10 Signs You’ll Retire Comfortably in the Middle Class

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Defining the middle class is tricky. According to the Pew Research Center, you could be considered “middle class” if your household income is two-thirds to double the national median income — so $47,189 to $141,568. This is a wide range, and one that doesn’t necessarily account for factors like household size, location, or individual needs beyond the essentials.

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But if income isn’t enough to determine whether you’re on track to retire in the middle class, what is? GOBankingRates spoke to several financial experts on this matter. Here’s what they said are some of the top signs you’ll retire comfortably in the middle class.

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You Have a Sense of Ease

While you might not be able to buy a yacht or second vacation home, there’s a sense of ease that comes with being financially stable.

“Being someone who came from the working class and moved up the socioeconomic ladder, I can tell you from experience the signs that I had arrived to the middle class,” said Jennifer P. Kirby, a fiduciary financial advisor and managing partner of Talisman Wealth Advisors.

“While there are financial markers to the middle class, there’s also a feeling. It’s a sense of greater stability, that making ends meet is not as difficult, that you are no longer one problem away from financial peril. Overall, it is a sense that you don’t have to track every single penny that you spend — that you can take a breath and know that things are relatively stable.”

You Have Access to Quality Healthcare and Education

If you have access to high-quality healthcare and education, it could be a sign that you’re on track to retire in the middle class.

“In the middle class, you have access to better quality education for yourself and your children. This could mean attending private schools or having the means to go to college,” said Sherman Standberry, a licensed CPA and managing partner at My CPA Coach. “Additionally, being in the middle class also allows you to afford better healthcare options, ensuring that you and your family have access to quality medical care.”

You Don’t Have Any Debts

People in the middle class often still rely on certain forms of debt — auto loans, student loans or mortgage loans — to afford their lifestyle. But if you’re approaching retirement, you should be on track to pay off any existing debts — if you haven’t already.

“Being debt free is another sign that you’ll retire in the middle class,” Standberry said. “It’s important to pay off any outstanding debts before retiring, as this will free up your income and allow you to live comfortably during retirement. Being debt free also means not having to worry about making payments or accruing interest, giving you peace of mind during your golden years.”

You Have a Diversified Investment Portfolio

Another indicator that you’ll retire comfortably in the middle class is that you have a diversified investment portfolio, said Garrett Smith, a financial advisor and CCO at Ascend Investment Partners.

This portfolio ideally should include retirement accounts, including 401(k)s or IRAs. You also should be consistently contributing to these accounts without financial difficulty.

You Have a Clear Budget

“The greatest sign that you will retire in the middle class is that you understand your full financial picture and can figure out a budget that allows you to live within your means,” Kirby said. “This is the secret to any retirement at any socioeconomic level.”

You still might face certain limitations based on your income or plan. For example, you may need to downsize or move to lower living expenses once you retire. But you also have realistic expectations of your retirement budget and you’re OK with those.

You Have a Realistic Retirement Plan

If you have a realistic retirement plan, and your finances are keeping up, you could be on track, too.

“To retire in the middle class, it’s important to have a solid retirement plan in place,” said Standberry. “This could include contributing to a 401(k) or IRA, investing in stocks or real estate, or even starting your own business. Having a well-thought-out retirement plan ensures that you will have enough income to support yourself during your retirement years.”

You Can Handle Basic Financial Emergencies

You might not have enough cash on hand to cover every financial emergency, but you’re not too worried about basic ones — like car or home repairs — because you have an emergency fund.

“Having an emergency fund to cover unexpected expenses and some level of savings or investments for future goals like retirement or education demonstrates financial preparedness, a hallmark of the middle class,” said David Reyes, founder of Reyes Financial Architecture.

You Can Splurge Every Now and Then

People in the middle class typically have more choices regarding their money. They don’t have to focus only on what they need — they can also afford the occasional luxury or nonessential purchase.

“While it’s important to have financial stability and save for the future, being able to splurge on certain things occasionally is also a sign that you’re in the middle class,” said Standberry. “This could be treating yourself to a nice dinner or going on a vacation. Being able to enjoy these luxuries without having to worry about your finances too much is a privilege that many in the middle class have.”

You’re Saving and Investing Regularly

Another sign that you’ll retire in the middle class? You’re able to consistently save money.

“This means you have enough income to cover your expenses and still have some left over to save for the future,” said Standberry. “This is important because being able to save allows you to have a safety net in case of emergencies and also plan for your long-term financial goals, such as retirement.”

But it’s not just about saving. According to Kirby, being able to invest over time through after-tax and retirement accounts is also an important sign.

You Aren’t Reliant on One Income Source 

Another sign that you’re going to retire comfortably in the middle class is that, during your working years, you have more than one source of income.

“This could include a pension from your job, rental income from properties you own, or even passive income from investments,” said Standberry. “Having more than one source of income provides a safety net and allows for financial stability during retirement.”

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This article originally appeared on GOBankingRates.com: 10 Signs You’ll Retire Comfortably in the Middle Class