— As a first generation college graduate, 24-year-old
Ciera Young has wondered whether her bachelor’s degree
gives her an edge or puts her at a disadvantage when she
considers that she has no savings, no car and is
obligated to repay student debt while trying to get a
foothold in the job sector.
I wonder what all these sacrifices are for," she
said. "I’m not trying to drive a Bentley. I just
want to feel everyday that I can breathe with ease, that
I can take care of my bills, and when I have kids ensure
that I leave them a lot better off than when I started
and how my parents started.
should be progress, and it’s just kind of scary that
things could be going backwards."
graduating from Pittsburgh’s Chatham University in
2014 with a major in cultural studies and a minor in
film, Young — a native of Columbus, Ohio, who has
remained in Pittsburgh — served one year in the
volunteer service program AmeriCorps. She is currently
working at the Women and Girls Foundation as a Coro
Fellow in public affairs, which is a nine-month program
that pays a monthly stipend of $1,300.
joined the "Fight for $15 Minimum Wage
Movement," because she is worried about how the
rising cost of living will affect her if she is unable
to find employment or earn enough to sustain a
Young is still at the starting gate of her career, she
is feeling some of the same anxiety shared by people
more than twice her age who are worried — even
terrified — that the rising cost of living will
sabotage their retirement plans.
to a new study on Americans’ perception about
inflation by Minneapolis-based Allianz Life Insurance
Co. of North America, nearly half of Americans (47
percent) report being very concerned about the rising
cost of living. Another 11 percent said they were
"terrified" that they won’t be able to pay
for essential needs because of the rising cost of
concern was even greater among households with lower
earnings — less than $50,000 a year — with 65
percent noting they are either "very worried"
study highlights the potential psychological and fiscal
impact of inflation on a person’s financial
strategy," said Katie Libbe, vice president of
consumer insights at Allianz Life. "As consumers
move into retirement, they will not only need to
consider how to make their income last for 30 years or
more, but also how it can cover rising costs driven by
think Americans are smart to be worried about the effect
inflation will have on their retirement, but many people
are estimating future inflation rates to be higher than
the historical average," she said.
the 20-year average inflation rate runs about 2.2
percent, survey respondents were predicting it will run
between 3 percent and 10 percent each year during their
of the anxiety may stem from the fact that the Social
Security Administration has announced that it will not
provide a cost-of-living adjustment in 2016.
Security benefits are subject each year to the
adjustment, which is based on the Consumer Price Index
for Urban Wage Earners and Clerical Workers. Since the
COLA first affects benefits paid after Jan. 1, Social
Security needs to have figures available before the end
of the year. Any adjustment for Jan. 1, 2016, is based
on the increase in CPI for the third quarter of 2015
over the third quarter of 2014.
the most recent index was below its level from the
previous year, the Social Security Administration cannot
provide any cost-of-living adjustment for 2016. This is
the third time since the automatic provisions were
introduced that no cost of living adjustment will be
absence of a COLA in 2016 is likely to reignite the
debate over whether the government is using the most
appropriate index to adjust Social Security
benefits," said researchers at the Center for
Retirement Research at Boston College.
a long time, critics have contended that the CPI-W
understates inflation for the elderly because it does
not reflect their spending patterns," the report
said, adding that the index does not reflect how large a
share of senior citizens’ budgets go for medical care,
where prices have been rising rapidly.
average life spans and rising health care costs could
cause more retirees to outlive their savings. Fidelity
Investments estimates couples who retire at age 65 will
spend $245,000 on health care during their retirement.
That assumes that a man will live to be 85 and a woman
Kahn, president and founder of Wealth Management
Strategies in suburban Pittsburgh, said the worry that
many Americans have concerning slow wage growth and the
rising cost of living is warranted because of the
trade-offs people are forced to make.
they save for retirement? Or do they pay their
deductible on high deductible health care plans people
have now?" he said. "What will families need
to sacrifice to educate their children? People are doing
the best they can. They are working through a very
solution is for people to focus on what they can
control," Kahn said. "They can’t control the
lack of wage growth. But they can control their habits,
which include saving and foregoing current consumption.
That may reduce some anxiety because they are taking
control of their own future."
up on the dream?
the millennial generation, it can be especially
difficult to save for the future at a time when many
college graduates find it difficult to find jobs and
those who do are often under-employed while managing
Bank reported that college graduates aged 35 and under
with student loans are now spending about 18 percent of
their current salaries on student loan payments, and 60
percent expect to be paying student debt well into their
Young, who is the first in her family to go down the
college path, earning a bachelor’s degree represents a
milestone for her family and community that the American
Dream is possible.
Saturdays and Sundays, my dad and my brother and I would
go on joy rides to the neighboring suburban community of
Bexley, Ohio," she said. "He told us if we go
to college, this is the lifestyle we can have. Now I’m
worried it might not come true."