Retirees – primarily early baby boomers and members of the “Greatest Generation” – are more likely to define the middle class in terms of income, not lifestyle, according to new research from Millionaire Corner.
How much income does it take to be middle class? Forty percent of retirees say it takes a minimum of $50,000 a year, while 36 percent say its takes $70,000 a year, according to the results of a survey of more than 900 investors conducted by Millionaire Corner in March. About 12 percent says a household needs a minimum annual income of $40,000 a year to be middle class and another 12 percent says a middle class household needs at least $100,000 a year.
A large majority of retirees view home ownership is a significant criterion for defining a middle class household, and nearly 70 percent define a middle class family as owning their primary residence. Two-thirds of retirees view the ability to pay for college as a meaningful way to describe a middle class family, but they are evenly divided over what that actually means. One-third of retirees say a middle class household can pay for college without any financial assistance, while another third says a middle class family needs financial aid to send a child to college.
Retirees are much less likely to define the middle class in terms of other lifestyle factors, such as the number of cars owned by a household, or the number of vacations taken each year, according to our research. More than 48 percent says a middle class family owns more than one car, but just over 47 percent say car ownership is not an important factor.
Just over one-third of retirees say that a middle class family has more than one income, but more than 55 percent of retirees say the number of income earners in a family is not an important definition of what constitutes a middle class household.
Forty-four percent of retirees say a middle class family takes two or more vacations a year, but more than 42 percent say vacation activity is not a significant definition of the middle class. Retirees think it’s even less significant whether a family flies or drives to its vacation spot. Close to 70 percent say mode of travel is not an important way to describe the middle class.
An upper middle class or wealthy lifestyle requires at least $250,000 a year, according to more than 34 percent of retirees, while about 32 percent say a wealthy family needs at least $500,000 a year and about 22 percent say it takes at least $1 million in annual income. Close to 10 percent of retirees say it takes $2 million or more a year in income to rise above the middle class.