped them accumulate more than $1 million.
- Financial planning and investing: 80% of respondents said this was the most important driver to building wealth. Thankfully, you don't have to be an investing wiz to do well financially. Owning low-cost index funds in an investment account can help you build wealth over time.
- Earning a good income: 71% of respondents cited this as a key driver of their wealth. But finding a few ways to boost your income can go a long way to helping you achieve your financial goals as well. Gig workers earn an average of $5,700 annually, and many of these jobs can be done in addition to your day job.
- Living within your means: 69% said living within their means contributed to their financial success. The high cost of living has made this suggestion difficult for many Americans, but it's a good reminder to keep tabs on your purchases. Debt payoff apps can be an excellent way to get your finances back on track if you need help.
You don't have to accumulate $1 million to be on the right financial track; for some people, that might not be the best goal. Instead, think of one financial goal you want to achieve. It could be stashing $1,000 in your savings account, putting money aside for buying a home, or paying off your credit card balance. It all starts with setting a goal and creating a financial plan to get there.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
FAQs
31% of millionaires say they're part of the middle class, survey finds. 'People feel squeezed,' advisor explains. Only a small share of millionaires say they feel wealthy, according to a recent report. Persistent inflation has taken a toll on most Americans' financial security, making it harder to feel well off.
Do 31% of millionaires say they are middle class? ›
Recent data from Ameriprise finds that 60% of people with $1 million or more classify themselves as upper middle class, while 31% of folks in that boat simply say they're middle class. Only 8% percent of Americans with $1 million or more call themselves wealthy.
Do millionaires consider themselves middle class? ›
According to research from Ameriprise Financial, 91% of U.S. millionaires don't classify themselves as upper-class rich. The study also found that 60% and 31% of investors with $1 million or more surveyed consider themselves as “upper middle class” and “part of the middle class,” respectively.
What net worth is considered upper middle class? ›
Some sources define the upper middle class as anyone making a lot of money but haven't crossed the threshold to become truly wealthy. These individuals often have a net worth of at least $500,000 to $2 million.
What percentage of Americans have a net worth of over $1000000? ›
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
Is $150,000 a year middle class? ›
There are three U.S. cities where people making a $150,000 income qualify as lower middle class and two of them are in California, according to recent research from GOBankingRates.
What income is no longer middle class? ›
Middle-class income currently ranges from a little under $40,000 to a little over $119,000. The definition of middle class extends beyond income to factors like education, location and marital status.
What social class is a millionaire? ›
Most people with $1 million or more in assets consider themselves upper middle or middle class. Millionaires say financial planning and investing is the best way to build wealth.
What income is actually middle class? ›
But data from the U.S. Census Bureau cites a different number as the average salary: just under $75,000. What does this all mean? By the Census data, it means that if you earn between $50,000 and $150,000 a year, you are considered middle class.
At what level are you considered rich? ›
Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
Per the Federal Reserve about 6% of households have over $2,000,000 in wealth in 2020. Several good answers already posted.
What are the 5 income classes? ›
Where you rank by income
- Lower class: less than or equal to $30,000.
- Lower-middle class: $30,001 – $58,020.
- Middle class: $58,021 – $94,000.
- Upper-middle class: $94,001 – $153,000.
- Upper class: greater than $153,000.
Americans say they would need to earn $483,000, on average, to feel rich or achieve financial freedom, according to a recent Bankrate survey. That's over eight times the national median income of about $57,200, according to Labor Department data.
How many people have $3,000,000 in savings in usa? ›
1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.
What is the average age to reach $1 million? ›
The average age of millionaires is 57, indicating that, for most people, it takes three or four decades of hard work to accumulate substantial wealth.
At what age should you have $1 million dollars? ›
Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.
What percentage of middle class are millionaires? ›
60% of those millionaires identify as upper middle class, while 31% interestingly identify themselves as just middle class. Surprisingly, a large number of millionaires reside comfortably in the middle class, revealing an oddly curious disconnect between their sense of self and their financial security.
What percentage of the population is considered middle class? ›
The middle class constitutes 50% of the U.S. population as of 2021, which is quite a bit smaller than it has been in nearly half a century.
What percentage of wealth does the middle class have? ›
The top 1% holds $38.7 trillion in wealth. That's more than the combined wealth of America's middle class, a group many economists define as the middle 60% of households by income. Those households hold about 26% of all wealth. Low-income Americans, representing the bottom 20% by income, own about 3% of the wealth.
