Millennials are currently in their late 20s, 30s and early 40s. Historically, this is the period in life where people generally start planning for their future families, buy houses and start — or continue — their retirement planning.
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This is still true today, but rising costs have brought about greater challenges than ever before. While previous generations faced their own financial struggles, millennials who want to do things like purchase property or retire early may find it harder to do so — now and in the future.
Here are the top things that, if current trends continue, millennials may be unable to afford in the next 10 years. And here are things they might not be able to afford in retirement.
Homeownership
According to the National Association of Realtors, home prices have risen in approximately 85% of cities in the United States. Along with this, real estate prices increase with inflation.
Already, homes are bordering on unaffordable for many millennials. With costs expected to rise in the coming decade, buying a home is likely to become more difficult. This is especially a concern for those whose wages don’t rise with housing costs.
“High down payment requirements and rising interest rates play a role in this challenge,” said Taylor Kovar, CFP and founder of 11 Financial. “Especially in urban areas in which housing demand is outweighed by supply.”
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Healthcare
The cost of healthcare in America is among the highest in the world, so it’s no surprise that many millennials struggle to afford it even now. But healthcare costs have risen faster than inflation for years now, a trend that — if it continues — will only make it more difficult to afford necessary treatment and services in the future.
“Millennials may face challenges in affording health insurance premiums, deductibles and out-of-pocket expenses, especially if wages do not keep pace with rising healthcare costs,” said Robert Valentine, founder of The Money Alert.
Gasoline
Gasoline prices have increased steadily over the years, but this isn’t entirely due to inflation. Supply also plays an important role.
“The era of fossil fuels is living on borrowed time. As more states begin requiring cars to go electric, gas could become more scarce and command a premium,” said Scott Lieberman, the founder of Touchdown Money.
On that note, vehicles in general are becoming more expensive. This includes not only electric and hybrid vehicles, but also standard gasoline vehicles. For the average person, even owning a car might be become more of a challenge.
Higher Education
The cost of higher education keeps rising, too. As a result, many millennials — and older Gen Zers — have had to rely on student loans to get them through their college years. But this debt makes it even harder to manage other costs or meet long-term financial goals.
“Without substantial reforms to make higher education more affordable, this trend is likely to continue,” Valentine said.
“Tuition fees are increasing faster than inflation,” added Rhett Stubbendeck, CEO and founder at Leverage Planning. “I know many clients worry about saving for their kids’ college while managing their own student debt.”
Groceries
There are always discount grocers — like Aldi or Lidl — where prices tend to be lower. But certain grocery items are quickly becoming less affordable.
“Lab-grown meat has been in the news lately because traditional meat has become more expensive to produce and obtain,” Lieberman said.
Specialty and organic foods are also rising in cost. This is due to many reasons, not least of which is inflation and supply issues of certain goods.
Retirement
“Many millennials face challenges in saving for retirement due to factors such as stagnant wages, student loan debt and the gig economy’s lack of employer-sponsored retirement plans,” Valentine said. “Without adequate retirement savings, millennials risk facing financial insecurity in their later years.”
As the overall cost of living continues to rise, it can be even harder to save or invest enough to retire comfortably. That’s not to say that retirement is out of reach. It just requires more financial planning and, in some cases, may result in delayed retirement.
Digital Privacy
From antivirus software programs such as Norton to virtual private networks (VPNs), there are many digital privacy services available. These services can keep your personal data secure and protect you from your identity theft, fraud and similar security concerns.
But as they become increasingly important, they also become more expensive.
“VPNs have become a necessity for many people,” Lieberman said. “Digital security gets more important every year, and companies who do it well will be able to charge large fees.”
Child Care
Having a child is already expensive, which is part of why many young people choose to wait until they’re more financially secure to start a family. But it might not become any easier — or more affordable — in the future.
“The cost of childcare has skyrocketed in recent years, making it one of the largest expenses for many families,” Valentine said. “High child care costs can create financial strain for millennial parents.”
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This article originally appeared on GOBankingRates.com: 8 Things the Average Millennial Won’t Be Able To Afford in the Next 10 Years
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
