Middle, Upper Middle Class Distinction for Retirees

[Souschef]

Quote:

Originally Posted by ShokWaveRider this I was just trying to establish what Net worth would be needed to enjoy a "reasonable" standard of living based on one's individual requirements. The "class" label was used merely as a example in this case.

You cannot go by "Net Worth" alone. You also have to consider pensions and SS. Ours are enough to sustain our lifestyle, without touching the principal, for the most part.
If we did not have those, we would obviously need a much higher NW, using the 4% rule.

[OldShooter]

We don't measure ourselves against others. The first paragraph of John Bogel's book "Enough" really says it all:

At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch 22 over its whole history. Heller responds, “Yes, but I have something he will never have . . . Enough.”

We have enough. From that comes peace of mind.

[iloveyoga]

I also think one aspect of "class" is knowing how to act in a variety of different situations and this seems to have little to do with income or net worth.

[Joylush]

Quote:

Originally Posted by Ready I never cared about reaching a "class" level, but my goal was always to get to the point where I just didn't have to worry about whether I had enough money to live my desired lifestyle. So I would just classify everyone in one of two categories - those who still worry about whether they have enough, and those who don't.

That's a good way to look at things. It sounded to me like the OP is just trying to get a feel for which side they're on or what it would take to get to where they wanted to be.

[socca]

IMO, it's better to address this question by looking at real estate. The subdivisions in my area were obviously constructed with various socioeconomic classes in mind. You can slap whatever labels you want on these classes, but this may create misunderstanding when talking to others. For example, in my mind to qualify as solidly middle class a single family standalone home needs at least 1600 sq ft, 3 BR, 2 BA, 2 car garage, and a 1/4 acre lot. Other folks may disagree with my standard. Ok - whatever.

[ShokWaveRider]

Quote:

Originally Posted by Ready If you want to have some fun, try looking on realtor.com at what $400-$600K gets you in Orange County, CA. You would not want to live in one of those neighborhoods, unless you were willing to go with a one bedroom condo.

We used to live in MV, 13 years ago, sold at the peak and we owned our own home then. Similar homes now sell for $1.5m. So I hear you.

[Midpack]

I’m also in the who cares camp. I’ve always preferred to be underestimated, and I continue to strive for same. The Millionaire Next Door just reinforced my views. I know where we stand, that’s all I care about. If strangers think I’m no one special, all the better...

[W2R]

Quote:

Originally Posted by ShokWaveRider I was just trying to establish what Net worth would be needed to enjoy a "reasonable" standard of living based on one's individual requirements.

I guess I define what is a reasonable standard of living, independent of class structure.

To me and many others, class is based on a lot more than net worth or income; it also implies such elusive qualities as values, behaviors, education, and so on. If one defines class in this way, an upper class person in "difficult circumstances" might actually have a lower than average income and net worth. A lower class person who won the lottery might become nouveau riche rather than upper class.

So, leaving the discussion of class behind and getting back to income and net worth..... Here's what I think:

I already know that with my present income and net worth, I can afford what I feel is reasonable, here where I live. So, I immediately know that I can afford to live in areas with the same or lesser cost of living, but would have to think harder about areas with a greater COL if I wanted to move there. Personally I'm not willing to accept a lesser lifestyle anywhere, although some people might exchange a lesser lifestyle for location.

Try looking at websites like City Data , that will give you the median income and median home price for the region you have in mind. You can compare your own home price and income with others using this information. Another helpful website for comparing cost of living and determining how much you would need to live a similar lifestyle elsewhere, would be Sperling's Best Places.

[FANOFJESUS]

Quote:

Originally Posted by Ready If you want to have some fun, try looking on realtor.com at what $400-$600K gets you in Orange County, CA. You would not want to live in one of those neighborhoods, unless you were willing to go with a one bedroom condo.

Pricey out there.

[Mulligan]

I just received an after tax $100 a month COLA last month and was notified yesterday, I am getting $200 additional monthly after tax from the recent tax cut. Since an additional $300 a month income gets me very excited, this clearly at the very best slots me no higher than middle middle class at best.

[exnavynuke]

If I have $100M and spend $30k/year, I'm not living an "upper middle class" lifestyle. If I have $500k and spend $100k/year, I'm probably living an "upper middle class" lifestyle.


