If asked, almost all Canadians would say that they are in the middle class. Is that really true? When looking at the Middle class Where do you fit in?
Defining Wealth
Before looking at where middle class Canadians are standing these days, it’s important to define wealth. There are two components to wealth, income and net worth. Income is easy; that’s how much is earned during the year. Net worth is the amount that would be left if all assets were sold and all debts paid.
It’s common for a younger adult to have a high income but little net worth. If a home has been purchased, there is probably a large mortgage. A retired landowner, on the other hand, might have only a small yearly pension, but own acres of land worth millions of dollars if sold to a property developer.
Geographic Differences
It’s certainly no surprise, but average net worth varies depending on where one lives. Those who live in Canada’s largest cities are more likely to have an average net worth that is close to the national averages for the middle class. Residents of Montreal and Quebec City, however, are more likely to have a net worth below the national average. For Quebec, this can be explained by the higher percentage of younger households, composed of Canadians just beginning their careers.
What is a Middle Class Income?
The following 2013 income estimates are from MoneySense, based upon 2011 data from Statistics Canada. They divided the data into five equal groups, with the highest 20% being considered wealthy and the bottom 20% to be below the middle class income requirements. Wealthy residents of Calgary had the highest incomes, earning a whopping average of $362,760 per year.
Middle Class Single People
- The lower-middle class incomes range from $18,718 to $23,356.
- The middle 20% incomes range from $23,357 to $36,859.
- The upper-middle class incomes range from $36,860 to $55,498.
Middle Class Families of at Least Two People
- The lower-middle class incomes range from $38,755 to $61,928.
- The middle 20% incomes range from $61,929 to $88,074.
- The upper-middle class incomes range from $88,075 to $125,009.
Average Canadians are Better Off
In the three year period of 2006-2009, the average Canadian household saw their wealth decline by an average of 10%. However, since 2009, average Canadians have seen their household net worth increase by approximately $75,000, or about 15%. That’s excellent news, although there is a huge disparity geographically.
- The average net worth of a Canadian household is $442,130.
- The average net worth in New Brunswick is $196,240.
- The highest average net worth is in B.C. and is $591,047.
At least half of the average Canadian’s net worth resides in their home, which puts net worth at risk if the real estate market tanks. However, Canadians are doing very, very well and living good lives when compared to many others. However one fits into the technical definition of middle class, it’s a great time to be Canadian.
FAQs
A middle class income in Canada is anything that falls between between $53,359 and $106,717. Those in this class bracket typically earn between 75% and 200% of the median Canadian household income after tax.
What is the upper middle class retirement income in Canada? ›
Retirement Income and the Upper Middle Class
In order to have a retirement income that's considered to be upper middle class in Canada, you would need to have around $1.7 million saved. This would give you an average income of around $100,000 annually for a total of 25 years.
What family income is considered upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range. "The upper middle class has grown...and its composition has changed.
What policies might slow the growth of the superrich based on the author's assessment of inequality trends? ›
The policies that might slow the growth of the superrich based on the author's assessment of inequality trends include implementing progressive taxation, regulating financial markets, and redistribution between rich and poor.
What is considered middle class in Canada in 2024? ›
A question that arises when considering what makes someone middle class: Are middle class earnings even enough for the life you want? It's a definite concern. “If you make between about $50,000 to $150,000, you are considered to be in the middle class as of 2024,” said Kullberg.
Is $75000 a good salary in Canada? ›
$75,000 is $12,950 more than the average yearly salary of $62,050 in Toronto. A salary of $75,000 per year means that you would be taking home about $56,110 per year after taxes, or $4,676 per month to pay for things like housing, transportation, groceries, and entertainment.
Is $1000000 enough to retire in Canada? ›
The “4% rule” is another popular method for working out how much you need to retire in Canada comfortably. The idea is that you take out 4% of your savings for every year of retirement. For example, to be able to spend $40,000 a year in retirement, using the 4% rule, you would need to save $1,000,000.
How much money do you need to retire comfortably at age 65 in Canada? ›
How much you need to retire really depends on a lot of different factors including age, lifestyle, monthly bills and such. However, the general person will need a total of between $700,000 and $1,000,000,000 at retirement, roughly 70-80% of their average pre-retirement income.
How much money do you need to retire with $100000 a year income in Canada? ›
A general rule of thumb is to replace 70-80% of your annual pre-retirement income. This means if you currently make $100,000 a year, you should aim for at least $70,000 of annual income in retirement. After retirement, your expenses are likely to go down, so 70-80% of your pre-retirement salary should suffice.
What salary is considered middle class for a single person? ›
But data from the U.S. Census Bureau cites a different number as the average salary: just under $75,000. What does this all mean? By the Census data, it means that if you earn between $50,000 and $150,000 a year, you are considered middle class.
The most common professions of the upper-middle class tend to center on conceptualizing, consulting, and instruction. They include such occupations as lawyer, physician, dentist, engineer, professor, architect, civil service executive, and civilian contractor.
How do you know if you are middle class? ›
The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau.
What areas in the US with the highest poverty rates are often home to? ›
The regions with the highest poverty rates are concentrated around the Mississippi River, which are also the regions with the highest Black populations. Mississippi's Black residents are three-times more likely to live in poverty than White residents, one of the worst ratios of any state in America.
What worsens income inequality? ›
Among economists, the leading explanation for increased wage inequality is changes in the technology of production. Such innovations as the personal computer or new forms of business organization have favored workers with greater skill and reduced the value of unskilled labor. But other developments are also at work.
What is the top wealth inequality? ›
How much wealth inequality is there in the U.S.? The top 10% of households by wealth had $6.7 million on average. As a group, they held 66.9% of total household wealth. The bottom 50% of households by wealth had $50,000 on average.
What is a mid level salary in Canada? ›
Find out what the average Mid Level salary is
The average mid level salary in Canada is $106,920 per year or $54.83 per hour. Entry-level positions start at $75,956 per year, while most experienced workers make up to $153,449 per year.
What is considered upper class income in Canada? ›
Upper middle class: Anyone with earnings in the 60th to 80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $89,745 and $149,131. Upper class: Finally, the upper class is the top 20% of earners and they have incomes of $149,132 or higher.
How much do you need to make a year to live comfortably in Canada? ›
A single person needs a yearly salary of $45,000 and up (after taxes) to live comfortably in Canada, while a family of four needs roughly $90,000 to $100,000. Factors will affect this, such as the lifestyle and region you live in.
What is considered wealthy in Canada? ›
However, in Canada, earning over $100,000 annually is generally considered a high income, while earning over $200,000 annually would be considered even higher, potentially putting individuals in the upper income brackets.
