Are Doctors NOW Members of the Middle Class?

In OR Out?

By Dr. David Edward Marcinko MBA CMP®

By Rick Kahler MS CFP® ChFC CCIM

Rick Kahler CFPThe middle class Marketers target it. Politicians champion it. Economists talk about it. Most of us consider ourselves part of it. FAs want to serve it.

Yet, when I’ve asked for a clear definition, I have not found anybody yet that really can tell me what “middle class” is.


I recently posted on Twitter that $90,000 was a middle-class household income and that it would take a nest egg of $3 million to generate that income in retirement.

A couple of my colleagues responded that my figures were way too high and accused me of being out of touch. As a lifelong South Dakotan, I’m used to being seen as “out of touch,” but the idea that $90,000 was beyond a middle-class income intrigued me.

I figured a few minutes with Google would point me to a definition of “middle class.” It wasn’t that simple. I soon discovered that neither politicians, nor economists, sociologists, nor financial advisors can agree on what makes someone middle class. It is a little easier to define a middle class income.

USA Today

I did find an excellent article in USA Today by Dan Horn of the Cincinnati Inquirer. He cited three surveys that attempted to define the middle class by income. The Pew Charitable Trust describes it as the middle 20%, an income range from $32,900 to $64,000. The U.S. Census Bureau disagrees.

They say a middle class income is the middle 60%, an income range of $20,600 to $102,000. The U.S. Department of Commerce begs to differ with both and says an income between $50,800 and $122,000 puts you in the middle class. Combining the income range of the three studies ($20,600 to $122,000) puts two-thirds of all income earners in the middle class.

My Personal POV

For me, defining middle class with such a broad income range just raises more questions than it answers.

First of all, the same income that will provide a comfortable middle-class lifestyle in a place like the Black Hills of South Dakota won’t necessarily do the same in San Francisco or Boston.

Second, if you want to assure yourself of a middle-class income throughout your lifetime, you apparently have to get rich.

Concept of expensive education - dollars and diploma

Case Model

Let’s assume a young couple, both allied healthcare professionals, earn $45,000 each for a household income of $90,000. Let’s assume they want to save enough to provide a similar income in retirement without counting on Social Security. To generate that income, with a 99% certainty they will never run out of money, how much will they need to save?

While financial advisors’ responses will vary, most will agree this couple would need between $2 million and $4 million in today’s dollars. Let’s settle on $3 million. If they each saved $1,000 monthly to 401k’s (about 25% of their salaries), our young couple could save $6,600,000 million ($3 million in today’s dollars adjusted for inflation) by the time they reached age 65.

However, while a couple needs $3 million to produce a middle-class income, someone with a net worth of $3 million is in the financial top 2% of Americans. That’s hardly middle class.

And to complicate things further, Gallup polls have shown that most Americans think anyone with a net worth of $1 million is rich. Yet having $1 million when you retire will generate a secure lifetime income of $30,000. So the net worth that we define as wealthy provides an income that we define as barely middle class.



Confused yet? I certainly am. There’s just one thing I’m still sure of. If you want a middle-class lifestyle after you retire, what you’d better do now is live a modest middle-class lifestyle so you can save enough to qualify as rich.


And so, are doctors members of the middle class – in potential retirement income under this model? Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.


Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact:


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14 Responses

  1. Retirement for Doctors

    Rick – According to CMP® program Founder Dr. David Edward Marcinko MBA CMP®, and Editor Gregory J. Kelley of Physician’s MONEY DIGEST [March 31st 2005], a 47 year old-doctor with $184,000 annual income would need about $5.5 million dollars for retirement at age 65.

    Then came the “flash-crash’ of 2007-08, the home mortgage fiasco, CDOs, and the Patient Protection and Accountable Care Act [PP-ACA] of 2010; etc. No wonder the medical provider career panic is palpable.

    Although this corpus sounds daunting, it should serve as a wake-up call to all physicians that they may need to cut personal consumption, recognize new office liability risks, improve practice managerial efficiency and save more aggressively in order to finance the retirement they’re working toward.

    Hope Rachel Hetico RN MHA


  2. The Frugal Habits of [Doctor] Millionaires

    The word “millionaire” typically conjures up images of a lavish, jet-setting lifestyle, but behind the scenes, that may not always be the case. Like Warren Buffett, who famously still lives in the relatively modest house in Omaha, Nebraska, that he bought in 1958 for $31,500, many millionaires (and billionaires) live a modest, if not downright frugal lifestyle–a lifestyle that may have helped them become millionaires in the first place.

    We’ve all heard the saying “It takes money to make money.” So how can you find extra dollars to save and invest? If you’re looking to improve your financial position, consider putting some of these habits into practice.

    Cultivate a frugal mindset

    Many people equate being frugal with being cheap, but that’s not really correct. Being frugal means carefully watching your dollars and not spending more than you need to–a trait many millionaires employ. To help cultivate a frugal mindset, get in the habit of asking yourself this question: “With a little extra effort and/or sacrifice on my part, is there any way I can save money here?” Having a frugal mindset can really help when it comes time to playing the role of American consumer, where temptation is everywhere.

    Buy wisely and sparingly

    We all need “stuff” now and then; the key is not overdoing it or overpaying for it. Try to buy mostly what you really need, not what you really want. Money you save can then be used to build your savings and investment accounts.

