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The historical increase in prices in the country has begun to affect the 56 million Americans of 65 years or more, many of whom depend on a fixed income and limited savings, but now need more money to maintain the same standard of living.
According to data from the Elder Index, a cost-of-living measure created by the Gerontological Institute at the University of Massachusetts in Boston, half of older adults living alone did not have enough money before the pandemic started to cover their basic needs, so now the rapid rise in inflation weighs even more heavily on those people.
One reason higher consumer prices are eating into older Americans’ savings is that retirees they have to take out more money to cover the increasing costs.
Another reason is that people with any type of fixed income investment tend to see higher returns. lower because higher inflation is usually accompanied by higher interest rates.
The prices soared 8.5% in March from a year earlier, the Labor Department said last week, the fastest pace since December 1981.
This increase extends to basic foods with 8.8%, gasoline with 48%, electricity 13.5% and rent 5.1%.
There are about 12% of older adults who live solely on Social Security, which pays an average of $1,657 per month, an increase of 5.9% over the previous year.
But skyrocketing inflation has already eroded the entire increase, according to calculations by the League of Senior Citizens. At the end of April, the total shortfall for an average benefit was $162,60.
Approximately 9.5% of people over 65 years old live below the federal poverty line, compared to 8.8% of younger adults, according to a Census Bureau measure.
A single person is considered poor in the US if they earn less than $12,500 by year.
A recent study conducted by Allianz Life Insurance Company of North America showed that only the 13% of retirees believe their income is on par with inflation.
Approximately half of those surveyed said they had a plan to address the rising cost of living.
“Regardless of whether they are Retired or still in the workforce, all Americans are challenged by inflation right now and need to develop strategies that ensure their incomes keep up with rising costs,” said Kelly LaVigne, vice president of consumer insights at Allianz Life.
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