(Cheapism) - Feeling Pinched -
Inflation is hitting everyone hard these days. However, for one group, the price increases have been especially bad: seniors. Many seniors have poured years of their lives into work only to be strapped for cash in their golden years. Keep reading to find out why inflation is having a larger impact on them.
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Seniors Often Can’t Work
As people get older, tasks that were once simple become much more cumbersome or even exhausting. Many seniors can’t work because of health issues. According to a report by the Administration for Community Living in the U.S. Health and Human Services Department, in 2020 some 39% of Americans over age 65 had difficulty with mobility, 29% had trouble hearing (even with hearing aids), and 21% had difficulty with seeing (even with glasses). Obviously this makes work much more challenging if not impossible.
Retirees Might Not Be Hired Due to Their Age
Even if retirees can work, they are often limited by age discrimination, although this is illegal. “They cannot earn more to afford a higher cost of living,” says finance expert Andrea Woroch.
Increases in Social Security Payments Aren’t Cutting It
As the cost of goods skyrocket, seniors still aren’t seeing their Social Security checks increasing at the same rate, says Jerry Patterson, president of Fidelity Investments Life Insurance. “Even with this year’s 8.7% cost-of-living adjustment to Social Security, which is the largest in a generation, people are still feeling the impact of inflation in a big way.”
The Stock Market Has Been Volatile
Another reason inflation is especially bad for seniors is the associated stock market volatility. Even with conservative investments, seniors are still riding the rollercoaster — only now, they don’t have a long time horizon to wait out large market dips. “Market volatility is chipping away at the nest eggs and purchasing power of many seniors creating further anxiety,” says Patterson.
Inflation Reduces the Value of Seniors' Savings
Inflation can also affect the value of savings and assets seniors may have accumulated over their lifetime. As prices rise, the purchasing power of their savings is reduced, and any assets, such as real estate or stocks, may also lose their value, says Andrew Lokenauth, financial executive and founder of Fluent in Finance.
Seniors Spend a Large Portion of Their Income on Necessities
Seniors also tend to spend a higher proportion of their income on basic needs like housing, healthcare, and food, says Lokenauth. This makes cost-cutting difficult since there may be no “lavish” expenses to cut in the first place.
Many Seniors Worry They Won’t be Able to Afford Groceries
Paying For Senior Care, a website designed to help seniors understand their long-term care costs, completed a study in September 2022 with shocking results. Its survey of 1,000 seniors found that 4 in 10 were worried they wouldn’t be able to afford groceries in the future because of inflation.
Healthcare Costs More
Another factor that can make inflation particularly challenging for seniors is the fact that their healthcare costs are likely to increase as they age. The cost of health care is expected to rise by 6% in 2023, which follows a 5% rise in 2022.
Prescription Drug Costs Are Skyrocketing
Seniors are more likely to need prescriptions, and the cost for these is rising. AARP found that the price of prescriptions increased at twice the rate of inflation 2020.
