“Upper middle class” is a phrase we hear a lot, but what does it really mean—especially once you’re 55 or older?
While it may conjure up images of fancy vacations or a big house, there’s actually a more specific way to define it: your net worth.
“I spend a lot of time analyzing how net worth benchmarks evolve and what it takes to meet those benchmarks,” said Dennis Shirshikov, a finance professor at City University of New York and director of growth and engineering at GrowthLimit.
By age 55, he said the upper middle class is less defined by income and more about accumulated assets, stability and the ability to withstand financial shocks as they prepare for retirement.
GOBankingRates broke down the numbers to see what it typically takes to fall into that category at this stage of life.
Shirshikov said the realistic benchmark for the middle class over age 55 is usually a range where total assets easily exceed liabilities and retirement preparations are well underway.
He explained that for many families, net worth starts around $1 million and then extends upward based on location, lifestyle and housing costs.
“The threshold is less important as a fixed number and more important as a measure of resilience, meaning households can withstand an interruption in income, handle major expenses and stay on track in retirement without severe financial stress,” Hirshikov said.
Explore More: 6 Signs You’re Actually Upper-Middle Class (Even If You Don’t Feel Like You’re Rich)
Read Next: 6 Clever Genius Moves All Rich People Make with Their Money
Reaching this level of net worth by age 55 typically requires decades of steady saving, diversification, and minimizing high-interest debt.
Hirshikov noted that most families who reach this milestone view retirement accounts as a non-negotiable commitment, build equity through homeownership, and maintain a long-term investment strategy that does not overreact to market cycles.
“The journey often reflects habit rather than windfall, with compound interest doing most of the heavy lifting,” he adds.
Hirshikov said three areas are most important. First, increase your retirement contributions as early as possible, preferably into a tax-advantaged account, to accelerate long-term growth.
Second, control housing costs relative to income so that cash flow remains healthy enough to continue investing.
Third, prioritize liquidity, as adequate cash reserves can prevent investment plans from being derailed when unexpected expenses arise.
“These steps provide people with the structural foundation to build a meaningful net worth over time,” Hirshikov noted.
“Net worth at age 55 is the product of choices made at 25, 35 and 45, so consistency rather than perfection is the key,” Shirshikov observed.
He explains that people often underestimate the power of long-term stable contributions and moderate lifestyle discipline.
He was not wrong. Research from the World Economic Forum highlights that Americans are aging as a nation, with a higher proportion of the population soon entering retirement age.
“By centering financial planning around clear savings goals, diversified investments and manageable debt, most people can move into the upper middle class without extremely high incomes.”
More from GOBankingRates
This article originally appeared on GOBankingRates.com: This is the minimum net worth for a 55-year-old to be considered upper-middle class