America has 5 wealth classes

Many Americans feel that financial security, which was once a characteristic of middle-class life, is becoming increasingly elusive due to years of growing expenses for essentials like housing, transportation, and healthcare.

Since a person's assets and debts can have a bigger influence on their long-term financial security and financial freedom than income alone, many financial professionals measure class by net worth rather than income.

In a recent video, financial advisor and "Money Guy Show" co-host Bo Hanson described one approach for determining a person's potential wealth class based on their net worth.

According to the Federal Reserve, median net worth varies greatly, peaking at $410,000 for people 65 to 74 years old, about the normal retirement age, and beginning at $39,000 for those under 35.

To put it another way, the typical American eventually rises to a middle-class level within their lifetime.

Dan Honsberger, a financial adviser with Reel Financial Planning, told MarketWatch that such benchmarks can be beneficial if they encourage consumers to recognize that they're lagging behind their target savings objectives and make adjustments to get back on track.

However, he added that just because a person's wealth class is above average doesn't mean they should become complacent. Rather, individuals must to assess the amount of money required to fulfill their individual financial objectives and preserve their financial stability.

These standards "do not carry a life sentence." "It's merely a gauge to see where you're at," Honsberger stated. Since everyone has different priorities and "there are a lot of different ways that you can live life and make the numbers work to be financially independent," there is no one-size-fits-all strategy to achieve financial independence.

According to Hanson, a person's perception of their net worth might vary within each wealth class based on elements including their debt load and the percentage of their assets that are immediately accessible. In his video, he stated that "having wealth tied up in your primary residence really limits your financial flexibility" because some assets, such as residences, are not liquid.

He continued by saying that building up one's net worth without accounting for age may be "misleading" because wealth accumulation takes time. A low net worth when you're young could not have as much of an impact on your financial security as a low net worth later in life.