What you are spending, imo, is a lot more important/telling than what you have to spend.

[ER Eddie]

Quote:

Originally Posted by FIREd_2015 I googled and found this: Near Affluent $100k - $249k Investable Assets Lower Mass Affluent ($250k - $499k) Investable Assets Upper Mass Affluent: $500k - $999k Investable Assets

Those sound more like medical conditions than class distinctions. "Doctor, I have lower mass affluence. Please help me."

[Koogie]

I have aspirations of joining a different class.

The not Working Class.

[Lawrence of Suburbia]

Geography matters. I'm "Upper Mass Affluent"(!), which surprised me; but if I were to move to Marin County, I'd soon be living in my car.

[omni550]

Quote:

Originally Posted by ShokWaveRider The reason I brought this up is purely from a retirees quality of life perspective. It is hard to have such discussions with folk who do not enjoy the same standard of living as that of their more affluent friends. I used "class" purely as it was used in most all of the articles I read today to differentiate between net worth levels. Where am I going with this? Well in our area/general neighborhood, you need about $400-$600k to "buy" a home in a nice well run lower crime neighborhood within walking distance of the beach. The COL would require you to have about $45k pa. after tax to support a decent lifestyle. there are also multi $m homes too, but you can get a nice comfortable retirement location for the above. We consider ourselves to have an above average standard of living (for Florida). Across the River, the homes go down to $200 - $350k. The crime is a little higher not much to note, is 10 - 15 - 20 miles from the beach, and the communities are a lot more varied. some homes are scruffier than others and there is not as much incentive to keep your lawn mown and home well maintained. Please do not get me wrong here, they at NOT bad areas, they are just not what we would consider for our own personal optimum retirement locations. They have more commercial activity very near the residential areas and as such have a lot more traffic. Our personal preference is to live in our preferred location, and not be forever looking where the grass is greener. In order to afford such, ones net worth needs to be within the general classification of "Upper Middle Class", based on the data I reviewed.

I feel most comfortable living in neighborhoods where I don't feel too out-of-place. For me, it's less a function of people's NW, but more how they live their lives.

When assessing possible locations for my snowbird winter home, some nearby areas just felt bit "too rich for my blood" based on my personal observations. I still avail myself of the amenities, cultural offerings, etc. in those areas, I simply chose not to live there.

omni

[Lawrence of Suburbia]

Quote:

Originally Posted by ER Eddie Those sound more like medical conditions than class distinctions. "Doctor, I have lower mass affluence. Please help me."

Easily treatable with bran cereal, followed by hot coffee.

[Another Reader]

As near as I can tell from Google, one graduates from Upper Mass Affluent to High Net Worth, which somehow is associated with "Individual," at $1,000,000. Per Investopedia, one progresses from HNWI to "very HNWI" at $5,000,000 and "ultra HNWI" at $30,000,000.

These labels are created by and for banks and investment houses that have products and services to sell. They help target the customer.

ETA: For the OP's purpose, I think a paid for $500k house in the preferred neighborhood and $100k a year would allow the average person/couple to live well. No state income tax helps in Florida, although I understand other taxes are fairly high. How you put that income together will vary with your resources. Work down from there, estimating taxes, to figure out the minimum income you need to live reasonably well and not be worried about money.

[daylatedollarshort]

You can look to see where you are at on the Consumer Expenditure Tables, which also lists income:

https://www.bls.gov/cex/tables.htm

Neighborhoods in places like LA and SF can be pretty strange. We have original owner, elderly neighbors who bought their homes under $50K years ago and the homes are now falling into disrepair at one end of the income scale and at the other end lots of nice young yuppie couples with toddlers, babies, stock options, au pairs and luxury cars moving in for the schools, yoga studios, craft breweries and upscale markets. The latter are people who apparently don't mind paying $4 for a confetti colored eggplant instead of buying regular eggplants 2 for $1 at the discount grocers like I do, but they are helping raise our home price so we're happy to have them around.

[Gumby]

The young wife says I have no class.

[gerntz]

Quote:

Originally Posted by Lawrence of Suburbia Geography matters. I'm "Upper Mass Affluent"(!), which surprised me; but if I were to move to Marin County, I'd soon be living in my car.

I disagree. That some choose to spend it largely on living location & others don't doesn't change the affluence level.