Retirees Worry Inflation Will Leave Them Hungry

Survey Findings

3 in 4 seniors said they’ve had to adjust their lifestyles due to inflation; 22% cite drastic changes. 4 in 10 seniors are worried they won’t be able to afford food and groceries in the future due to inflation. 1 in 10 say they’ve had to skip meals to make ends meet, and 23% are concerned they may have to cut necessary medical procedures. 1 in 10 also say that they’ve delayed needed medical procedures to save money.

 

Senior Living Communities Offset Inflation

Han Hwang, Caring.com’s EVP of Partnerships, says the data shows that seniors living in senior living communities are less affected by inflation. Since 2019, according to the report,  the rate of general inflation is 4x the rate of assisted living inflation (15.6% vs. 3.7%).

He says, “While inflation remains a serious concern for seniors and the population in general, our data suggests inflation for those living in senior living communities could be much softer by comparison. If you look at what’s rising in cost — food, energy, gas— many of these essential expenses are included in the rate at a senior living community. And our data suggests that those rates only rose around 4% since 2019 vs. inflation of 16%, so one way older adults could better cope with inflation pressures is to move into a senior living community vs. living alone.”

Coping With Hyperinflation

Alonso Rodriguez Segarra, a CFP(R) Professional specializing in inflation issues after living in a country with high inflation (Venezuala) and even hyperinflation for many years, says that regular frugal living tips won’t necessarily work for seniors facing high levels of inflation. Instead, he outlined certain practices that seniors can use to combat inflation.

Buy In Bulk

“Buying weekly is not a good practice,” says Segarra, when faced with high inflation. “Every day, the products will go up in price, and the longer you have the money in the bank account, the more it is affected by inflation. Instead, it is better to make one purchase per month each time you receive your payments, such as your Social Security check.”

Use a Credit Card

While using a credit card for day-to-day purchases is not highly recommended by personal finance experts, Segarra says it can be an effective tool, “If the person has excellent financial self-control, paying for these purchases with a credit card while leaving the money in a High Yield Saving Account and then paying the entire balance can be an excellent financial strategy, but it must be carefully applied.”

Make Purchases in Advance

In the case of hyperinflation, says Segarra, “We often see that it is not the day-to-day expenses that significantly impact people’s budgets…but rather expenses such as vehicle repair or going to the dentist or doctor, which hurt their budget. So if you already know that you have to fix the car, try to do it as soon as possible, since if you wait any longer, it will be more expensive. If you don’t have all the money to do it, buy the parts you need, and that way, you’ll save, but in items and not in the bank. Any necessary expense you know you must make, then it is better to try to advance it.”

New Retirees

Amar Shah, CFA, CFP, says that new and young retirees have different needs than older seniors. He cautions recent retirees to stay invested for longer.

He says, “New retirees do not typically have pensions that cover all or more of their fixed expenses, and they still must fund 20+ years in retirement. As more seniors begin to face issues such as the one described above, it is important to keep in mind that although inflation is coming down, it is still relatively high historically.

Staying invested in your investments can prove to be extremely important to outpace inflation over a longer period. Even conservative investments that have growing dividends can help protect purchasing power over multiple years which allows you to withdraw more to help combat the increasing core cost of living, such as groceries.”

 

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