Do You Think You’re Middle Class?
The political class seems to think that a household income of $250,000 per year is middle class. What do you think?
Even a rudimentary familiarity with the realities of incomes in the U.S. would recognize that household earnings in that area are near the top of the range. The most recent Census Bureau data showed that the median U.S. household income is approximately $54,000. At $250,000 of annual income you are in the top 5%.
Most political discussions of household incomes tend to focus on inequality and tax policy. These are serious issues, even if some of the discourse and proposals seem to be removed from reality. Efforts to resolve any of these issues could have a material impact on investment opportunities. An additional complication; nearly 90% of us think we are middle class.
Investors would be well served by being generally cognizant of the realities of their personal financial situation in the context of the larger picture. Knowing where you stand can be helpful in developing personal strategies in the areas of savings, investments, and retirement and estate planning.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®