"This is not the retirement I imagined."  How are retirees affected by inflation - CNN

“This is not the retirement I imagined.” How are retirees affected by inflation – CNN

CNN Business spoke with several retirees about how to manage their spending as prices rise. One common thing was the shock of dealing with the huge jump in food prices – especially meat, fruits and vegetables.

But of course, the extent of inflation goes far beyond the supermarket. Here’s how these retirees work They say they are adjusting.

If it wasn’t for a local food bank truck coming into her apartment building every two weeks, retiree Donna Lyons of Fort Collins, Colorado, said she might not have enough food for the month.

“I rely on him a lot [the food bank]. “It’s a real blessing,” said Lyons, 67, who moved to Colorado from Pennsylvania in 2020 to be closer to her two children and grandchildren.

She now gets the Social Security and pension checks she earned for decades of working in secretarial and juvenile security roles in the Pennsylvania education system.

But by September, her rent will be increased by $200 per month A 14% jump from what you’re paying now. Lyons estimates that at this point, after paying rent, taxes, insurance, medication and utilities, she’ll only have $150 a month left to pay for groceries and expenses.

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Given that her most recent monthly grocery bill alone was $187, she’s not sure how she’ll be able to survive in her apartment, as her savings are nearly exhausted. She said she has been looking for less expensive accommodation in the area, but has had no luck so far.

“I’ve been thinking about selling everything and going back to Pennsylvania, but I don’t want to leave my family,” Lyons said, adding that she’s been in the hospital recently and doesn’t know what she would have done without him. Helping her children during that time.

Her expectations for retirement were completely different from her current reality. “I didn’t expect the stress level financially. I wasn’t really expecting. I worked for 50 years. I was a single dad so savings wasn’t exactly easy. I’m slowly taking it in just to survive.”

Downsizing and resuming part-time work

Retired teacher Marisa Flynn, 73, lives in a resident-owned mobile home garden In Morgan Hill, California, in the southern part of Silicon Valley. She had ran her own electrolysis business for years before starting a second career as a public school teacher. She gets a pension and half of her ex-husband’s Social Security.

Flynn thought she would be fine financially in retirement but did not realize that her Social Security payments would be reduced by about $400 per month due to her teacher’s pension. Every time she gets a cost-of-living adjustment for her Social Security benefits, a larger portion of Medicare is deducted, she said.

It wasn’t easy to manage before the pandemic and then inflation. but now She is feeling stressed like never before.

Utility and gas costs have skyrocketed in the last year.

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Gas prices in the US recently averaged $4.60 per gallon highest ever. For April, the Bureau of Labor Statistics reported that energy prices, which include electricity and natural gas commonly used to heat and cool homes, was as high as 30.3% on an annual basis.

As a result, Flynn said she uses less heat and air conditioning. She also drives less, even to see her daughter and grandchildren who live 40 minutes away. “Before, I’d just get in my car and not think about it.”

Washing her car for $20 is also out of the question — and it’s hard to do on her own due to California’s water use restrictions. She said she doesn’t eat outside, has no internet and can’t afford the repairs her house needs.

To help make ends meet, Flynn is working as an alternative to teaching half a day a week, something she was doing before the pandemic, but has now resumed even though it poses an increased health risk to her due to Covid.

She said she also receives Meals on Wheels and will occasionally go to a local large center for a free lunch.

“This is not the retirement I was envisioning,” Flynn said.

Like Lyons, Flynn has considered moving to a less expensive area, but is unlikely to do so because that would mean being away from her daughter and grandchildren. “That would be sad for me.”

Watch Their cushions are shrinking

Not all pensioners, of course, suffer financially as a result of inflation, but it nevertheless changes their behavior.

Richard and Peggy Thomas saw that the lining in their financial pillow began to recede due to rising prices.

Arkansas City, Kansas, resident Richard Thomas, 73, carefully prepared for retirement during his career as a mechanic making composite jet engine parts for Boeing. This preparation paid off, despite receiving a lower-than-expected pension After the factory he was working in was purchased in 2005 He was forced to retire earlier than he expected.

Thomas said he owns his entire house and doesn’t take on credit card debt. “After paying off my house, I invested a lot of savings and my 401(k). When I retired, I was in fairly good shape financially. It’s great how far your money goes when you don’t owe anyone money,” he said.

Between his Social Security checks, his pension, and the annuity they bought, Thomas said he and his wife, Peggy, could cover all of their monthly expenses with some left over. But this surplus is shrinking.

Thanks to inflation, Thomas said, “the stuffing in the financial ‘cushion’ I worked so hard to create is starting to dwindle.” “We were forced to make some changes.”

While the couple wasn’t great at travelling, Now they take fewer trips. They also drive less — and more slowly — to save gas. That means fewer spontaneous trips to Wichita an hour away or dinner in a town 30 miles away, he said.

New car purchase plans are also scheduled. “The starting price for a new Jeep is $15,000 more than the cost of my house,” Thomas joked. (Technically, on an inflation-adjusted basis, a new Jeep still costs less, but not much less, than the 1997 purchase price Thomas said he paid for his home.)

While Thomas said he wishes Social Security’s annual cost-of-living adjustments were more in line with the actual price increases he’s seeing, he recognizes that the couple’s frugal economy and financial planning help him and his wife weather this inflationary separation more easily than others. .

“Inflation so far is not a heavy burden, but it has become a burden,” Thomas said.

Better than most, but Still holding back

Jane Tanaka, 60, and her husband, Greg Cheek, 67, retired a year ago and are enjoying their spare time after working 12-hour days for years as a psychiatrist and plumber, respectively.

Tanaka said the couple, who live in Tehachapi, California, paid off their mortgage earlier in their careers. Once this was taken care of, she added, they stole 40% of their retirement income. So they were well prepared financially.

Jane Tanaka and her husband, Greg Cheek, cook more and travel less due to inflation and low stocks.

But in light of soaring prices and a plummeting stock market, Tanaka said they are now choosing to live on less than $2,000 a month than they planned, only getting income from her husband’s Social Security benefits and annuities. “We don’t touch our retirement savings because we don’t want to sell our investments at a loss.”

Instead, they do a lot of cooking at home, rather than buying prepared foods or eating out. Her husband takes care of the property around their house. She fixes their clothes. Travel plans, even for road trips in their lodging, have been curtailed due to gas prices. Instead of donating money to favorite causes like they used to, they donate their time instead. “Now I spend the whole day baking for the Dog Rescue Club [fundraiser]Tanaka said.

She is fully aware that the financial choices they are making now are “world-first gratification options,” as she puts it. “There are much worse problems we could have.”

But Tanaka said she hopes her story will encourage young people to save money if, during their working years, they can finance their future. “It’s about getting ready for a rainy day… and trying to adapt.”

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