Can You Really Retire a Millionaire on a Middle-Class Salary? Here's the Math.

It’s no secret that times are tough lately, financially speaking, what with inflation, widespread layoffs, and soaring gas prices. That can make it hard to save for your future, and you may be wondering whether you can even retire if you’re living on a middle-class salary.

Here’s a look at that question.

Image source: Getty Images.

What’s “middle-class”?

The Pew Research Center defines middle-class incomes as ranging from two-thirds to double the median household income.

Per the Federal Reserve Bank of St. Louis, the real median household income as of 2024 was $87,730. (A median number means half of all households will have higher incomes and half will have lower ones.) It’s now 2026, so that might increase a bit. Add, say, 5%, and the estimate of the median household income rises to around $92,000.

So middle-class incomes would range from around $61,640 to around $184,000.

Can you retire a millionaire on a middle-class salary?

Is it possible to retire a millionaire on a middle-class salary? It certainly is, but with some caveats: You have to be able to save and invest money diligently – for many years. Those with earnings closer to the top of the middle-class range will have an easier job of it than those earning closer to $61,640. How much time you have also matters – a lot.

Check out the table below, which shows how your money might grow over time at 8% annually. I used that number to be a bit conservative, as the overall stock market has averaged annual gains of close to 10% over long periods – and it might average less (or more) than that over your particular investing period.

Many advise socking away 10% of your salary for retirement, but if you’re late to the game, 15% or even 20% can make more sense. Whether you reach millionaire status will depend on how much you can save, and for how long.

Calculations by author via Investor.gov.

I used two different annual contributions, figuring that most people with earnings close to $61,640 probably can’t contribute $15,000 annually to retirement accounts. Think about which of the columns above fits you best. Either way, you can see that given enough time, you can certainly become a millionaire.

How to invest?

So how might you aim for that 8% annual gain? Well, perhaps with one or more simple, low-fee index funds, such as these:

• Vanguard S&P 500 ETF (VOO +0.82%)
• Vanguard Total Stock Market ETF (VTI +0.74%)
• Vanguard Total World Stock ETF (VT +0.95%)

They will, respectively, invest you in 500 of America’s biggest companies, just about all of the U.S. stock market (including smaller companies), and just about all the stocks in the world.

So don’t think that achieving millionaire status is not a possibility for you. Because it very much might be.