The middle class is shrinking, and it is struggling more and more to afford basic necessities. As the economy changes, things that were considered part of a basic middle-class existence are now out of reach for many Americans who just want a comfortable existence. If this continues, these items will be totally unaffordable for the middle class within the decade unless something changes.
Here are five things that middle-class Americans won’t be able to afford within the decade.
College
Private and higher education costs have risen over the years due to increased operating costs and declined state funding, making them prohibitive for most middle-class families. Additionally, most middle-class families struggle with stagnant wages, making it challenging to keep up with the rising costs. College, which used to be a hallmark of a middle-class lifestyle, is now very expensive and will soon be absolutely unaffordable—even with loans.
Healthcare
Healthcare has become increasingly unaffordable. While healthcare used to be available to all but those who lived in intense poverty, the costs are quickly becoming unsustainable for most middle-class families. Over the next few years, the lower-middle class won’t be able to afford the rising healthcare costs. Besides medical treatment, copays, deductibles, and health insurance premiums have become expensive, especially for families needing regular medical care or those suffering from chronic health conditions.
Many middle-class families may find their income constrained to cover long-term care for themselves or their aging parents.
A House
Research shows that homeownership rates are higher post-COVID than pre-pandemic, making it difficult for the middle class to find affordable homes. As home prices skyrocket, experts believe that the lack of enough homes and high interest rates are reasons the middle class may struggle to own a home. The stereotypical middle-class family used to be able to own a house in the suburbs and a car, but now this is out of reach for most. If prices continue to rise, even the most basic starter homes in the more affordable areas won’t be affordable for middle-class families.
Childcare
Childcare costs are becoming prohibitive for many middle-class families, especially those with kids requiring full-time care and those with multiple children. As more parents enter the workforce, the demand for childcare services has increased, further pushing the prices of childcare services.
The rising costs of supplies, staffing, and facilities have steadily increased over the years, making it challenging for the middle class to afford the high childcare fees. As it rises, safe childcare will become a luxury for the very rich alone.
Retirement Savings
Work hard, buy a house, and then you can retire and spend time with the grandkids—the American Dream, right? That was the promise, but it is no longer affordable for middle-class Americans. Retirement is now out of reach for many.
A Bankrate survey discovered that 55% of Americans are behind in their retirement savings. The middle class struggles with stagnant wages, a high cost of living, and limited access to employer-sponsored retirement plans, making it difficult to save for retirement.
Additionally, most middle-class families carry significant debt, such as medical bills, credit card debt, and student loans, which can take up much of their income. Paying off debt has taken priority over saving for retirement.
Will those middle-class Americans who are due to retire in 10 years be able to? Only time will tell.
