I don't know what is middle class it appears to be what you live like. Most people aren't sure either. Great discussion on the forum.
I think the house we're in is absolutely middle class, it has 3 bd, 2.5 ba and is 1800 sq ft with a 2 car attached garage on 5000 sq ft lot. It's in a preplanned neighborhood. Lots of young families are moving in school district. People have either 1 or 2 cars. They both work or a stay at home parents. It appears completely middle of the road.
Is it more than we had 40 years ago? In some ways yes. We have internet, cable tv, cell phones, etc. But in other ways I think the middle class also has less.
What ways? It is a fact that less people today are covered by pensions than 40 years ago, even 20 years ago. Very few people have free medical insurance for life from their jobs after retirement. I think only the military has it. Constantly articles are written about people having only $100k in 401k. Here's the truth that when people like my mom in her 60s retired at 55 with a pension for life she didn't need a 401k. She had one but she didn't have much nor did most people older than her. The majority of baby boomers had pensions and social security. I am curious what will happen to people when the scales start to tip and people retire without pension?
Second health insurance premiums have gone up exponentially. People are still tied to employers but many employers are trying to switch employees to high deductible premium plans and use health savings accounts. This usually costs more for the employees. The real hit? That 40 years ago most employers picked up the entire premium payment, versus today when employees are often foot at least a portion of the premium if not most.
Third, college costs have skyrocketed. Even cheaper alternatives like community college and state schools are difficult to afford working and going to school. In the 80s people could still "work" and make enough to afford tuition. Is it realistic now? No. Now even the cheapest schools are out of reach for people working and going to school full time. The irony is that having a degree no is more important than ever!
I think in many ways the middle class lives more luxurious lives than before. We have a more amenities that people didn't have because of technology. But I also think that the middle class was more cared for in retirement and prior by companies, government jobs, versus today a lot more emphasis is placed on the worker.
What do you think defines the middle class?
What's middle class
October 29th, 2015 at 05:01 pm
October 29th, 2015 at 05:20 pm 1446139214
Living large, you are awash in space and unimaginable luxury.
The house we are in is an apartment -- 1.5 br, 1 bath, 950Sf, no lot, one outdoor parking space qualifies as... not very middle class.
October 29th, 2015 at 06:10 pm 1446142219
Have you noticed everything is being downloaded to the consumer. Perhaps you've read, The Organized Brain.
ATMs are replacing tellers, on-line banking replaces chequing accounts, automatic check-outs are replacing grocery clerk, e-filing income tax makes talking to a real person astonishing and anywhere I call for information has me sputtering as they list 'press 1 for yadda, 2 for nadda and lately double and triple numbers for a recording that is to vague to answer the details you need.
October 29th, 2015 at 06:42 pm 1446144132
Middle class is a tough one to define because their are so many factors and I'm pretty sure it isn't defined by how many bathrooms you have. Employers didn't always offer insurance either. That is also a relatively new thing in our society. And yes, military members get the wonderful VA health insurance for free. Have you heard about their ability to service their members? It's awful!!
I think the luxuries are a bit of the problem. People think they need cable tv and iPhones. No, people need to save first for retirement and if they can afford those things after than by all means buy them.
October 29th, 2015 at 08:19 pm 1446149952
Snafu, in Canada it's around 17%. I know because my MIL told me. It is not 17% in the states. Certainly not at the state and federal government. In Hawaii it was 7.5% contribution then 0%, now 6%. Not enough to fund it. I believe military is 0%. Ask CCF she'd know better. It's 0% contribution and after 20 years it's 50% of base salary for military. Calpers is 11% for teachers. I believe it's the 8% in MA for teachers for 60% of high three pension. FERS contributes 7% to their defined benefit.
There is no way you can have that return and generate that sort of annuity at that payout with that little contribution. Thus why there are so many underfunded pensions. No one addresses the fact part is the overestimation of returns and the under contributions.
Yeah I noticed a lot of things are becoming automated. UGH. Sometimes it's annoying.
October 30th, 2015 at 12:06 am 1446163614
November 1st, 2015 at 07:49 pm 1446407399
As for your 401k you are generating an annuity of either $30k or $40k depending on what rate you calculate for $1M. If you had a pension and it paid out what do you think you'd have contributed and what would you have saved?