    Don’t let the price tag of your car, home, or designer suit define your character. For example, a reliable car that safely gets you from Point A to Point B may be completely sufficient for your needs. According to the book The Millionaire Next Door, the top car brand among millionaires is Toyota, not Mercedes or BMW. Even Mark Zuckerberg, the billionaire founder of Facebook, has been spotted driving an Acura TSX, an entry-level luxury car whose base price is about $30,000. The bottom line? As you move up the net worth ladder, avoid the temptation to elevate your “status” by overspending on luxury goods.

    You can be smart about everyday consumer purchases, too. You might be surprised to learn that many millionaires clip coupons, buy in bulk, wait for sales, scour eBay and Craigslist for deals, limit clothing purchases, fly coach, avoid credit cards, and save half their restaurant meal for lunch the next day–habits that can free up cash for the occasional splurge.

    Shun debt

    Debt is bad. Well, mostly. At times taking on debt is necessary, for example when buying a home or attending college, because without it, many people won’t have saved enough money. But generally speaking, you should be leery of taking on debt for things that cause you to live beyond your means. Remember, every dollar you borrow today is a dollar you’ll have to pay back tomorrow, with interest.

    People who turn a modest financial base into wealth often do so by living frugally, saving regularly, investing wisely, and avoiding debt. By contrast, people who end up in a perpetual cycle of debt are often those who spend and borrow excessively to support an unsustainable lifestyle.

    Take action

    What do CEOs Tim Cook (Apple), Ursula Burns (Xerox), Robert Iger (Disney), and Indra Nooyi (PepsiCo) have in common? They’re all up by 5:00 a.m., hitting the gym, reading, working. As Benjamin Franklin famously quipped: “Early to bed and early to rise makes a man healthy, wealthy, and wise.” And indeed, many millionaires and leaders aren’t couch potatoes. They don’t sit around waiting for things to happen; they make things happen–by getting up early, working hard, looking for opportunities, constantly educating themselves, taking calculated risks, networking, staying active, and generally trying to improve themselves day in and day out. And, with the explosion of information online 24/7, like this ME-P, learning new things has never been easier.

    So, what about your habits, doctor?

    Sean G. Todd Esq., CPA


  3. Have Doctors Joined the Working Class?

    With time, physicians learn to think of themselves as healthcare providers, their work as healthcare delivery, and their patients as consumers or customers. The physician, in other words, becomes a mere vendor and the patient a mere purchaser.

    But, seeing physicians and patients in this light leaves little room for the virtues of character and trust. It is difficult for physicians to take themselves seriously as professionals if patients treat them with the same suspicion as snake oil salesmen.

    Richard Gunderman MD
    [via Ann Miller RN MHA]


  4. A very challenging socio-political-economic environment

    It is increasingly challenging to practice medicine. With the Medicare Trust Fund slated to go bust in 2019, the Center for Medicare and Medicare Service (CMS) is increasingly resorting to cutting physician reimbursements and implementing capitation and bundled value based medical payments models.

    The medical reimbursement effects of the PP-ACA are not yet fully discerned; but appear to continue the decline in compensation.

    And, to illustrate this potential governmental control, in what other industry can participants debate the simple question, “who is the customer?”

    Sad, but true.

    Dr. David Edward Marcinko MBA


  5. Working Hard for the Money?

    Physicians ARE paid by someone else, they ARE working in someone else’s facility (hospitals) and they ARE using someone else’s equipment (hospital owned resources).

    And, through this process they are producing volumes and volumes of excessive, wasteful and possibly harm interventions.

    S. Daniels


  6. The “Wealth Gap”

    The wealth gap between middle and upper income households has widened to the highest level on record, says the latest Federal Reserve data and the Pew Research Center.

    In fact, the median wealth for high-income families was $639,400 last year — up 7 percent from three years earlier on an inflation-adjusted basis.

    In Pew’s definition, middle-income households are those earning between two-thirds and twice the median income, after adjusting for household size. The median marks the halfway point.

    For example, a one-person household was categorized as middle income if its earnings last year were at least $22,000 but less than $66,000. For a four-person family to qualify as middle income, earnings would have to be at least $44,000 but less than $132,000.

    S. Daniels


  7. Middle class

    The American middle class, long the most affluent in the world, has lost that distinction.

    While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.



  8. Odds you’re in top 10 percent are better than you think

    The people who comprise the richest 1 percent of the world population now own half the world’s household wealth, according to a new report from the Credit Suisse Research Institute.

    This statistic represents a rebound from the end of the 2007-2009 recession, when the richest 1 percent’s share of global wealth had slipped as low as 44.2 percent.

    As the sixth annual Credit Suisse Global Wealth Report puts it:

    The trend has reversed since 2008 and the additional rise this year takes the share of the top percentile to a level not observed since 2000 and possibly not seen for almost a century.



  9. Middle Class?

    How your income compares with that of others your age. We are still blessed.

    Dr. Carlington


  10. Working Class Docs

    Have physicians finally joined the working class?



  11. Reality Check

    Nearly a third of American households now have $0 in wealth, according to Deutsche Bank, the worst situation since the U.S. government began keeping track of that statistic (wealth outside of a home) in the early 1960s.

    Dr. David Edward Marcinko MBA


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