By Eric Reich
It’s hard to miss the headlines regarding inflation lately. It is the topic that has dominated the economic news since early 2022. Inflation affects all of us, but unfortunately for seniors, it affects them more than most. Living on a fixed income often allows for little wiggle room in budgets. With inflation having spiraled ever upward, it has become much harder for those on a fixed income to manage their finances.
The good news was that the Social Security increase for last year was 5.9%. The bad news is that inflation rose higher and faster than that. Retirees on average saw a monthly increase of around $93, while prices rose by approximately $135. That’s more than $500 per year of reduced purchasing power. For some, this can mean the difference between having to make choices about what to buy and what to forego.
One area seniors most often choose to cut back on in order to make ends meet is medication. If you are skipping doses to save money, I strongly encourage you to speak to your doctor. Many times drug companies can help with the cost of medicines if you are unable to pay for them. Seniors can also get assistance with things such as housing repairs, dental work, Pet Veterinary bills, etc. After medical, energy is typically the biggest expense for seniors. Hopefully with the slowdown of the economy comes a slowdown in energy prices. I expect prices to fall after spring.
Another way to cut expenses is to cut out the non-essentials such as subscriptions, extra cable TV channels, the extra nights of takeout dinners, etc. These non-essential expenses can easily add up to hundreds of dollars each month. Also consider paying bills annually instead of monthly. Often, monthly bills cost more than annual due to the cost of “handling” payments more often.
Want to save on utility bills? One of the best ways is to install programmable thermostats. Better yet, if you have an unused room, consider turning the heat down or off in that room. For electric savings, unplug appliances that aren’t in use. Think toasters, coffee makers, etc. Even when these small appliances aren’t turned on, they are still drawing power. Negotiate with your cable provider for lower monthly bills. They frequently run specials for new customers, and you can request them too. Same goes for cell phone providers. Both are a great source of savings.
I hate buying cards. I can’t believe how much they charge for a birthday card. My mother-in-law will kill me for this one, but she reuses cards for birthdays and holidays and includes pictures from that year. It is not only a great money saver, but it is fun to look back over the years and see the changes in the pictures she includes.
This year, Social Security increased by 8.7% which is the largest increase in history. If inflation moderates which I expect it to somewhat, then this increase can hopefully provide real relief for seniors.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is a
Certified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations. A lifelong resident of Cape May County, Eric resides in Seaville, NJ with his wife Chrissy and their sons ,CJ and Cooper, and daughter Riley.
