If You’re Middle Class Now, Will You Still Be in 20 Years?

The middle class is a relatively new class, globally and domestically in the United States. For long stretches of history, people were divided into the “haves” and the “have nots” as a way of describing economic status, ranking individuals and families into lower or upper classes.

While the middle class spent the better part of the last century growing, there are new findings that the middle class is shrinking at a very steady rate.

“The share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021,” according to Pew Research Center . Along with a shrinking population, household incomes for the middle class haven’t increased as much as those for upper-income households. “Household incomes have risen considerably since 1970, but those of middle-class households have not climbed nearly as much as those of upper-income households,” per Pew.

Discover More: How I Went From Middle Class to Upper Middle Class

Check Out: 6 Money Moves You Must Make If You Want To Be Like the Wealthy

If you are middle class and looking at these numbers and trends, you might be asking yourself whether you will still be categorized in this economic bracket 20 years from now.

“Remaining middle class from 2024 to 2044 will depend on a mix of personal financial management, career stability, adaptability to economic and technological shifts, and overall economic conditions,” said Hector Castaneda, CPA, president and owner of Castaneda CPA & Associates .

“Individuals who successfully manage these aspects and make proactive choices are more likely to stay in the middle class, while others may face challenges that could alter their economic standing,” Castaneda went on to explain.

Here is how you will be able to identify whether you will still be middle class in the next 20 years.

Also see the line between middle class and upper middle class in every state.

Earning passive income doesn't need to be difficult. You can start this week.

Factors That Could Keep Someone in the Middle Class in 20 Years

First, here are some factors that could keep someone in the middle class in the next 20 years.

Income Growth and Career Stability

Being middle class comes with a certain idea about the amount of money you earn, as well as the type of work that you do. With advancements in technology and outsourcing of jobs potentially on the rise in the next two decades, the middle class might find their incomes and employment in jeopardy, but maintaining stability in their careers can help.

“They may be able to hold onto their middle-class status if their income increases gradually and either keeps up with or surpasses inflation,” Castaneda said. “With career progression, maintaining their financial situation can be aided by ongoing career advancement, learning new skills and remaining competitive in the labor market.”

Find Out: What the Upper Middle Class Make in Different US Cities

Cautious Financial Management

While the middle class does not have lots of disposable income on their hands, they do have the opportunity to avoid money traps and pitfalls that could wreck their financial standing. It’s important that they keep a close watch on their money to maintain a middle-class lifestyle.

Reducing excessive debt and managing current debt sensibly can prevent financial strain and maintain financial stability, according to Castaneda.

“Consistent savings and safe investment choices can create wealth and financial security, helping preserve middle-class status,” he said.

Economic Environment

Even with personal diligence and money management, sometimes there are forces beyond the control of any economic level, including the middle class.

“A stable and growing economy that provides good job opportunities and reasonable wage growth will support middle-class status,” Castaneda said. “Additionally, if the cost of living remains relative to income, this will maintain the middle-class lifestyle.”

Factors That Could Change the Economic Status of the Middle Class

And here are some factors that could alter someone’s status as middle class over the next 20 years.

Changes in Policy

With political leaders and parties changing every few years, economic policies tend to shift and be redirected in a multitude of ways, some of which are not always favorable to the middle class.

“Changes in tax policies that burden the middle class more may result in lower disposable income and savings,” Castaneda explained. “As well, lowering social services or benefits, like healthcare or retirement assistance, may result in higher out-of-pocket costs and financial strain.”

Increasing Prices and Inflation

Every day, it feels like prices are going up and down. Inflation and price gouging are present-day issues that take a toll on middle-class budgets. Could they be even worse by 2044?

“If the cost of living expenses, especially for necessities like housing, healthcare and education, rise at a quicker rate than earnings, middle-class consumer purchasing power will be affected,” Castaneda said. “Conversely, extended inflation may reduce real income and make it more difficult to maintain a middle-class lifestyle, particularly if it surpasses wage growth.”

Economic Downturns

If the past few decades have taught the middle class anything, it’s that the markets are unpredictable and economic downturns inevitable. The side effects tend to ripple out and hit the middle class the hardest.

“With a recession(s), these periods of time may result in lower income, job losses and savings, which may force someone out of the middle class,” Castaneda said, adding that market disruptions, like automation, may result in fewer job openings and lower pay in some industries.

This article originally appeared on GOBankingRates.com : If You’re Middle Class Now, Will You Still Be in 20 Years?