Why It’s Harder To Get to the Upper Class Than It Was for Your Parents
Many experts over the past year have been talking about the effects of inflation on the bank accounts of everyday Americans. But there are other factors making it harder for millions of families and individuals to get by, let alone hit an upper-class status.
“Education, housing and healthcare are all core essential expenses but have been growing at a faster rate than inflation,” noted Marguerita Cheng, certified financial planner (CFP) and CEO of Blue Ocean Global Wealth.
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Read on for a closer look at these factors making it harder to get to the upper class in 2026.
Higher Education Costs
“In my tax and wealth management practice, I define ‘upper class’ as a household sustaining $350,000 or more in annual income with a net worth above $2 million,” said Chad Cummings, an attorney and certified public accountant (CPA) at Cummings & Cummings Law. “We need to emphasize here then inflation, which has continued under the current presidential administration, has moved the goal posts: Prices on many household goods and food have effectively doubled since pre-Covid, making it that much harder to attain upper-class status.”
One of the big factors making it harder is how much it costs to go to school. The costs of higher education continue to rise rapidly for the most part, and it’s a debt that can stick with learners for years after they earn that degree.
“Pursuing higher education is considerably more expensive,” Cheng added. “Student loan debt is also more expensive because of higher interest rates.”
Cost of Living and Wages
“The increase in the cost of living and the lack of wages to keep pace with inflation is a huge part of this,” according to Marcus Sturdivant Sr., managing member of The ABC Squared. “It leads to lower savings rates as essential and wants to consume more of our budget.”
“Most people want the new, flashy things and consumer spending is through the roof," said Brandon Gregg, CFP and advisor with BBK Wealth Management. "This undoubtedly leads to less saving and wealth building. I imagine none of our parents would have thought that vehicle payments would be as high as a normal house payment back in the day.”
Retirement Savings and Investments
Note that a lack of pension funds has also put more of the burden on this generation to foot their full retirement bill, Sturdivant added.
“Most parents of today's generation grew up in an environment of extreme bond rates, so the safe return was higher than the levels we see now and in a world where most people are not invested in the stock market, the cash loses out to inflation and at these levels 3% versus 4% is a 25% difference, not the same as the 80s with double digit bond returns,” according to Sturdivant.
Housing Costs
There’s no doubt that the rising cost of housing in the United States is having a big impact on family budgets.
“The cost of housing is considerably more expensive today,” Cheng said. “It’s not feasible to purchase a home in certain markets at a cost of three times or five times your annual income.”
Healthcare Costs
“I’d like to think I’m healthy, but as an example, take the cost of an inhaler,” Cheng said. “I developed asthma as a result of complications from childhood pneumonia. I’m healthy otherwise but I have seen my co-payment increase from $10 to $20 to $60 to $100.”
Support for Adult Children
“Note that this generation of parents have spent more of their retirement supporting adult children than previous generations,” Sturdivant said. “Parents have returned to work out of need after supporting their adult children. We will also see the greatest transfer of wealth in the history of the world soon, happening before our eyes.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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