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Not a day goes by that I don’t hear or read how inflation impacts seniors – not that it doesn’t impact everyone. Many seniors have a unique perspective on what they are entitled to as evidenced by these – not unusual – Facebook comments.
“2.3% for next year Social Security is a joke. They should take into consideration, food prices, and medication. We should be getting more like 8% or maybe 9% each year.”
“Food and medicine went way up for older people and increasing Social Security is not sufficient. They need to raise the percentage to the cost of food and medicine.”
“They should be using the CPI-E.”
I happen to know the people who made these comments, they have a pension and had a good 401k as well.
It’s not like inflation should be a surprise, even that there will be periods of high inflation. Nevertheless, it seems to be a shock to many retirees and to create financial problems for them.
So, my question is, what strategy do you or will you employ to deal with inflation in retirement?
Keep 60% or more of the portfolio in stocks, wait until age 70 to start inflation-adjusted SS.
Inflation as experienced so far this century is likely a “first world” problem for most HumbleDollar folks from what I can tell. If it ever got to the point that the average HD poster actually experienced hardship due to inflation (versus annoyance, inconvenience, or worry), then the vast majority of the country would be in serious trouble.
It seems inflation is a bigger issue for more-affluent retirees, while those with less savings are better protected, because so much of their retirement income consists of inflation-linked Social Security:
https://crr.bc.edu/how-much-does-inflation-affect-retirees/
The other thing to consider for lower income retirees is that the Medicare Part B premium increase can and have wiped out the entire COLA and many times equal at least half the COLA.