Use This Calculator to Find Out If You Are Truly Middle Class
The term “middle class” gets thrown around all the time, especially during election years , but what does it really mean? And more importantly, are you part of it? While definitions may vary, being middle class is closely tied to the idea of the “American Dream,” the idea that with hard work and smart financial management, you can afford a home, raise a family, and ultimately enjoy a comfortable life. retirement. Emphasis on ” dream “.
In practice, determining who exactly belongs to the middle class is not easy. Location, family size and local cost of living all play a role. About half of U.S. adults (52%) lived in middle-income households in 2022, according to a Pew Research Center analysis of the latest available government data. And now you can use Pew’s updated calculator to see how you’re doing. Here’s how it works.
How does the income calculator work?
Pew’s analysis defines the middle class as households with incomes between two-thirds and twice the national median household income adjusted for family size. The calculator takes into account your location, family size, and pre-tax income to determine where you fit on the economic spectrum in your area.
Income is revised upward for below-average-sized households and downward for above-average-sized households. Thus, each household’s income becomes equivalent to that of a three-person household. (Three is the whole number closest to the average US household size , which was 2.5 people in 2023.)
By the way, Pew Research Center says it doesn’t store or share any information you enter—it’s just for your own curiosity. While this calculator is a useful guide, it is important to note its limitations. It does not take into account factors such as debt, assets or local cost of living, other than adjusting for household size. Your personal financial situation may be more complex than this simple calculation can provide.
What does this mean for you
Beyond pure curiosity, understanding where you fall on the economic spectrum can be valuable for several reasons. Knowing your economic status can help you set realistic financial goals and make informed decisions about saving, investing, and spending. In addition, many government policies and programs target the middle class. Understanding where you fall can help you anticipate how different policy proposals might affect you.
Zooming out, where you stand relative to others can provide context for broader economic trends and help you understand how changes in the economy may affect you personally . If you find that you are not where you want to be economically, this information can help you decide whether to change careers, pursue additional education, or move.
Remember, being middle class (or not) does not determine your worth or success. It is simply a tool for understanding your economic situation relative to other countries in your area. Many factors besides income contribute to financial well-being and life satisfaction.
Bottom line
Understanding your economic status can be a valuable tool for financial planning and decision-making. However, remember that “middle class” is a broad category, and your specific financial needs and goals may differ from others with the same income. Use this calculator as a starting point to understand your economic situation, but always consider your unique circumstances when making financial decisions.