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When it comes to upper-middle-class finances in your 50s, it’s more about financial metrics like net worth, especially as you start thinking about retirement.
What does an upper-middle class net worth really look like at age 52?
Let’s take a look using some benchmarks from sources like the Federal Reserve, Pew Research, and Fidelity. Also, what to do if your numbers aren’t where you want them to be.
Using Income as an Initial Benchmark
Income is widely used to define who is middle class. Using research from the Pew Research Center, households in the US that earn more than twice the median income are viewed as high income, or defined by many as upper-middle class.
Looking at the latest average income data will help translate that definition into a dollar figure. The US Census Bureau says the median household income in the US is $83,730.
To translate this into a dollar figure, we need the latest average income data. According to the latest data from the US Census Bureau, the median US household income is $83,730. From here, being considered upper-middle class means your family earns approximately $167,460 per year.
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Of course, this doesn’t necessarily adjust for other factors such as household size and what you might earn in higher or lower cost areas. But it provides a good starting point.
What about net worth?
When it comes to financial security, your income alone doesn’t paint the whole picture. You can use your assets as another benchmark as part of your net worth. Many experts turn to age-based metrics for this, and one of the most widely cited metrics comes from Fidelity.
Financial institution guidelines suggest saving six times your income by age 50 and about eight times by age 60. Since age 52 falls between these two decades, let’s say you should save about 6.4 times your salary
Using the income example above, your net worth to be considered upper-middle class is approximately $1,071,744.
Fidelity’s benchmark focuses on saving for retirement, not your overall net worth. You’ll also want to take into account your other assets and liabilities, such as ongoing debt and cash. Still, having a larger share in retirement savings is likely to help build net worth for upper-middle-class Americans.
Is your net worth not what you want?
If you’re looking at a seven-figure net worth and feeling overwhelmed, don’t feel like you’re holding back. That’s just a benchmark. Instead, focus on actions you can take to grow your wealth.
For example, make it a priority to contribute more if you can. Most types of retirement accounts such as IRAs and 401(k)s allow catch-up contributions after age 50. You can also work on paying off debt so you can use the money for savings that you would have used for debt.
Ultimately, the amount or net worth that is aimed for does not necessarily have to be the same as that of someone in the upper-middle class range. Instead, look at your personal situation and work toward financial goals that work for your needs.
