According to recent data, roughly 49% of Americans don’t actually fall into the middle-class income category. The true middle class is often defined as households with income ranging from two-thirds of the U.S. median income to double the median income. Based on government data for 2022, this range spans from $56,600 to $169,800.
As of 2023, only about 51% of American households fit into this category. The share of the American population that fits into the middle-class category has been shrinking over the past five decades. Approximately 61% of households were part of this cohort in 1971, a full 10 percentage point higher than the recent 51% rate.
During the same period, the proportion of U.S. households in the lower-income bracket grew from 27% to 30%, while those in the upper-income households increased from 11% to 19%. This trend reflects growing income inequality across the country. Many American families feel financially insecure.
Shrinking middle-class concerns
A recent survey found that 53% of U.S. adults believe they can’t make financial progress, and 48% say they are “constantly treading water financially.” For these respondents, an unexpected expense or loss of income could significantly set them back. If you and your family are in the middle-income category and worried about falling behind, there are ways to cement your position.
Reducing debt, especially consumer debt, can secure your financial standing. In 2024, there were 494,201 personal bankruptcy filings in the U.S. — over 60,000 more than the previous year. By lowering your debt burden, you may mitigate the risks of bankruptcy and reduce the monthly cost burden of servicing the debt.
Additionally, having an emergency fund that can cover your living expenses for at least six months can provide a financial buffer if you suddenly lose income. Finally, boosting your income through a side gig or passive income opportunities could help you reach or surpass the $169,800 household income threshold, offering more financial flexibility and a protective buffer for your lifestyle. Understanding and securing your place within the middle class requires strategic financial planning and awareness of your income status.
By taking steps to reduce debt, build an emergency fund, and increase your income, you can work towards achieving and maintaining a stable financial position.