27 May Inflation Causes Added Anguish For Older Americans; How They Can Fight Back
Inflation Causes Added Anguish For Older Americans; How They Can Fight Back
With the cost of nearly everything going up, many older Americans are feeling especially vulnerable as they try to make retirement savings last.
After all, those retirees’ incomes may be fixed, but the prices they pay for goods and services aren’t, which means they need to be more careful than ever about ‘how and how often’ they spend their money, says Chris Orestis, president of Retirement Genius (www.retirementgenius.com) and an authority on retirement planning, long-term care and financial health.
Even one of the largest Social Security cost-of-living increases in years ‘5.9 percent’ only helped so much, Orestis says.
That’s because there was a lot of catching up to do. In the 11 years prior to 2022, those cost-of-living adjustments averaged 1.6 percent, and in two of those years there was no adjustment at all.
“During that same 11-year period, the cost of living rose an average of about 2% annually,” Orestis says. “So, with each year, the gap grew a little more.”
Orestis points out that retirees also were not handed any favors when the Medicare Part B premium jumped 14.5 percent, counteracting some of the good the Social Security increase did for them.
With so many factors working against them, it’s important for older Americans to take whatever actions are available to them to fight inflation, Orestis says. Some of his suggestions include:
- Adjust your spending habits. People look forward to retirement for decades, so naturally they want to enjoy the time as much as possible. But they also have to be careful with their money, so Orestis suggests looking for ways to cut back or to adjust expectations in these inflationary times. Perhaps dine out less often. Or maybe take trips closer to home rather than to far-flung destinations that require expensive travel arrangements.
- Return to work. A Resume Builder survey found that one in five retirees plan to return to work this year. Most of those who expect to be back on the job “ 69 percent“ say the cost of living is the reason. Orestis notes that not every older American is in a position to work, often because of health problems. But for those who can put in at least some part-time hours, a job does provide a good way to counteract inflation.
- Pay down credit card debt. Few things ‘even inflation’ eat into the monthly budget the way credit card debt can. The monthly interest paid on a credit card is money thrown away, Orestis says, so it’s important to begin paying down that debt right away and then keep it down. Orestis offers this simple rule for future credit card purchases: “If you can’t afford to pay it off by the end of the month, you can’t afford it.”
- Be on the lookout for senior discounts. One of the advantages of growing older is that many businesses offer senior discounts, whether it’s on a meal, a haircut, a plane ticket or some other product or service, Orestis says. Unfortunately, he says, many people don’t take advantage of these opportunities. “In many cases that could be because it just doesn’t occur to them, or it may be because they have a hard time thinking of themselves as seniors,” Orestis says. Even if a business doesn’t advertise a senior discount, you should always ask.”
Despite inflation’s continued negative impact, not all is grim, according to the Employee Benefit Research Institute’s annual Retirement Confidence Survey. Nearly 80 percent of retirees said they are confident they will have enough money to live through retirement. Also, with the current pace of inflation, Social Security could be looking at an even larger COLA increase for 2023, Orestis says.
“Even if you are confident, it’s important to plan and make sure you are getting the most out of your dollars,” he says. “With a little smart money management, inflation’s effects can be diluted if not eliminated.”
About Chris Orestis
Chris Orestis, CSA, president of Retirement Genius (www.retirementgenius.com), is a retirement and long-term care planning expert, senior issues advocate, and author. Orestis, who has over 25 years experience in the insurance and long-term care industries, also created the use of life settlements for long-term care purposes. Known as a political insider and senior issues advocate, Orestis is a former Washington, D.C., lobbyist who has worked in both the White House and for the Senate Majority Leader on Capitol Hill. In 2007 he founded Life Care Funding, and in 2017 he founded the LifeCare Xchange. Chris Orestis is author of the books Help on the Way and A Survival Guide to Aging. A third book, Retire Like a Genius, is in the works. He has been speaking for two-decades across the country about senior finance and the secrets to aging with financial and physical health and dignity. In 2019, Chris was named one of the 20 most innovative people in the life insurance industry by the National Association of Independent Life Brokerage Agencies (NAILBA). He has appeared in The New York Times, The Wall Street Journal, CNBC, NBC News, Fox News, USA Today, Kiplinger’s, Investor’s Business Daily, AARP, PBS, and numerous other media outlets, is a frequent columnist for NewsMax Finance, Broker World, ThinkAdvisor, IRIS, and has been a guest expert on over 100 radio programs, podcasts and TV shows.