A recent Wall Street Journal article highlights a fascinating shift in the American economic landscape: more families are moving into higher income brackets, yet many still don’t feel wealthy. According to new research from the American Enterprise Institute (AEI), a family of three earning between $133,000 and $400,000 is now considered upper middle class in 2024. At first glance, that might sound like a comfortable—even affluent—position. But the reality is more nuanced.

The data shows a clear long-term trend: fewer families fall into lower-income categories while more families are now classified as upper middle class or wealthy. In fact, the percentage of Americans considered “poor or near poor” has dropped significantly—from about 30% in 1979 to around 19% today. This is, objectively, a success story. Higher wages—especially among college-educated, white-collar workers—have driven much of this upward mobility, and dual-income households have also played a major role, with more than 80% of upper-income households consisting of married or cohabitating couples.

Despite rising incomes, many families in this “upper middle class” still feel financially stretched. While these households can afford premium products and services, travel, and even unexpected expenses, they still worry about the cost of college, housing affordability, and long-term financial security. Even families earning $200,000+ often describe themselves as “comfortable,” not wealthy.

As incomes rise, so do expectations—and expenses. These same households are often paying for high-end childcare and education, living in higher-cost neighborhoods, and maintaining lifestyles that require sustained income. This creates a powerful dynamic where higher income doesn’t necessarily translate into financial peace of mind.

The generational perspective adds another layer. Many Americans today are doing better than their parents, with examples of individuals growing from modest starting salaries to strong six-figure incomes, achieving homeownership and building savings along the way. Yet even with that progress, concerns remain—particularly about whether the next generation will have the same opportunities given rising costs of living.

This shift carries important implications for retirement planning. A high income alone does not equal wealth without disciplined planning. Rising expenses—especially for housing, healthcare, and education—can erode even strong earnings. Ultimately, planning is about control: building sustainable income streams, reducing uncertainty, and creating flexibility in retirement.

America may be getting richer on paper, but the emotional experience of wealth hasn’t kept pace. That’s why thoughtful financial planning matters more than ever. In today’s economy, it’s not just about how much you make—it’s about how well your plan supports the life you want to live.

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Mike Mickels is the President and Chief Compliance Officer of CochranMickels Retirement Specialists, LLC, and an avid sporting clay competitor. Our firm provides personalized planning and investment services to individuals approaching and in retirement. Disclaimer: This content is intended solely for informational purposes. CochranMickels Retirement Specialists, LLC and its representatives are only authorized to offer advisory services where properly licensed or exempt from licensure. Investing carries risks, including potential loss of principal capital. Our firm does not endorse external links, nor is it responsible for third-party content.