What Income Puts You in the Upper, Middle & Lower Class?

Table of Contents

Introduction – Understanding Income Classes

Did you know that 50% of Americans believe they're in the middle class? But here’s the kicker: most of them are wrong. I’m going to break down all the income classes, based on the Federal Reserve’s Survey of Consumer Finances. I’ll cover income ranges, key characteristics, and practical strategies to help you move up to the next level. So let’s dive in.

Chapter 2: The Lower Class

Let’s start with the lower class. According to the Fed’s report, income distribution is divided into five brackets, from the bottom 20% to the top 20%. If your household income falls between $0 and $34,636, you’re in the lower class. For individual earners, the lower class is anything below $23,660.

What does life look like for people in this bracket? Honestly, it’s tough. If you’re in this range, there’s little room for savings or emergencies. Moving up is possible, but it won’t be easy. Let me share three strategies to help.

Aim for a 3 to 6-month emergency fund. This should cover your essential expenses like food, housing, and utilities. The reality is, 40% of Americans can’t afford a $400 emergency without borrowing. Just having a small emergency fund puts you ahead of most. Don’t worry if it’s not much at first—something is better than nothing.
Bills aren’t set in stone. Call your service providers, credit card companies, and utilities to renegotiate terms. In fact, 59% of Americans with medical debt have successfully negotiated lower bills. Start by cutting unnecessary subscriptions and focus on paying off high-interest debt using the Avalanche method. All the savings here should go towards padding your emergency fund.
It’s tough to get raises in low-wage jobs, so focus on improving your skills. Take Katherine Testament’s story, for example. She was earning around $250 every two weeks—barely enough to live on. But after dropping out of college, she enrolled in an apprenticeship, became an electrician, and now earns $70K a year with benefits. Alternatively, pick up side hustles like online tutoring or flipping items on Craigslist to boost your income.

Chapter 3: The Lower Middle Class

Next, let’s talk about the lower middle class. If your household income ranges from $34,636 to $59,500, you’re in this category. For single earners, the range is between $23,660 and $36,667. What’s life like for those in the lower middle class?

At this level, you have a bit more income to cover your bills, but you're still likely living paycheck to paycheck. Unexpected emergencies can still wreck you financially, but at least you can occasionally afford small luxuries, like modest road trips or eating out without breaking the bank.

Jobs here tend to be more stable with a few benefits. You might be working as an administrative assistant or retail manager. The key to moving up is optimizing every dollar you earn. Here’s how to break the paycheck-to-paycheck cycle:

Pick a budget and stick to it. I recommend the 50/30/20 rule:
50% of your income goes towards needs (housing, utilities, etc.).
30% goes towards wants (entertainment, dining out).
20% goes to savings and debt repayments.

If this seems too tight, that’s okay. Start small and gradually work towards those percentages.

Don’t just look for the cheapest item—consider how often you’ll use it. A $60 sweater that lasts 200 wears is a better deal than a $6 sweater that falls apart after two washes. Always calculate the cost per use to ensure you’re getting your money’s worth.
The less decision-making required in managing your finances, the better. Set up automatic transfers for savings, debt payments, and investments. This way, your money works for you, and you never forget to save.
A low credit score makes everything more expensive, from mortgages to car loans. Check your score on AnnualCreditReport.com and work on improving it. A better credit score can save you thousands in interest over the years.

The Middle Middle Class

Now we get to the middle middle class. If your household income is between $59,500 and $91,900, you’re in this group. For singles, the range is between $39,600 and $61,200. Life here is a bit more comfortable. You likely have some financial stability, with savings, investments, and maybe even a 401(k). You own a car, a home, or are working towards homeownership.

While you're not struggling, you're also not immune to financial stress. So, what traps do people in the middle middle class fall into? Let’s avoid them:

Aim to contribute at least 15% of your income to retirement accounts like your 401(k) or IRA. Don’t leave free money on the table. Many workers don’t take full advantage of their 401(k) match, missing out on thousands of dollars in potential free money each year.
The wealthiest households invest significantly more in stocks, private equity, and business ventures than those below them. Investing in assets is a key strategy for building wealth. If you’re not sure where to start, I’ve created a free 5-day investing course to help you get started. It’s free, and you can find it in the description below.
Who you surround yourself with affects your financial mindset. If your friends are always spending frivolously, that behavior will rub off on you. Build an inner circle of financially smart, ambitious people with similar goals.

The Upper Middle Class

Now, let's talk about the upper middle class. If your household income is between $91,900 and $153,100, you're here. For singles, the income range is $61,200 to $102,067. Life here feels much more secure. You likely own a home in a good neighborhood, drive a nice car, and send your kids to quality schools.

You also enjoy occasional luxuries, like flying economy plus or staying in nicer hotels. But there are still challenges. Taxes and larger investment decisions become more complex. So, how do you maximize your wealth at this stage? It all comes down to capital efficiency.

Taxes are likely your biggest liability at this income level. Maximize contributions to 401(k)s, IRAs, and HSAs. In 2025, you can contribute up to $23,000 to a 401(k), or $30,500 if you're over 50. If you have children, a 529 plan can shelter money for educational costs.
Networking becomes crucial here. Wealth opportunities don’t always come from job listings—they come from the right conversations and relationships. Start building a strategic network to unlock opportunities.
Many wealthy individuals own businesses that generate passive income. If you have the drive, consider starting a side hustle, launching a business, or investing in one. Owning assets that generate income is a powerful wealth-building strategy.

The Upper Class

Finally, we arrive at the upper class. According to the Fed’s report, you’re in the upper class if your household income is between $153,100 and $245,400. For singles, the range is between $102,667 and $163,600. But remember, the wealthiest 10% of Americans are not included in these statistics—they earn much more, often exceeding $500K a year.

What does life look like for those in the upper class? You’ve likely accumulated significant wealth from multiple sources: salary, investments, and passive income. You may own businesses, stocks, real estate, and other appreciating assets. You’ve probably reached a level of financial freedom where time is more valuable than money. You can afford to pay for convenience and luxury.

Building Wealth Beyond Income

It’s crucial to understand that net worth often matters more than income. For example, someone earning $1 million a year but spending $999,000 has a net worth lower than someone earning $70,000 but only spending $30,000. Building wealth is about more than just earning more—it’s about making smart decisions with what you have.

Invest early, invest smart, and grow your wealth over time. Even starting with as little as $1 per month at age 25 can lead to a $1.6 million portfolio by the time you’re 65, assuming a 10% annual return.