The future is not only about innovation and progress; it entails many changes. Over the next five years, we will witness significant financial shifts. Inflation is rising daily, and it will have a substantial impact on our wallets. According to a report from Pew Research, people earning between $48,500 and $145,500 express concerns about their ability to live a traditional middle-class life in the coming years.
Healthcare expenses
Healthcare costs are rising at an alarming rate. According to the report, healthcare prices increased by 2.2 % by March 2024 and will continue to rise in the future. This places a significant financial strain on individuals.
Advanced medical technology, an aging population, and rising medical service prices can be the various factors responsible for the rising healthcare prices. As a result, in the next five years, many Americans may need more money for healthcare.
Education Cost
According to the Digest of Education statistics, the cost of education tripled between 1979-80 and 2020-21 at four-year public and private institutions. This steep upward trend in education costs poses a significant challenge to providing affordable education to future generations. The escalating cost of education is increasing the burden of student loan debt. In the upcoming years, if the government can’t make reforms to address the rising cost, many students will have to forgo the dream of higher education.
Housing Cost
Housing prices are soaring every year, making it unaffordable for the middle-class. Data from the National Association of Realtors reveals home prices rose by 5 percent year over year, with 28.5 percent of metro areas seeing double-digit price increases. This sharp increase in prices can be attributed to the rising population and limited land availability. As a result, affordable housing may become out of reach for many individuals in the coming years.
High-end Electronics
Some high-end electronics may become increasingly expensive in the coming years. The reason behind this is a major supply shortage of semiconductors worldwide since 2020. The shortage leads to rising manufacturing costs, driving up prices of electronic goods and making them unaffordable for people, particularly those with tight budgets or limited income.
Health Insurance
When healthcare costs rise, health insurance can’t remain unaffected. It is expected to increase as the premium rate consistently increases in the coming years. A survey by Mercer reported health insurance costs would rise 5.4% in 2024. This number is expected to grow even further in the next five years. The uncertainty in healthcare policy and regulatory charges makes the healthcare insurance industry volatile, leading to higher consumer premiums.
Family Trips
The impact of rising Inflation will also be seen on family trips in the coming years. Families face financial strains due to stagnant or meager wage increases, making travel unaffordable, especially overseas. Airfares increased by 22.6 percent, and hotel prices increased by 6.7 percent, putting an extra burden on the pocket. The surging demand for travel in popular destinations is driving up travel prices, making family trips inaccessible for middle—and lower-class income people.
Cars
According to a report, the average price of a new vehicle is increasing by 4.2 percent year-over-year. Factors like increasing demand, supply chain disruption, rising Inflation, and advancement in automotive technology are attributed to the rising prices. Additionally, the shortage of semiconductors worldwide leads to delays in production and reduced inventory. If this trend continues, the dream of owning a personal vehicle may remain a dream for many individuals in the coming years.
Private Tuition
Rising education costs significantly impact private tuition. It is expected to undergo several changes, making it unaffordable for many families in the coming years. According to research, the top 50 private universities in the U.S. increase their tuition fee by an average of 3.6%. Rising demand for personalized education, operational cost of tutoring centers, and increased competition are the factors behind Inflation in private tuition.
Travel After Retirement
Sixty percent of Americans plan to travel after retirement. However, the travel industry is expected to witness significant Inflation in the coming years, potentially making it less affordable for people after retirement. Investopedia reveals that travel becomes much more costly for current workers who retire if inflation moves at a moderate pace of less than 3 percent each year. Increased healthcare costs, lower returns on investment, and other expenses may strain retirees’ budgets, making extensive travel unfeasible.
Investments For Retirees
Investment products for retirees are also going to experience an uptick in cost. Factors such as Inflation, rise in demand, and market volatility will contribute to this trend. According to research, in upcoming years, the population of Americans aged 65 and older is expected to increase. This will intensify the demand and competition for investment products, leading to high fees and charges. Furthermore, low interest rates and growing Inflation may also pose a challenge to making safe investments for retirees.
Elderly Care
According to estimates, the elderly population of America is projected to increase by 50 percent in the upcoming years. This trend will escalate the demand for elderly care, making it costlier and less affordable for people with tight budgets or limited incomes. Additionally, the rising cost of healthcare and health insurance will also significantly impact the cost of elderly care. It may increase the challenge of finding affordable care for older adults.
Electric Vehicles
Electric vehicles are becoming increasingly popular among people, with more people embracing them rapidly. This trend has sparked a surge in demand and advancement of technology. However, technological upgrades, supply chain constraints, and investment in charging stations may increase the prices of EVs in the future, making them less affordable.