The Independent Money channel is brought to you by Credit Karma.
Around 31 percent of U.S. families were considered upper-middle class in 2024, according to an analysis from the public policy think tank American Enterprise Institute.
While the upper-middle class is often associated with more financial advantage than the middle class, it isn’t always clear when you’ve moved into it. That’s especially true if it’s based on income, Jordan Gilberti, a certified financial planner and founder at Sage Wealth Group, told The Independent in an email.
“There’s not huge agreement on one exact figure (there’s no official government definition), but the range you’ll see most often cited from multiple estimates in 2026 is $117,000 to $150,000 for a household,” Gilberti said.
“The honest answer: it depends where you live. In nine states you need at least $150,000 to count as upper-middle. In San Francisco, six figures might still feel like scraping by.”
Since two people with similar incomes may live different lifestyles, it’s the financial decisions, opportunities, and challenges compared to the middle and upper classes that pinpoint what it means to be upper-middle class.
open image in galleryFinancial flexibility
Flexibility is a key differentiator between the middle and upper-middle classes, according to Jon Lapp, a certified financial planner at Pennsylvania-based Haven Financial Advisors.
“I think that moving from middle to upper-middle class can be measured more by how much flexibility and control they have over their time and decisions,” Lapp told The Independent in an email.
Assuming they don’t spend more than they make, the upper-middle class may have more breathing room in their budgets. These higher earners are typically better prepared for surprise expenses, too.
“When saving [and] investing is mostly automated, large bills or emergencies are easily manageable, and you are on a good path for work to become optional, I would consider that an upper-middle-class lifestyle,” Lapp said.
A larger financial cushion can also set the upper-middle class apart from struggling middle-class households, many of which struggle with basic needs. Some 1 in 3 middle-class families nationwide had difficulty affording essentials like housing and food, according to a 2025 Brookings research report.
open image in galleryRoom to grow
For the upper-middle class, higher earnings provide more opportunities to grow wealth, Eric Croak, president of Ohio-based financial planning firm Croak Capital, said in an email to The Independent.
“You have an amazing amount of leeway to compound your wealth,” Croak said.
While a common recommendation is to invest 15 percent of income, higher earners may be able to invest even more while still affording daily expenses and other goals.
And, unlike the middle and lower classes, the upper-middle class is more likely to afford to hire financial professionals to help them make the most of their money.
“Many of these people have a personal CPA and estate attorney as well as a family advisor, whereas many others cannot afford those luxury items,” said Croak.
Unexpected squeezes
Despite higher earnings and increased optionality, upper-middle-class Americans aren’t immune to financial strain.
Reduced eligibility for assistance programs and tax breaks can create a squeeze, said Xintian Wang, a senior tax manager at Massachusetts-based Alexander Accountants CPAs.
“Upper-middle-class earners have incomes large enough that they would not be eligible for government assistance such as financial aid, health subsidies, or many tax credits,” Wang told The Independent in an email. “Yet the amount of income they have is still insufficient to qualify them as being wealthy.”
Croak found that the tax crunch – which may not feel proportionate to actual earnings – leaves some upper-middle-class clients feeling stuck.
“I find that wealthier, upper-middle-class folks often feel trapped…and will do literally anything to move back into the middle or lower classes (like taking a job they hate to pay a lower tax bill or buying a smaller house to reduce their overall tax liability),” Croak said.
open image in gallerySpending habits can also increase financial strain and instability. An upper-middle-class household might choose an expensive lifestyle that negates some of the benefits.
“The catch is that lifestyle tends to creep up right along with the income in [the] way of a bigger mortgage, private school, two car payments, so the safety net is thinner than the salary makes it look,” Gilberti said.
Upward moves
Moving from middle to upper-middle class is usually more straightforward than moving to the upper class. Wang said this first move is more within your control.
“The jump from middle to upper-middle is one you can create with a raise, or a second earner, or a better job,” Wang said.
Along with an increased income often comes a higher tax bill. Despite that, Croak found that higher earnings generally still make the move from middle to upper-middle class feasible.
“You’re making more money, so even though your taxes will go up, you’ll still have plenty of money left over,” he said.
But climbing to the upper class will likely take more than a higher salary. It’s often about having the right assets that passively grow or receiving a windfall.
“Significant wealth is typically built through ownership – business, real estate, etc. – or compounding growth over a long period of time,” Lapp said. “It can also occur through an event such as an inheritance or lottery winning, but these are typically outside of your control.”
Wang added that the tax code also complicates the move from upper-middle to upper class.
Ultimately, a high salary alone doesn’t automatically lead to greater wealth since the Internal Revenue Service (IRS) taxes investment income and salaries differently.
The IRS taxes job income up to 37 percent, but taxes investment gains up to 20 percent, Wang said.
This article is sponsored by Credit Karma. We may earn a commission if you engage with their services using links in this article.