(Closed) Do you think 250k/year is middle class?

posted 6 years ago in Finances
  • poll: Do you think 250k/year is a good place to draw the line for higher taxes?

    Yes, that's a good place to draw the line

    No, the line should be lower

    No, the line should be higher

    Not sure.

  • Post # 91
    Member
    1037 posts
    Bumble bee

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    glitters:  In Canada as well and totally agree with your post… One post said that Bee saves about $3500 a month in various investments, rrsps and what not. Our combined monthly bills around there, without credit card debt so I can’t imagine having that much to put away.

    Mind blown by many comments for sure!

    Post # 92
    Member
    1140 posts
    Bumble bee
    • Wedding: October 2016

    So, I agree that 250k is probably at least upper middle class in all markets.  However, I will say that with high income comes high expenses.  I pay the equivalent of 1.5 times my mortgage every month on my student loans.  That is a HUGE expense, and I can’t deduct a penny of the interest I pay because I make too much.  I also hit the threshold for Alternative Minimum Tax this year, which means I can’t deduct some of the mortgage interest I pay, in essence raising my tax rate.

    Post # 93
    Member
    1629 posts
    Bumble bee

    I think 250k should be considered upper middle class and that the line we are talking about should be drawn much higher. I say “should be considered” because there’s no question that in certain parts of the country you can live like an Empress on that amount. But where I live in Northern VA, which is the DC metro area, it doesn’t go terribly far. We are close to 250k a year and we drive 2007 vehicles and can’t afford afford to replace the very old carpet in our home (which could be considered a “starter” home even though it cost over 700k) and aren’t saving as much as we would like to be. If we were living in the small town in the midwest where I grew up, we could be covering the floors with fancy Persian carpets and driving Bentleys and saving like crazy. 

    Post # 94
    Member
    423 posts
    Helper bee
    • Wedding: September 2016

    I don’t mean to sound argumentative so please no one take it that way. I think it’s kind of silly to say with more money comes more expenses. You may WANT more things but you don’t NEED more things. Yes Student loans are very often higher for those who make more because they had to have more education to get the jobs they have but other then that expense yoir food, gas, utilities aren’t any more then anyone else in your location.  

    For example my parents make  little more then $250k.  They are considered extremely wealthy here in Appalachia and have had that wealth my whole life. So we could have easily been living in what could have been a mansion. They could have easily been driving $40-50k cars and given my brother and I the same. However my parent believe in living a modest life. We grew up in a basic 3br 2ba ranch that they paid $100k for.  My brother and I went to state colleges and were given very reasonable cars to drive. We didn’t have the latest and greatest of everything. We never wanted for anything but we didn’t stand out as having more the. Other kids.  My parents saved a lot but they also gave a lot to others.  

    I say all of that not to say they lived a superior life at all. Just that it isnt true that if you make more you spend more. There is nothing wrong with wanting things at all especially if you have the means to buy them. 

    Post # 95
    Member
    3791 posts
    Honey bee
    • Wedding: October 2014

    For me, where I live, I would think a cbined incoming of 250K is definitaly upper class. I am sure some people in my city do make that much combined, but I am definitely nowhere near that and am not poor, but would be middle class… to me, anyway.

    250K in my city would be awesome to make. We could live in a good size home that could be our forever home due to the price ($250K house is nice, but most really nice houses are $300K+), so we’d be living very comfortably off of that income with mortgage, taxes, bills, etc.

    Post # 96
    Member
    9114 posts
    Buzzing Beekeeper

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    msmistis:  I agree with this to an extent, but in many higher cost of living areas some expenses ARE unavoidable. Housing is a big one. I live in a nice little suburb outside of Boston and my fixer-upper home cost me $340k three years ago and that’s considered really cheap in my town. I bought the crappiest house in town and I’m putting in a lot of money and sweat equity and it was STILL $340k!  The only way to lower my housing expenses would be to move over an hour outside of the city or move into a really dangerous neighborhood and it wouldn’t even make it that much cheaper! Certainly not cheap enough to offset the increase in commuting costs and getting a job outside of Boston would cut my salary in half for my particular profession. We are a one car family, and I’m very frugal by nature but 6 figure incomes just do not stretch as far in certain cities. 

    ETA: don’t forget childcare! my best friend uses the center down the street from my and 4-days a week for an infant is about $375. That works out to nearly $20,000 a YEAR for ONE child in daycare. That’s more than her mortgage. And that’s average for the greater Boston area. 

    • This reply was modified 5 years, 7 months ago by LilliV.
    Post # 97
    Member
    1140 posts
    Bumble bee
    • Wedding: October 2016

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    msmistis:  Yes, but did you read the part where I said that my student loans are 1.5 times my MORTGAGE!?!? So basically, I pay 2.5 mortgages on a monthly basis!  I’m not saying I don’t have a comfortable life, but student loans are the single largest line item in my budget.  Second is retirement savings, third is mortgage (and the fact that mortgage comes AFTER retirement savings should speak to the fact that my house is not fancy!).  Fourth largest would have been my car (but I drive a very modest car and paid that off) which leaves insurance – including the personal disability policy that I took out to ensure that if I were ever disabled, I could afford to pay my student loans.  That personal disability policy is more than homeowner’s, auto, and life insurance combined – so not cheap AT ALL.  

    Without my student loans, I would not have my current income but I also wouldn’t need anywhere as much income to live.  If my student loans were wiped out, I would have the same standard of living making about 30% less on a yearly basis – which probably puts me solidly in the middle class rather than upper middle class.

    I’m not talking about buying cars and sending kids to fancy schools here.  I’m talking about covering the expenses needed in order to avoid bankruptcy/financial trouble.  

