The traditional American middle class goals of buying a home in your 20s and retiring in your 60s seem like a distant memory from a bygone era in today's economy. Inflation has moved many who were once considered middle class closer to the poor house, with Americans' perceptions of middle class shifting rapidly. A recent Primerica survey of middle-class Americans finds two-thirds say their income has fallen behind their cost of living.
There are two key financial areas driving this middle-class malaise: retirement and housing. "A Gallup poll shows not having enough money for retirement is, right now, our greatest financial worry, and part of that is this sort-of fading dream of owning a home," says Fox Business host Charles Payne. "In fact, a New York Fed survey shows that renters now believe their ability to buy a home has dropped to an all-time low."
Those concerns are real. Another recent survey from AARP finds one-fourth of older adults now don't think they'll ever be able to retire. At the same time, a Zillow report says Americans now must earn 80% more than before the pandemic to comfortably afford a home.
With food costs, housing costs, and interest rates all soaring, Payne argues this has essentially become an economy of the haves and the have-nots. "The fact of the matter is the circumstances we're in with these ultra-high rates, with unlimited government spending, means that the have-nots really are in a tough pickle," he says.
As a result of this squeeze, nearly half of middle class Americans say they've dialed back on spending or saving to compensate. Payne calls that the difficult but wise choice. "To ask people who are in a tough pickle to sacrifice may sound unfair or unreasonable," he says. "But for me, it is really the only way you can survive this, if you want to enhance your life."
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