In the U.S., there are no universally accepted definitions for economic classes. According to the most recent government data, the median household income in the U.S. is $56,500, which means half of all American households earn more and half earn less.1
However, when it comes to our own perception of financial well-being, many people use neighbors, colleagues, family members and other friends in their social sphere to measure their success. In light of these comparisons, you can’t help but recall the 1970s sitcom “The Jeffersons,” with its catchy theme song “We’re moving on up … to a deluxe apartment in the sky.”
You may remember some of your own achievements signifying success in life. Was it your first new car purchase? Trading up to a home in an upscale neighborhood? Reaching some arbitrary income level established in your mind? (It’s a different level for everyone.) Our inherent desire to compare our success with others can be detrimental, leading to disappointment and frustration. After all, there will always be someone with more wealth or higher income than you.
At what point do we stop competing with the Joneses? For some people the answer is “never,” as it’s ingrained in their personality. For others, retirement may be a good time to start. One study found that while a clear majority of Americans said they valued having more money over having more time in their life, those who preferred more time reported being happier.2
You may have lived within your means throughout your career but if your income is lower in retirement, it’s important to adjust your lifestyle accordingly to stay within your new limits.
1 Joao Alhanati. Investopedia. Oct. 17, 2016. “Which Income Class Are You?” http://www.investopedia.com/financial-edge/0912/which-income-class-are-you.aspx. Accessed May 4, 2017.
2 Oliver Burkeman. The Guardian. Sept. 30, 2016. “Why you need to count time, not money.” https://www.theguardian.com/lifeandstyle/2016/sep/30/time-or-money-question-of-value-oliver-burkeman. Accessed May 4, 2017.