    Don’t get me wrong – I’m not crying poverty.  The schooling I completed and my career are very much MY choice.  I’m just pointing out that there are certain expenses that may be incurred in order to become a “high earner” that in the end might mean that you don’t actually have any more money than people who make substantially less.  

    Post # 98
    Member
    423 posts
    Helper bee
    • Wedding: September 2016

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    LilliV:  yes but housing is a cost of living thing not a making over $250k thing. That $340k house cost the same rather you make $250k or $25k. Cost of living is drastically different around the US within one location it is the same for everyone that lives in that single location. So making more does not mean you have to spend more. This of course isn’t what the OP was asking so it’s off topic but there were just a few comments that mentioned if you make more things cost more. Which really isn’t true. 

    Post # 99
    Member
    423 posts
    Helper bee
    • Wedding: September 2016

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    Whirlwind03:  Did you miss my statement that yes student loans may be higher?  Nothing cost more simply because you make more. Everyone that went to your collage and took out the same amount of loans are paying back the same amount as you are. Yoir income does not simply make things cost more. 

    Post # 100
    Member
    1140 posts
    Bumble bee
    • Wedding: October 2016

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    msmistis:  No, actually you are wrong.  I went to college and that is mostly paid off.  It was medical school which was expensive.  And it is from my medical education and training that I derive higher income.  Had I not gone to medical school, I’d definitely be making less but would have way less student debt.  I also would not have had the opportunity cost of being out of the work force for 4 years – so no retirement contributions, savings, or income for that time.

    Additionally, my student loan payments are actually income based.  So they are higher if I make more. 

    Post # 101
    Member
    8602 posts
    Bumble Beekeeper
    • Wedding: September 2015

    I think Americans in general are so focused on what everyone else has in a keeping up with the Joneses, reality/celebrity culture sense… And the general consumerism machine that we are all trained to think what we have is not enough and we need more more more. Hence saying you’re  middle class and it’s not luxurious to be making 250k. If you’re focusing on your Manhattan condo neighbors in a million dollar unit your dad bought you, yeah you might feel on the low end (not to pick on you PP, but youre a prime example) but in reality- compared to the rest of the city, those renting or paying their own mortgage, those in affordable housing WOW are you rich, compared to the rest of the country you are way on the upper teir, compared to the rest of the world? Forget about it. 

    So no I don’t think the top 1.5% of household income makes you middle class, and I definitely think your perception is skewed if you think you arent living well at 250k just because you’re not an uber billionaire. 

    Post # 102
    Member
    772 posts
    Busy bee
    • Wedding: November 2014

    Okay… so question about where to draw the tax line:  $200-250k is where I would draw it.  As others have stated, that puts you in the top 1.5% of earners in this country.  

    As for whether $250k is middle class, it depends on where you live.  I would argue that it is at least middle class every where.  To me, middle class means all the bills are paid and you have enough to put in a savings account, even if it’s $50/week.  It does not necessarily mean you have room for tons of extras but you are living decently comfortably.  As someone who lives in a high poverty area, I think some people lose perspective on what low-income *actually* looks like.  

    I would consider hubby and I to be middle class.  All are bills get paid, we are contributing to our savings as much as we can while trying to pay for my graduate school with as few loans as possible (for perspective, once I’m done my income will jump by at least $20k, which is more than I will have in loans when all is said and done).  We occasionally go out to dinner or see a movie.  We’re planning a short vacation this summer (three days within driving distance).  I buy clothes as needed but they usually come from walmart, the thrift store, or my sewing machine.  Hubby has a gym membership.  We have a car that is less than 5 years old that I will pay off in 18 months.  We will be buying a cheap used car (under $3k.  Hopefully under $2k) for me to get back and forth to my classes.  

    Where I live, $250k is pretty much rolling in it.  A decent house in a decent neighborhood is around $150k.  A great house in a great neighborhood is around $250-350k depending on the specifics.  There are some homes that are $500k+ but not many and those are pretty much all 6BR, water front homes.    

    Post # 103
    Member
    1786 posts
    Buzzing bee
    • Wedding: August 2016

    If this is combined income of 2 people I would say its definitely upper middle class for large markets like DC, NY, CA. I live in DC. I would not consider 250k to be rich in my area by any means but its a little more than regular middle class. In other areas 250k would be rich. I think you can be comfortable in DC with a combined income of 250k but you are not neccesarily living lavishly. Now in my hometown in NC 250k annually would have you in a mansion with anything you wanted. lol. 

    Post # 104
    Member
    384 posts
    Helper bee
    • Wedding: March 2016 - Miami

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    pinkshoes:  Depends on where you live, but for most places I’d say that’s more than middle class. I live in South Florida (suburbs between Miami and Ft Lauderdale), which is an area with a reletively high cost of living but lower than say NYC area, DC or California. And $250K would definitely put you above middle class here. Maybe not rich-rich, but people at that rate live in bigger houses than most, might send their kids to private school, probably own a small boat (it is FL after all).

    Here people with combined household incomes of proabbly $120K or less would put you at what I think of as middle class (which is me, and was my family growing up… think my parents made a combined $90K or so).

     

    Post # 105
    Member
    816 posts
    Busy bee
    • Wedding: July 2011

     

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    peppercosmo:  250k you can live really nicely if you don’t have payments to make.

    Well no shit, Sherlock!  If my parents bought me a million $$+ apartment in Manhattan and I had no debts, I could indeed live VERY nicely on 250k.  What exactly are you adding to this conversation other than bragging about how awesome you have it?  

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