According to new Bank of America data, the middle-income benchmark varies significantly based on factors such as marriage and income diversifications. While the U.S. Census Bureau indicates an $80,000 income for middle households, married households see an average of $103,000, and those with multiple income sources can earn $136,000. The report reveals that younger generations, especially Gen Z and millennials, make up a larger portion of middle-income households but now face rising costs of living more acutely than older generations, who have already made substantial purchases at lower pre-interest rates.
However, data from the bank found that this number can greatly differ according to lifestyle factors like marriage and home ownership.
Interestingly, we find middle-income households skew slightly younger than the overall population, with Gen Z and Millennials comprising a larger share of middle-income households than older ones.
At a time when prices and interest rates remain sticky and high, Gen Z will see their monthly payments on milestone purchases like homes and cars be more expensive than previous generations.
Older generations, meanwhile, are comparatively more insulated from some of these rising costs, as they likely purchased a car or home some time ago when interest rates - and prices - were lower.
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