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“OLD PEOPLE’S DISEASE.” That’s how I describe my shock every time I go to the grocery store and see how much everything costs.
Partly, this is because I remember how cheap things used to be. My memory of lower prices goes back to the 1960s. My parents would give my brothers and me 50 cents per week in pocket money. I can still recall buying a pair of Reese’s peanut butter cups, then my favorite candy and still top of my list for stealing from a child’s Halloween haul, for a dime. That meant that, with my 50 cents, I could potentially afford five twin packs per week. Yesterday, a twin pack at my local drugstore was on offer for $1.49, a 15-fold increase. I didn’t bite.
But it recently dawned on me that my “old people’s disease” isn’t just the result of my long-ago memory of lower prices. There’s also compounding at work, which means my shock grows exponentially larger as the years roll by.
Think of it this way: If inflation climbs at 3% a year, a $1 item would cost $2.43 after 30 years, or $1.43 more. That’s bad enough. But tack on another 30 years, so we’re now looking at six decades, and that $1 item would cost $5.89, up $4.89.
That said, I try to temper my shock by recalling that the quality of what we can buy today is so much better. Exotic foods beckon from the grocery store shelves. Rubbery mozzarella has been replaced by freshly made, bread comes in countless artisan varieties, and tzatziki, guacamole and hummus have become commonplace. Cars now have safety features that we only dreamed of a few decades ago. Today’s $1,000 laptop offers extraordinarily more speed and memory than one that used to cost twice as much.
And as for wine, I’d argue that the choice and the value have never been greater. At dinner parties, I recall my parents serving just one variety—sparkling Mateus rose. I recently spotted it in the local liquor store and almost bought a bottle. But I wasn’t sure I’d respect myself in the morning.
Take heart! It sounds like you are at just the right age according to research presented by Michael KItces. It is not all a bad situation.
“Yet a growing volume of research studying the actual spending habits of retirees is revealing that this traditional approach may not be entirely appropriate after all. Because as it turns out, retirees don’t actually maintain a stable lifestyle in retirement; instead, spending levels tend to decline (in real terms), as the retiree goes from the “Go-Go” early years of retirement, to the “Slow-Go” years, and eventually the “No-Go” years.”
You likely won’t be spending on the same mix of things at the same levels that you have in the past and thus your overall spending will go down, even in real terms! Are you at the Go-Go, Slow-Go or No-Go stage?
https://www.kitces.com/blog/age-banding-by-basu-to-model-retirement-spending-needs-by-category/
How can Jonathan remember that the candy cost a dime as a little boy? Didn’t he grow up in Britain…
When I was 3 1/2, my parents moved from London to Washington, DC. But I went to boarding school in England starting at age 10, and also attended university and started my career there.
A really good, mainstream television has cost around $600 for a really long time. But compare a $600 CRT TV from the ’70s to a $600 flat panel TV of today? Big difference.
So many things are going up (been to the grocery store lately??), but amazingly, you can still buy a fairly decent pair of jeans for around $20 to $30. I remember that being the price for a pair of jeans when I was in junior high. Computer parts have “deflated” too. You get a lot more for your money than you did in the past.
I had a conversation about this and automobiles very recently. It’s not just safety that’s improved – reliability has improved as well. Not so long ago a car that lasted for 100,000 miles was the exception. Now many cars are capable of lasting 2 or 3 times longer. The resulting expense is higher, but for those of us who buy new or relatively new used cars, the owner can depreciate the expense over a much longer period of time.
I still have a fuzzy memory of the Coca Cola machine at the doctor’s office when I was a kid—5 cents per bottle. Soon thereafter it went up to 6 cents and stayed that way for quite a while.
We got our haircuts at the barber college. Dad would give us a dollar. We could spend it on one of the barbers getting ready to graduate, or we could spend $0.50 on a new barber, and have $0.50 left to spend on candy and comic books.
I consider easy access to quality, reasonably priced wines, from all over the world, one of the successes of globalization. My parents served Mateus. My in-laws – Riunite.
On the other hand, in 1959 I made $0.75 and hour working in the local library and in 1961 my first proper job paid $1.49.
Ah, Mateus brings back fond memories. Just the other day I asked my wife if she remember the wine we drank on our first few dates and when celebrating our first anniversary in 1969 – it was Mateus.
Now I just have to get a bottle.
The ones I remember then were Lancer’s, Blue Nun, and the cheap Chianti in the raffia wrapping. And of course Cold Duck for New Years. Wonder if we could choke them down now?
Ha! As teens in LA we used to camp on the beach (an art, when it came to avoiding police!) The first time we managed to obtain alcohol to supplement the good times, it was Cold Duck!
Definitely Blue Nun. We were big Yago Sangria fans. Thanks for the memories.
As long as I can find a brown paper bag, I’m good. 🙂