In 2022, the inflation rate is hovering above 8%. That means that the purchasing power of a dollar is buying about 8% less than it did a year ago. For seniors living on a fixed income, that’s particularly concerning. Seniors are more likely to spend money on things that are increasing in price, such as healthcare and food. Inflation’s impact on seniors may be more dramatic than for others.
In 2022, Social Security payments had a 5.9% cost of living adjustment, the largest in decades. However, that still doesn’t keep up with 8% inflation. Here are some ideas to help your money stretch further:
- Review your spending and eliminate or reduce any expenses you can. If you enjoy morning coffee, brewing a cup at home is a fraction of what ordering through a drive through costs. With groceries costing more, shop your pantry and freezer for ideas to use what you already have before going to the store. Look for recipes with cheaper cuts of meat, or that use beans, eggs or nuts to provide protein.
- If you have the internet and a smart phone, use the grocery store, pharmacy, and gas station’s apps to clip electronic coupons.
- Everyone is facing this inflationary period which has gas prices at record highs. Talk with your neighbors about carpooling to the grocery store or to run errands. You might be able to purchase some items in larger quantities (which often cost less), then split them. Instead of a weekly lunch out with friends, take turns hosting a potluck where everyone brings a dish to share.
- If you have investments, you may want to talk with your financial adviser to make sure your savings are as protected as possible.
- If you have not retired and begun to collect Social Security, you may want to delay claiming those payments. Each year that you wait to retire, up to age 70, means about an 8% increase in your benefits. The Social Security Administration offers a calculator to gauge how a delay could impact you.
For seniors that have been considering selling their home and moving into an assisted living facility, it may be worthwhile to talk with your financial advisor, a real estate agent, and a mortgage specialist who deals with reverse mortgages. Home values have increased significantly, making many homes worth much more than even a year or two ago. Selling the home may be an option, particularly if the elderly adult needs more care and assistance with daily activities. Another option might be a reverse mortgage which could tap into the equity of the home. Funds from a reverse mortgage could then be used to cover monthly expenses or provide at home senior care.
At BeeHive Home Care, one thing we encourage is to try to not focus or worry about the impact of inflation. Instead, look at this time as a challenge, an opportunity to find ways to live life comfortably and peacefully, while making a game of stretching the dollar. If we can answer questions about assisted home care or about care in a home-like environment, please let us know.