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- About 38% of millennials earning $100,000 or more a year think they’re middle class, according to an INSIDER and Morning Consult survey.
- The majority of these respondents think they’re financially faring just as well or better than they thought they’d be 10 years ago and are trying to save.
- A six-figure salary may no longer be what it once was – wage increases haven’t kept up with the growing cost of living, making it harder for millennials to save.
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The survey polled 4,400 Americans – 1,207 of them identified as millennials, defined by the survey as people ages 22 to 37 (237 respondents did not select a generation).
Of the respondents who answered the question, less than half who earn $100,000 or more consider themselves rich – about 23% of them think they’re upper middle class, and nearly 6% think they’re affluent. About a quarter of those earning $100,000 a year or more consider themselves below middle class – nearly 7% think they’re poor, and almost 20% think they’re working class.
The Pew Research Center defines the US middle class as people earning two-thirds to twice the median household income, which was $60,336 in 2017, meaning middle-class Americans were earning about $40,425 to $120,672.
Note that out of the 1,207 millennials surveyed, only 125 millennials both earn more than $100,000 and answered the question about which class they identify with, giving us a small sample size to work with.
The 38% of millennials in this income bracket who deem themselves middle class works out to 50 respondents. Of those 50, more than half think they’re better off financially than they thought they would be a decade ago, a little more than a quarter find their financial situation to be about the same as they expected, and only 16% think they’re worse off financially than they’d thought they would be.
That’s a better outlook than the typical millennial respondent in our survey – about 37% of millennials at any income level who responded feel better off financially than they thought they’d be 10 years ago.
The group’s overwhelming mentality that they’re faring just as well or better than expected might be traced back to their upbringing: 10% defined it as poor, 32% said they grew up working class, and 48% came from a middle-class background. Just 6% said they were brought up in the upper middle class.
Increased costs of living have made it harder to build wealth
While the pool of respondents for this question is relatively small, their responses do highlight the economic context of millennials’ financial situations that we see repeatedly in studies and surveys of all sizes.
In the current economy, a six-figure salary may no longer be what it once was. While millennials have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn’t kept up with inflating living costs: Rent, home prices, and college tuition have all increased faster than incomes in the US.
That’s especially true in some of America’s most expensive cities. Consider San Francisco, a hub for the millennial tech worker. Nearly 60% of tech workers, who typically make a six-figure salary, can’t afford homes in the area, Business Insider reported in 2018.
Ultimately, high costs of living, along with effects of the Great Recession, have made it harder for millennials to save and build wealth. The millennial respondents earning six figures who think they’re middle class are trying, though – according to the survey, 40% have a brokerage account, 82% have a retirement account, and 92% have a savings account.
But the cost of living has increased so much that even $1 million doesn’t stretch as far as it used to – millennials may need to look at a $2 million target number when it comes to saving for retirement.