My Greatest Long Term Worries as a Millennial
In this post I’m going to talk about some of my biggest, long term worries as a Millennial. I want to preface this article by saying that my perspective and experience as a Millennial may only represent and reflect the views of only a segment of the overall Millennial population.
- Higher Income Taxes on the Upper-Middle Class
- The Insecurity of Social Security
- Rising Cost of Education & Housing
- Climate Change and Its Impacts
Higher Income Taxes on the Upper Middle Class
Even though it’s not certain, I am afraid that in the future we will see higher income taxes on either the middle class, or the upper-middle class. The US has a tremendous amount of debt, and I’m not sure if we will be able to run the deficit indefinitely. If we decide as a country to increase taxes on those earning more than $100,000, I’m afraid that this will just squeeze the middle class. Even if we talk about increasing taxes on household incomes of over $200,000 or $400,000, in cities that have high costs of living, incomes such as these are considered middle class. In order to fund future social programs and reduce the government debt, we may need to have a more progressive tax scheme, even if it’s more complicated, that addresses the fact that the income distribution in this country is extremely skewed, even among the top 1%. In the top 1%, it’s only the top 0.05% whose incomes have grown significantly in the last decades. By assuming that everyone in the 1% is the same, we would unintentionally hurt some of America’s middle class.
The Insecurity of Social Security
According to the 2019 Social Security Trustees Report, the cost of the Social Security Program is “projected to exceed total income until reserves become depleted in 2035” and from that point onwards “scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2093.” That means that by 2035 when I would be 42, Social security will have depleted its reserves and would only be able to pay out about 75% of its planned benefits. This is partially due to the Baby Boomer generation retiring; there will be more retirees collecting social security than younger generations working and contributing to the social security program.
I’m putting significant effort into my 401K and brokerage accounts and not relying on social security as my means of survival after retirement, but I am really worried about people my age who don’t have the means to save sufficiently for retirement. What’s most likely going to happen is the increase in the retirement age. The future generation may be forced to work later in their lives before collecting Social Security, and even then, the benefits paid out by Social Security may not be enough to retire comfortably.
Rising Cost of Education & Housing
If we assume that the cost of housing and higher education in the United States will grow at the same rate as it has in the last 30 years (3.15% and 4.39% respectively), then in 2050 college tuition, room, and board will be 3x the cost of what it is today. New homes after the year 2050 will also be around 2.5-3x more expensive than today. My children will face higher education costs and housing costs. I’m afraid of the burden that my children will face if I don’t have a 521 education fund. My kids might tell me “you millennials had it easy, your education costs were a third of ours, and the homes were so cheap!”
I really hope we solve the problem of rising education costs, however, I also worry about the unintended consequences, i.e. “cobra effects”, that could arise if we make all colleges free to attend.
- Completely free college may result in bachelor’s and associate’s degrees becoming diluted in value and more entry-level jobs may require master’s degrees.
- Free college may become the default route, thereby increasing competition to get into top-tier schools and increasing stress on younger generations.
- Increased competition to get into top tier colleges and universities may further create divides between public and private primary schools.
Climate Change and Its Impacts
I worry about the global economic impact climate change will have: reduction of arable land for food production, billions spent in environmental disaster mitigation and repairs, and mass migration causing a potential refugee crisis due to certain areas becoming inhospitable. The issue of climate change doesn’t seem as close to me as the other issues I’ve listed above and that’s what worries me the most.
What are some of your long term worries? Please share them in the comments