As inflation trends at the highest levels seen in more than 40 years,1 it’s wreaking havoc on the budgets and spending power of consumers in the United States and across the globe.
Inflation refers to the decrease in the purchasing power of money, which is reflected in an increase in the prices of goods and services. The resulting squeeze on consumers’ wallets is often felt more acutely by retirees drawing down on retirement savings or living on fixed incomes. The good news is inflation is cyclical, meaning that it’s not likely to be permanent. While that may offer little comfort for those struggling to make ends meet in the current environment, there are ways to help ease the pain in six areas that are making retirement more expensive today.
Groceries are expected to rise another 3% to 4% this year,2 making it even more important to find ways to cut costs. Clipping coupons, buying generic brands, and shopping BOGO deals and promotions can help reduce your weekly grocery bill. To save even more, look for stores near you that offer senior discount days and similar promotions.
Gas prices have spiked significantly. Consider using apps that track gas prices where you live and travel. Try to bunch errands and appointments whenever possible.
Utility costs for natural gas, oil, propane, water and electricity are rising across the country. Visit your local utility services’ websites for tips on reducing household consumption and home improvements that can help lower utility costs.
Healthcare expenses, including Medicare premiums, continue to rise. Take the time to compare plan costs and benefits during Medicare’s annual open enrollment periods to ensure you’re getting the coverage you need at the best possible price. Learn more at Medicare.gov.
Housing prices rose 14.6% in 2021.3 That’s good for sellers, but can be costly for buyers, even those seeking to downsize. While rising mortgage rates may help temper home prices in the months ahead, cash buyers or those willing to rent for a period of time until home prices stabilize, may fare better.
Travel costs continue to rise with increased demand, as pandemic-related restrictions are lifted. When it comes to making travel arrangements, the more flexible you are, the more you stand to save. Consumers can save hundreds by booking last minute deals for airfare, cruises, hotels, car rentals and more. Traveling off-season or visiting less popular destinations can also translate to significant savings, along with fewer crowds.
If you have questions about managing income in retirement, let’s schedule time to talk.