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In 1975 the Social Security COLA was 8%, in 1979 9.9%, 1980 14.3% and 1981 11.2% reflecting soaring inflation. I project 2025 will be 2.3% or less if inflation keeps falling.
During the oil embargo in 1974 gasoline jumped 35% a gallon in one year to $0.53 a gallon equivalent $3.36 in 2024 – if you could get gas then. As of July 8 the average US price a gallon was $3.608 with significant variations by state and individual station – $3.01 in Mississippi and $4.76 in California.
Mortgage rates were in the 9% range
So, the question is, were we better off back in the good old days?
I think about how my grandsons will consider these the “good old days” and will have the same tribulations when they reach my current age.
We received a new grandson last November. When my first son was born in 1973, we couldn’t make many phone calls because of toll and long distance charges from monopolist Ma Bell. There was no easy way to share photos or for relatives to see the baby unless they visited. There were no personal computers, cell phones, or even portable phones in our home.
Now we can see our new grandson virtually anytime he is awake via FaceTime. His parents have a photo setup on Google photos with thousands of pics and videos. Although we are 2000 miles away we feel much more connected with him than our parents ever felt for our kids. I can print a photo of my grandson for pennies should I want one.
Life has changed so dramatically compared to 50 years ago. Technology we take for granted now was science fiction then. There is virtually no aspect of life that has changed dramatically.
When I got out of the USAF in 1972 and went to work, there was no Roth, or other IRA, or 401k. Our health insurance didn’t provide maternity coverage. The health insurance had 20% coinsurance, and no out of pocket maximum. I had no sick days. There was a 3 calendar year waiting period before I could get a bonus or be vested in the retirement plan. At the company where I worked there were zero female employees except in clerical jobs. There were zero black employees,
Nostalgia is wonderful when we look at old photos and remember the “Good ol days”. Well, they weren’t.
Not with a 13.5% mortgage on our first house in 1984. Makes today’s rates look like a bargain. I was so financially naïve back then.
Sounds like me. Bought a house in 1980 and had to get a 12-3/4% ARM (quarterly adjustment, if I recall) that was tied to T-Bills. There was no ceiling or floor for adjustment. The first couple of years we watched the negative amortization kill us, then for a couple of years we were able to gain it back. After a total of four years or so we refinanced with a fixed rate (around 10%) with essentially no gain or loss. Never did an ARM again.